METSÄ FIBRE'S ANNUAL REVIEW

2013

PEFC/02-31-120

2 CEO'S REVIEW4 METSÄ FIBRE 20136 PRODUCTS AND SERVICES8 INTERNATIONAL BUSINESS10 SUSTAINABILITY14 MANAGEMENT OF ENVIRONMENTAL IMPACTS16 ENVIRONMENTAL BALANCE

PUBLISHERMetsä Fibre OyP.O. Box 3002020 Metsä, Finlandtel. +358 104 612 www.metsafibre.com

The annual review is available in PDF format in English, Finnish and Chinese at www.metsafibre.com.

Image on the cover: Metsä Fibre's long-fibre pulp, Labtium OyCover: Carta Integra 210 g/m2, interior: Galerie Art Silk 130 g/m2

Graph on the cover: Pulp production at Metsä Fibre

1,000 tonnes

2009

2,500

1,500

2,000

2012 201320112010

1,314SALES EUR MILLION

2012: 1,274

+3%

0%873PERSONNEL31 DECEMBER 2013

2012: 876

197OPERATING RESULT EXCL. NON-RECURRING ITEMS, EUR MILLION

+33%

2012: 148

144ELECTRICITY SELF-SUFFICIENCY RATE%

2012: 151

-24%27INVESTMENTS EUR MILLION

2012: 35

+3%2,297PRODUCTION 1,000 TONNES

2012: 2,237

71EQUITY RATIO %

2012: 65

29RETURN ON CAPITAL EMPLOYED %

2012: 23

13NET GEARING %

2012: 16

8.7LOST-TIME ACCIDENTFREQUENCY RATE

2012: 7.9

-10%

Metsä Fibre is a world-leading producer of softwood pulp. Our products – sustainably and cost-efficiently produced Botnia pulps – are specially developed for the production of high-quality tissue and printing papers, specialty products, and board. Our pulp mills in Finland employ some 900 people. Our sales in 2013 amounted to approximately EUR 1.3 billion. Metsä Fibre is part of Metsä Group.

LEADING PULP PRODUCER

2 CEO'S REVIEW

THE STRONGEST OPERATOR IN THE MARKET PULP BUSINESS

CEO'S REVIEW

The year 2013 saw steady development in Metsä Fibre. The demand for pulp was stable in all of our market areas. The overall situation was overshadowed by weak economic growth in Europe and the overcapa­city of several product types in the Asian market due to substantial paper machine investments.

Our mission is to be the strongest operator in the market pulp business supported by success factors such as customer expertise, cost effectiveness and continuous development both as individuals and as an organisation. In addition to our financial performance, we measure our success with feedback collected from customers and other stakeholders. Based on these, we draw up development plans which are implemented in our daily work.

A STRONG PRODUCT PORTFOLIO

As our customers manufacture a variety of products, the quality requirements of pulp vary based on the properties of the end product. The diverse Botnia product family is our strength, enabling us to offer pulp grades from our mills that best meet customers' needs. Our prod­uct portfolio was strengthened in summer 2013 when Joutseno mill started up its new polysulphide process. The Botnia Nordic+ grade provides competitive advantages to our customers who value tensile strength and low pulp beating energy consumption, in particular.

Metsä Fibre operated in accordance with its customer strategy in 2013 – we deepened shared development work bringing added value for several customers. We also renewed our customer interface operat­ing model and introduced new forms of cooperation with our custom­ers, such as the innovation days to seek new, shared development pro­grammes for both the customers and Metsä Fibre.

THE MORE EFFICIENT, THE BETTER

Metsä Fibre's financial competitiveness creates prerequisites for a long­term focus in operations on different economic cycles. To this end, continuous development of cost effectiveness is a key aspect of our work. Effectiveness is created by countless small measures as well as mill maintenance ensuring the continuity of production.

In 2013, we increased our production by 60,000 tonnes from the previous year. This positive development was the result of investments

CEO'S REVIEW 3

CEO'S REVIEW

and improved reliability of operations at the mills achieved by developing preventive mainten ance.

REDUCED ENVIRONMENTAL IMPACT

Our goal is to gradually reduce our environ­mental load. The measures we take are the same as those we use to improve production effi­ciency: steady operation and a high utilisation rate. Renewing our process equipment improves the efficiency ratios of processes and thus reduces the environmental impact. The emis­sion values of Metsä Fibre's mills already meet the definitions and emission limits of the best available technology (BAT) being prepared in the EU.

