A sustainable and circular bioeconomy business model of the forest based industries – climate change mitigation potential Tytti Peltonen VP , Corporate Affairs Metsä Group
Key figures 2018 * Internal sales eliminated **Listed on Nasdaq Helsinki METSÄ GROUP | Sales* EUR 5.7 billion | Personnel 9,300 | Renewable energy 28,4 TWh METSÄLIITTO COOPERATIVE | Group’s parent company | Owned by 103,000 Finnish forest owners METSÄ FIBRE METSÄ BOARD** METSÄ TISSUE METSÄ WOOD METSÄ FOREST Tissue and Pulp and Wood supply and Wood products Paperboard Greaseproof Papers Sawn Timber forest services Sales: Sales: Sales: Sales: Sales: EUR 0.4 billion EUR 1.0 billion EUR 2.5 billion EUR 2.0 billion EUR 1.9 billion Personnel: Personnel: Personnel: Personnel: Personnel: 1,500 2,800 1,200 2,400 840 METSÄ SPRING | Innovation Company 3 8 February 2018 Metsä Group
Finland – the largest forest cover in Europe The area of Finland • Finland is the most forested country in 5 % Cities, villages and roads 100+ Europe. Our forests grow more than they 10 % Fields and agricultural use are used MILLION M3 10 % Lakes and rivers • More than 50% of Finland’s forests are owned by private forest owners 75 % • Metsäliitto Cooperative members own Forest nearly half of the private forest area in Finland • Sustainable forest management safeguards biodiversity and enables versatile use of forests 4 02/07/2019
Beyond traditional forest industry PAPER- TISSUE BOARD PAPER COOKING PAPER Bark, branches and top Construction Paper, for renewable energy specialty products PULP WOOD Pulpwood for pulp and PRODUCTS other bioproducts Pulp-based textiles ELEC- Bio- RENEWABLE Logs for sawn timber, TRICITY composites ENERGY LIGNIN plywood and LVL TALL OIL, HEAT TURPENTINE New bioproducts SULPHURIC (in R&D) LIME ACID Biogas PRODUCT GAS Fertilisers Industry All products in BOLD are manufatured by Metsä Group. All other products are manufactured within the industrial ecosystem.
New bioproducts improve existing value chains and create jobs Processing of More value products Processing added & jobs of wood New products from one tree from side streams Recycling and use of side streams
Climate change POPULATION GROWTH RESOURCE SCARCITY mitigation – potential URBANISATION CLIMATE CHANGE of the forest-based industries Sustainable forestry Mitigation actions MAKE Forest renewal – Sustainable forest management Biodiversity – Production: energy & resource PROCURED efficiency and breakthrough 81% USED WOOD WOOD of board packaging technologies SAWN TIMBER is recycled in Europe PULP PLYWOOD AND – Recyclable and long-term use products Using fresh fibre KERTO LVL ensures PAPERBOARD availability of – Renewable energy from side streams TISSUE PAPER recycled fibre: USE AND fibres are COOKING used on avg. RE-USE PAPERS 3.5 times. BIOCHEMICALS PULP-BASED RENEWABLE TEXTILES ENERGY LIGNIN-BASED PRODUCTS UTILISED SIDE STREAMS R&D
Metsä Group’s 2030 sustainability objectives Supporting UN Sustainable Development Goals (SDG’s) WE WORK FOR A BETTER WE BRING CLIMATE AND ENVIRONMENT THE FOREST TO YOU • Increasing the amount of carbon • Fossil free mills stored in forests and products • Resource efficient production • Safeguarding biodiversity WE OFFER WE CREATE WELL-BEING SUSTAINABLE CHOICES • Responsible corporate culture • Fossil free raw materials • Accident-free work environment • Sustainable supply chain 8
Metsä Group is a significant carbon sink + 1 500 000 Fossil CO 2 - 26 000 000 Growth + emissions - 2 000 000 Products storing carbon Forestry* Production - 8 500 000 tCO 2 Logistics Products replacing fossil _ Fossil fuels + 18 000 000 Sales materials _ * Forests owned by the members of Metsäliitto Cooperative 9
Investments to support low-carbon circular bioeconomy • In 2015-2018 Metsä Group invested 2 billion EUR in the European bioeconomy New bioproduct mill in Äänekoski, Finland (1.2 billion EUR) – • In 2018 Metsä Group established a new innovation company Metsä Spring Ltd Identifies and develops new business opportunities in sustainable forest- – based bioeconomy and circular economy – Textile fibre demo plant investment • Metsä Group is planning three new investments worth 2 billion EUR – New bioproduct mill in Kemi, Finland New pine sawmill in Rauma, Finland – – First phase in renewing the Husum pulp mill, Sweden – Implementation in 2019 - 2023 10
Successful market-based and resource-wise bioeconomy • Competitive forest industry means upgrading each part of the wood to its highest value • Our products succeed in international market and have great growth potential without regulatory subsidies • Healthy established businesses enable investing into new innovations • Public co-funding of R&D&I accelerates the development of new high-risk technologies 11
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