1 | © UPM Sari Mannonen, UPM Biofuels IEA Bioenergy Conference Advanced biofuels pave the way for successful bioeconomy

UPM today 2 | © UPM TURNOVER €9.9 BILLION PERSONNEL 20,000 SHAREHOLDERS 88,000 + self-adhesive labels pulp, plantations, biofuels, timber

Wood biomass is in the forefront of new bioproducts development 3 | © UPM Wood is preferred biomass Technologies to convert lignocellulosic feedstock into bioproducts developing fast Advantages of wood: Limited price volatility Available year-round Easy to transport and store No overlap with food-chain Europe - Most forest-rich region 1.02 billion ha = 25% of global resources Forest area expanding (annually ha) Only ~ 40% of increment utilized 3 | © UPM

Biofuels for transportation Labels and composites Biochemicals Biofibrils Pulp, paper, plywood and sawn timber Bioenergy – heat and electricity Biofore growth opportunities – added value of wood and biomass Sourcing and logistics of wood and biomass UPM BioVerno UPM Grada Biofibrils UPM Formi UPM ProFi 4 | © UPM

Responsibility is good business and key to success Anticipating and managing risks Creating competitive advantage and long-term value New business opportunities Biofuels, Biochemicals, Biocomposites Value creation with stakeholders 5 | © UPM

UPM Biofuels and latest sustainability recognitions 6 | © UPM UPM renewed its position as the industry leader in Dow Jones Sustainability Indexes for Award for Breakthrough Innovation in Technology in 2013 Winner in Travelling category 2014 awarded by European Commission Finalist in Sustainable Innovation category in the Leading Technology Award 2014 Winner in Commercial Scale Plant of the Year 2015 category

UPM and WWF Finland together support sustainable wood-based liquid biofuels 7 | © UPM UPM and WWF Finland Dialogue paper signed in November 2014 shares common understanding and lists action points on wood based biofuels. To read the dialogue in its entirety, please see UPM and WWF Finland promote advanced biofuels that deliver high greenhouse gas emission savings are produced in highly efficient processes comply with robust and credible sustainability criteria that ensure –sufficient protected areas networks –forest management criteria of highest standard –accounting and minimizing of forest carbon stock impacts UPM and WWF Finland continue co-operation to further develop common understanding by joint research in advanced wood-based biofuels. WOOD-BASED LIQUID BIOFUELS CAN OFFER A SUSTAINABLE OPTION FOR THE TRANSPORT SECTOR

UPM’s journey in advanced biofuels 8 | © UPM UPM published its plans to become a significant producer of advanced biofuels Development of hydrotreatment process started in UPM R&D UPM Lappeenranta biorefinery in commercial production in January First investment decision of 175 M€ for UPM Lappeenranta biorefinery. Produces renewable diesel from tall oil. Development of BTL technology ongoing at GTI pilot plant in Chicago, USA 2015 Sales of UPM BioVerno diesel starts. Business is expanding in stages.

Capturing synergies by full integration into UPM Kaukas mill site in Lappeenranta, Finland RESEARCH CENTRE BIOREFINERY SAW MILL PAPER MILL BIOMASS POWER PLANT PULP MILL | © UPM

UPM Lappeenranta Biorefinery, Finland 10 | © UPM Key facts: Product: Renewable diesel UPM investment: 175 M€ Capacity: 100,000 tonnes/a UPM Patents & Applications: 200 Employment: 200 persons Contributes approximately 25% of Finland’s biofuel target 2020

Crude Tall Oil (CTO) – a residue of pulp making process as raw material PRIMARY PRODUCT Pulp for paper making RECIDUE STREAM Crude tall oil must be removed from the chemical cycle to secure pulping process functionality ENERGY 50% 48% PULPING PROCESS 11 | © UPM 2%

UPM renewable diesel process 12 | © UPM

UPM is in an excellent competitive position to integrate processes for new bioproducts 13 | © UPM Access, management and sourcing of biomass 4. Lorem ipsum dolor 12pt Lorem ipsum dolor sit amet, consectetur adipiscing elit. Fusce eu tincidunt ipsum Three areas of competence bring UPM in the position to become the frontrunner in new biomass based innovations Chemical processes Kraft pulping Renewable diesel production Biomass handling Debarking Saw mills Mechanical pulping Bioenergy & Infrastructure Biomass boilers CHP Water treatment Run sustainably large industrial processes Processes of biomass conversion 123

UPM BioVerno – Renewable diesel RENEWABLE FEEDSTOCK 100 % CO 2 EMISSIONS (VS. FOSSIL FUEL) -80 % 14 | © UPM IN FOOD CHAIN 0 % OXYGEN FREE HYDROCARBON 100 %

UPM BioVerno – tested quality Fleet tested with Technical Research Centre of Finland (VTT) –Several vehicle and motor tests, and material tests –Bus fleet tests with VTT started Fulfils demanding customer specifications – high quality drop-in diesel 100% renewable Significantly less tailpipe emissions High stability Distributed in Finland by St1 and ABC gas stations 15 | © UPM Compatible with all diesel engines – 80% less CO 2 emissions

16 | © UPM Towards lower emissions – UPM BioVerno bus tests started in Helsinki region bus traffic

Driving cleaner traffic UPM Biofuels