Our position as one of the largest produ­cers of bioenergy in Finland is a good indica­tion of our resource efficiency. We sell renew­able energy to the market as electricity, wood fuel and heat. Over ten per cent of our sales come from bioenergy and biochemicals. Our mills primarily run on bioenergy produced in the pulp making process, and determined development of our energy efficiency thus increases the share of bioenergy sold.

A MOTIVATED PERSONNEL IS AN ASSET

Personnel’s competence and actions in accord­ance with the company’s objectives and values are fundamental to good performance, both in working with our customers and financially. All Metsä Fibre employees conduct development discussions, and development plans are drawn up for every employee annually. Competence development is monitored by means of self­evaluations, for instance. High­quality supervisory

work is a prerequisite for a good working envir­onment and motivation. In 2013, Metsä Fibre organised a training programme for all supervisors. Its aim was to strengthen the shared operating culture and supervisors’ skills in various management situations.

WE WILL FULFIL OUR CUSTOMER PROMISE

In 2014, we will continue our development as a leading operator in the pulp market, with Nordic softwood pulp as our main product. Our customer expertise will set us apart in the market as our competent resources support the development of our customers' business. We will systematically develop our personnel's competence and improve our operating pro­cesses in a determined manner. We will fulfil our customer promise: the Fibres of success.

Ilkka Hämälä

CEO

THE DIVERSE BOTNIA PRODUCT FAMILY IS OUR STRENGTH, ENABLING US TO OFFER PULP GRADES THAT BEST MEET CUSTOMERS' NEEDS.

METSÄ FIBRE 2013

+3%

+33%

4 METSÄ FIBRE 2013

PRODUCTION 2009 2010 2011 2012 2013 CapacityISO

9001ISO

14001ISO

50001OHSAS 18001

ISO 22000

PEFC COC

FSC COC/CW

Joutseno 470 595 603 606 604 690 x x x x x x x

Kemi 490 534 532 539 564 590 x x x x x x x

Rauma 476 544 567 573 612 650 x x x x x x x

Äänekoski 441 502 503 519 516 530 x x x x x x x

TOTAL 1,878 2,173 2,205 2,237 2,297 2,460

Capacity utilisation, % 86 93 93 93 95

Metsä Svir

1,000 m3 sawn goods 193 208 193 221 244 250 x x1) x x

1) Metsä Svir ISO 14001 certificate includes the Energy Efficiency System (EES)

197OPERATING RESULT EXCL. NON-RECURRING ITEMS, EUR MILLION

2012: 148

1,314SALES EUR MILLION

2012: 1,274

METSÄ FIBRE 2013Metsä Fibre is one of the leading pulp

producers in the world. The company

responds to changes in the markets by

continuously developing its operations and

allocating resources according to demand.

Continuous renewal is the key to future

success.

SALESBY MARKET AREA, %

Finland 53Rest of Europe 24Asia 21Rest of World 2

SALES BY MARKET AREA

Safety observations Usability observations Initiatives Environmental observations Use of auditions Innovation forum portal Inventions

METSÄ FIBRE 2013 5

EVENTS IN 2013

The production of the new Botnia Nordic+ pulps started in Joutseno, Finland in

summer with commissioning of the new polysulphide-using cooking process.

The stable positive development in the pulp market continued and profitability of

Metsä Fibre improved from the previous year.

Metsä Fibre reached a new annual production record of 2,297,000 tonnes. Among

individual production plants, the Kemi and Rauma mills also broke their records.

Metsä Fibre operates on the global market, affected by structural changes in market areas as well as end product grades. The focus of the pulp market, which is growing at a rate of approximately two per cent annually, has shifted to the emerging markets; in particular, demand for tissue paper and board manufac­tured from fresh forest fibre is increasing. We respond to the changes by developing our operations and allocating resources according to demand. While Europe will be our main market in the future as well, approximately a quarter of Metsä Fibre's pulp is sold to Asia. Our objective amidst future challenges is clear: we will be our customers' most reliable partner.

A YEAR OF STEADY GROWTH

In 2013, the pulp market remained fairly stable. Good demand for softwood pulp, in particular, and the increased dollar­denom­inated prices maintained sales and profitabil­ity at a good level. Metsä Fibre's sales were EUR 1,314 million and the operating result excluding non­recurring items was EUR 197 million, which is approximately 30 per cent higher than the result in 2012. We believe that the softwood pulp market will remain bal­anced in 2014.

RENEWAL IS THE ONLY WAY TO SUCCESS

As a pioneer in the industry, Metsä Fibre renews its operations continuously and thus ensures success. In 2013 the company's largest investment was carried out at the Joutseno pulp mill where a new polysulphide cooking process began. With it, Metsä Fibre brought the Botnia Nordic+ softwood pulps to the market. They include new properties that customers can utilise in the development of their own pro­cesses.

