ENVIRONMENTAL PERFORMANCE IN 2011 UPM Madison

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ENVIRONMENTAL PERFORMANCE IN 211 UPM Madison

UPM CORPORATE ENVIRONMENTAL STATEMENT 211 UPM paper and pulp mills This publication, UPM Madison Environmental Performance in 211, is the mill s appendix to the shared Environmental Statement 211 for UPM paper and pulp mills. The Environmental Statement for UPM paper and pulp mills is available at www.upm.com. UPM Madison its upper reaches, including rainbow, brook and brown trout as well as landlocked salmon. Due to efforts by many, the water quality has improved dramatically over the last 2 years, increasing the recreational use of this vital natural resource. Wood pulp was first manufactured on the existing site in 1889. Today, Madison manufactures supercalendered paper used by printers and publishers of magazines and catalogs. The facilities include a roundwood handling and storage operation, a drum debarking and pressurized groundwood pulp manufacturing system, facility offices, three power boilers, two hydroelectric generating stations, and one papermachine. UPM Madison (Madison) is a member of UPM The Biofore Company. This environmental statement is prepared for all operations associated with the Madison facility for the calendar year 211. UPM Madison is located in Madison, Maine along the Kennebec River. The River originates from the outflow of Moosehead Lake in Greenville, Maine, discharging into the Atlantic Ocean in Merrymeeting Bay, a total distance of 17 miles. It is home to a thriving coldwater fishery in Roundwood sourced in compliance with SFI Fiber Sourcing and FSC Controlled Wood Standards serves as the basis for the pressurized groundwood pulp production. The Madison manufactured groundwood pulp along with purchased chemical pulp, certified to the PEFC and/or FSC Chain of Custody standards, is the foundation for the UPM Max and UPM Eco supercalendered paper. Paper optical properties are enhanced by the addition of Precipitated Calcium Carbonate, which is also manufactured onsite by a third party utilizing the carbon dioxide from the power boiler emissions. UPM Madison Production capacity Approximately 2, metric tonnes Workforce in 211 245 employees Products Supercalendered (SC) paper for magazines and catalogs UPM Max (SCA Offset, Rotogravure) UPM Eco (SCB Offset, Rotogravure) 2 UPM MADISON, ENVIRONMENTAL PERFORMANCE IN 211

Environmental performance in 211 UPM Madison (Madison) operates on the premise that continuous improvement is a critical factor in meeting stakeholder expectations. In keeping with this operating philosophy, Madison seeks to minimize its impact on the environment, to maintain a safe and healthy workplace and to be a leader in environmental stewardship. The philosophies of Waste and Pollution Prevention, compliance with all environmental regulations and Continuous Performance Improvement have been adopted at Madison. In following these philosophies, a water use survey was conducted in conjunction with the University of Maine. The findings served as the basis by which the current water use reduction program was developed and implemented in November 211. Additionally, a task team was created to reduce the loss of fibers and filler to the sewer, with the ultimate goal to reclaim as much of this raw material as possible for subsequent reuse. result in reduced emissions of particulate matter, sulfur dioxide and nitrogen oxide. In January 211, Madison expanded its fiber certification program from solely FSC Chain of Custody and Controlled Wood certification to include PEFC and SFI Chain of Custody. Additionally, the SFI Fiber Sourcing Claim was achieved. Certified fiber use increased from 12.9% of the total fiber procured in 21 to 42.9% of the total purchased fiber in 211. Certified product sales increased by 5.9% in 211 vs. 21. Successful external audits of the Madison ISO 141:24 and FSC certification systems were conducted in 211, with both programs maintaining certification status. In December 211, the oil-based power boilers were converted to be capable of operating with natural gas. This conversion and subsequent use of natural gas will E. Russell Drechsel General Manager Daniel J. Mallett Manager of Sustainability Certificates Environment Management System: ISO 141:24 Chain of Custody: Program for the Endorsement of Forest Certification (PEFC), Forest Stewardship Council (FSC), Sustainable Forest Initiative (SFI) Promoting Sustainable Forest Management www.pefc.org UPM MADISON, ENVIRONMENTAL PERFORMANCE IN 211 3

Air Air emissions are primarily associated with the operation of the three power boilers that provide heat and steam to the operations. Additional emissions are associated with purchased electricity. NITROGEN OXIDE EMISSIONS 25 2 15 t/a Emissions to the atmosphere were less than the levels measured in 21, continuing the trend that began in 27. The 211 reductions are attributable to the continued emphasis on energy conservation. No. 6 Fuel Oil usage has been reduced by 19.1% over this 4 year period. In 211, electrical consumption in the groundwood pulping operation was reduced by 5.7% due to the installation of several energy efficient grinder stones in place of the existing units. Overall electrical usage was reduced by 4.8% at the site in 211 as compared to 21. A major project undertaken in December 211 was the conversion of two of the three power boilers to operate with natural gas or No. 6 fuel oil, which will result in a significant reduction in the air emissions associated with the Madison facility. 1 5 2 3 4 5 6 7 8 9 1 11 SULFUR DIOXIDE EMISSIONS t/a 1,5 1,2 9 6 3 2 3 4 5 6 7 8 9 1 11 FOSSIL CO 2 EMISSIONS t/a 15, 12, 9, 6, 3, 2 3 4 5 6 7 8 9 1 11 4 UPM MADISON, ENVIRONMENTAL PERFORMANCE IN 211

