The forest sector s contribution to the European bioeconomy Tytti Peltonen VP, Corporate Affairs, Metsä Group

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1 The forest sector s contribution to the European bioeconomy Tytti Peltonen VP, Corporate Affairs,

2 sustainably from forest to customer Sales EUR 4,9 billion; personnel Production units 9; sales offices in 26 countries Parent company Metsäliitto Osuuskunta Owned by Finnish forest-owners with their property of over 5.3 million hectares, i.e. 48 % of privately-owned forests in Finland Metsä Tissue Metsä Board Metsä Fibre Metsä Wood Metsä Forest Tissue and cooking papers Paperboard Pulp Wood products Wood supply and forestry services Sales: EUR 1,0 billion Personnel: Sales: EUR 2,0 billion Personnel: Sales: EUR 1,3 billion Personnel: 900 Sales: EUR 0,9 billion Personnel: Sales: EUR 1,6 billion Personnel: 900

3 International and developing

4 Forest industry offers solutions for global challenges 3 billion 7 billion 9,2 billion Rapid growth of population leads to global resource scarcity For fulfilling the needs of the growing population in future, we need to operate wisely already today as one of the leading forest industry players offers renewable, sustainably produced solutions to substitute fossil-based alternatives enhances resource efficiency in material, energy and water use works for creating value for side streams and decreasing the amount of waste

5 Wood stock is growing in northern forests Growing stock change in the 50 most forested nations (in colour) Did you know that Finland is the most wooded country in Europe? 86% of Finland s total land area is forest. Gaining growing stock Zero change Losing growing stock Source: FAO

6 Forest-based bioeconomy A complex mix of actors, cascade use, recycling and circular economy 3 More material and energy efficient production than ever 4 Safe and sustainable alternatives to carbon intensive products and services 5 100% recyclable products 1 Traceable, renewable raw material from sustainably managed forests 2 Pulp mills among largest bioenergy providers in Finland. 6 Production side streams used in further processing or as energy 6

7 Our main raw material is sustainably managed, 100 % traceable wood The wood we use is originated from sustainably managed Northern forests Finnish forest owners are members of Metsäliitto Cooperative, Metsä Group s parent company. Wood supply in m 3 Finland 75% Russia 8% Sweden 7% Estonia 5% Latvia 4 % Lithuania < 1% Wood grows today more than it is used All the wood we use can be traced to its origins Our target is to maintain the level of certified wood above 80%. Today our share, 84 %, is among the highest globally We turn renewable wood into sustainable, safe and recyclable products

8 Every part of the tree is used for the purpose it suits best - Link to story about forest in YouTube Bark, branch and top refuse Appr. 10% to bioenergy production and by-products Pulpwood Appr. 25% to pulp production Sawlogs Appr. 60% to wood products

9 Our by-products and waste are valuable raw materials in circular economy Over 90% of the waste we generate is utilised as material recycling and energy recovery. Waste management in % 8% 0% 52% Material recycling Energy recovery Landfilled waste Hazardous waste Our main waste fractions are fibre sludge, ashes from energy production and lime ash from chemical pulp production. The by-products from our processes, such as saw dust, bark and dry wood chips are used as fuel in energy production. Other residuals can be further used e.g. as fertiliser in landfill capping or in earth construction. Surplus by-products are sold to external customers for further processing. New forms of upgrading are continuously sought to increase value added of waste. 9 3/30/2015 Tytti Peltonen

10 THE FIRST NEXT- GENERATION BIOPRODUCT MILL IN THE WORLD

11 The first next-generation bio-product mill in the world is planning the biggest investment in the forest industry in Finland (EUR 1.1 billion) Annual pulp production 1.3 million tonnes Use of wood 6.5 million m³ annually Efficient production of high-quality pulp Resource-efficient way of using all production side streams Does not use fossil fuels Helps Finland to reach its targets for the use of renewable energy Final investment decision will be made during spring New mill operational in 2017.

12 Growing demand for bleached softwood pulp Global demand for bleached softwood pulp grows steadily Growth is strongest in Asia, especially in China million tonnes Demand for softwood pulp +9% However, the supply/demand balance of bleached softwood market pulp is expected to stay over 90%*, if current situation endures * PPPC, Nov (incl. investment decisions made)

13 The use of domestic wood can be increased sustainably million m³ Forest growth Industrial use of wood Sustainable harvesting potential Imported wood Use of domestic wood Source: Finnish Forest Research Institute

14 The share of bioenergy will increase without subsidies -forest industry produces 70% of the renewable energy in Finland FOREST ENERGY Appr. 10% SAWLOGS Appr. 25% SAWMILLS AND PLYWOOD MILLS PRODUCTION OF BIOENERGY 1.0 TWH 1.0 TWH PULPWOOD Appr. 60% BIOPRODUCT MILL 9.6 TWH TOTAL 9.0 million m 3 Energy self-sufficient Fossil free Increase of over 2.0 percentage points in the renewable energy in Finland

15 DEVELOPMENT PATHS TOWARDS NEW BIOPRODUCTS

16 New biofuels from bark, dust and energy wood Producer gas from bark and sludge Sulphuric acid and methanol New bioproducts PULPWOOD SLUDGE Biogas and solid biofuel PULP Biocomposites Fertiliser and earth work material New textile fibres

17 Unique ecosystem for bio-economy will be born The new bio-product mill will create a globally unique ecosystem Over 2,500 jobs in the whole value chain in Finland Significant opportunity for small and medium-sized enterprises Close collaboration with the city of Äänekoski in various areas incl. water purification and district heating

18 Äänekoski industry park

19 Did you know? There are over 500,000 people in Finland working for forest industry or related operations.

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