Water All process wastewater generated from the Madison manufacturing process is treated by the Anson-Madison Sanitary District. This quasi-municipality operates the treatment plant designed to treat the municipal wastewaters generated in the community in addition to the Madison effluent. Treatment consists of primary sedimentation followed by a large aeration lagoon that promotes biological treatment. Since 26, no deviations of the terms and conditions of the Federal NPDES waste discharge permit have occurred. As committed to in the 211 ISO 141:24 goals, Madison continues to explore methods to reduce the flow and loading to the Anson-Madison Sanitary District treatment plant. Results of these efforts were first realized in November 211, with the full impact of these efforts to be achieved in 212. BIOCHEMICAL OXYGEN DEMAND 25 2 15 1 5 2 3 4 5 6 7 8 TOTAL SUSPENDED SOLIDS 15 12 9 6 3 2 3 4 5 6 7 8 9 9 1 1 kg/a 11 kg/a 11 PROCESS WASTEWATER 1 mill. m 3 8 6 4 2 2 3 4 5 6 7 8 9 1 11 Waste The two main waste streams generated at the Madison facility are wood waste from the roundwood debarking operation at the pressurized groundwood mill and sludge from the Anson-Madison Sanitary District. All wood waste is utilized either as a biofuel for local power boilers or as a bark mulch for local landscaping contractors. The majority of the sludge is utilized by a local commercial compost facility for its final product. The remainder of the sludge is landfilled. An initiative to close the landfill by August 214 was established in 28. Therefore, since 28, the volume to the landfill has increased. In 211 one third of the landfill was permanently closed and successfully capped. Upon filling of this site, the goal is to utilize 1% of the sludge generation at the compost facility. In 211, Madison was reclassified by the U.S. Environmental Protection Agency as a Small Quantity Generator of Hazardous Waste from a Large Quantity Generator of Hazardous Waste. This change was due to the Madison Waste Minimization practices implemented in previous years. All Universal Wastes are collected and recycled by a third party. 2,5 2, 1,5 1, 5 SOLID WASTE TO LANDFILL t/a 2 3 4 5 6 7 8 9 1 11 UPM MADISON, ENVIRONMENTAL PERFORMANCE IN 211 5

Environmental parameters in 211 The figures related to production as well as raw material and energy consumption are published as aggregated figures on group level in the UPM Corporate Environmental Statement 211. Production capacity Paper 2, t Raw materials and additives Energy Air emissions Pulp Roundwood Fillers Process Chemicals Other Fossil Fuels Purchased Power Carbon Dioxide, CO 2 (fossil) Nitrogen Oxide, NO X Sulfur Dioxide, SO 2 Particulates Carbon Monoxide, CO See UPM Environmental Statement for more informations 1% Fossil Fuels See UPM Corporate Environmental Statement for more information 82,5 t 16 t 51 t 19 t 18 t Water intake Process and cooling water 7,, m 3 Water emissions Waste Mill area Effluent Volume BOD 5 Solids Phosphorus Nitrogen Ash Woody Materials (Bark) Mixed Office Paper Metals Hazardous 3,3, m 3 8 t 6 t 16 t 5 t.6 t 8,9 t 35 t 71 t.12 t 21.5 ha 6 UPM MADISON, ENVIRONMENTAL PERFORMANCE IN 211

Performance against targets in 211 Target 211 results Action items undertaken Reduce Freshwater Usage in the Manufacturing Operations by 5% as compared to 26 Usage Levels. Increase the use of Certified Fiber (FSC/SFI/PEFC) to 25% in 211. Reduce Greenhouse Gas Emissions by 1% in 211 as compared to 29 levels. Actual reduction measured at 16% vs. the 5% reduction standard Actual Certified Fiber Composition of Finished Product at 42.9% vs. the 21 Certified Fiber Composition of 12.9%. Measured Greenhouse Gas Emissions reduced by 13% as compared to 29 levels. University of Maine Water Use Study Replacement of Packing with Mechanical Seals Clear Whitewater Use in place of Freshwater Achieved SFI Fiber Sourcing, SFI Chain of Custody, PEFC Chain of Custody certification in January 211, expanding the certified fiber base from FSC FSC Chain of Custody Kraft Pulp qualified and utilized in 211 Implemented energy efficiency projects Installed 2 energy efficient groundwood stones Installed energy efficient lighting throughout the mill Reduced No. 6 Fuel Oil Combustion by 13% Installed process water heat exchanger Targets for 212 Target Deadline Responsible Achieve a target of 17. m 3 /metric tonne for wastewater flow to the Anson Madison Sanitary District. Achieve a target of 19. kg/metric tonne for total suspended solids discharged to the Anson Madison Sanitary District. Reduce GHG emissions by 2% in 212 as compared to 211 levels. 12/212 Mill Development 12/212 Mill Development 12/212 Energy Mill Development UPM MADISON, ENVIRONMENTAL PERFORMANCE IN 211 7

UPM Madison P.O. Box 129 Madison, Maine USA Tel. +1 27 696 337 For further information, please contact: Daniel Mallett Manager of Sustainability Tel. +1 27 696 1116 e-mail: daniel.mallett@upm.com www.upm.com Russell Drechsel General Manager Tel. +1 27 696 1228 e-mail: russ.drechsel@upm.com 6/212