In 2013 Metsä Fibre’s R&D focused on supporting the use of polysulphide pulp. In addition, Metsä Fibre studied fossil­free options for the pulp mill concept and the reduction of water usage in the pulp process. The company is exploring new business opportunities by participating in research programmes of the Finnish bioeconomy cluster (Fibic), among other activities.

CONTINUOUS DEVELOPMENT

Our competitiveness is not built on timely investments alone; we continuously improve our operations. Daily development efforts to improve steady­state production and the pursuit of improved results throughout the

organisation played a significant role in Metsä Fibre's new annual production record of 2,297,000 tonnes.

The mills’ life­cycle plans steer our pro­cesses development. One of our main goals is to reduce environmental impacts of our opera­tions. In 2014, investments in the Joutseno mill’s recovery boiler and chip silo will reduce

emissions into the air and odorous gases. The modernisation of the Kemi mill’s automation system will ensure the mill's opera tional reli­ability also in the future. State­of­the­art production units with low environmental impact will guarantee Metsä Fibre's success in the changing operating environment.

In 2013, Metsä Fibre recorded some 8,850

ideas and improvement suggestions. Ideas

with the most potential have resulted in

new products, services and process

changes. We believe that an innovative

operating culture is the best way to achieve

growth and success.

The innovation process and tools adopted by the

company ensure that the ideas of Metsä Fibre's

employees and stakeholders are not left on

the shelf, and that innovation activity is

established as part of daily routines; it is part

of what we do alongside production. All

employees are encouraged to come up with

ideas, which are then refined together.

Customers and other partner networks

play a significant role in Metsä Fibre's prod-

uct and process development. Through close

A WEALTH OF IDEAS

cooperation with customers, we can translate

their needs into new products and services.

Metsä Fibre won the Laatukeskus Excel-

lence Finland's Quality Innovation of the Year

2013 competition with Botnia Nordic+ soft-

wood pulp. Taking part in the quality innova-

tion competition is primarily a way to accelerate

ideas into innovations and sharpen Metsä Fibre's

innovation activities, but winning the award is

also proof of our innovation culture.

8,850 IDEAS12.6/EMPLOYEE

PRODUCTS AND SERVICES

3,000

2,500

2,000

1,500

1,000

500

0

2009 2010 2011 2012 2013

Softwood pulp Hardwood pulp

PULP DELIVERIES 1,000 TONNES

PULP END USE %

6 PRODUCTS AND SERVICES

Metsä Fibre manufactures approximately 2.3 million tonnes of softwood and hardwood pulp annually for the production of high­quality tissue and printing papers, speciality products, and board. We also sell the pulp of our principals Metsä Board and Cenibra. In 2013 we sold and marketed approximately 3.3 million tonnes of pulp primarily to Europe and the Far East. One tenth of Metsä Fibre’s sales consist of other bio­ products, such as bioenergy and biochemicals such as tall oil and turpentine.

THE BOTNIA BRAND IS OUR STRENGTH

Our strength in the steadily growing market is the Botnia brand. In addition to first­class pulp, Metsä Fibre has the strongest service concept in the industry, which is designed to improve customers' competitiveness. Our competitive advantage is generated by our special expertise in pulp fibre and added value services. We carry out joint product develop­ment projects to develop new technical and logistics solutions, which improve our cus­tomers’ process and end products.

For example, the new, awarded additions launched in the Botnia product range in 2013 – Botnia Nordic+ polysulphide pulps – offer significant benefits to tissue and fine paper customers, in particular. Customers can utilise the pulps’ new technical properties in paper production when developing their own pro­cesses. The Botnia Nordic+ pulps are devel­oped in close collaboration with customers.

We continuously develop new services that help our customers obtain the best be nefits from our fibres. For example, with the

HIGH-CLASS PRODUCTS AND SERVICES Metsä Fibre manufactures renewable and

recyclable pulp for the production of paper,

board and speciality products under the

Botnia product brand.

PULP END USE %

Printing papers 32Tissue papers 23Board 32Others 4Speciality products 10

PRODUCTS AND SERVICES 7

RFID tracking of pulp units, customers can utilise real­time information provided by the Botnia FOX service on the strength character­istics of the pulp they use. Until now, the pulp industry has not been able to provide informa­tion in real­time or target it to a specific pulp unit.

EXPERTISE OF THE ENTIRE COMPANY

AVAILABLE TO CUSTOMERS

The more significant a supplier that Metsä Fibre is to the customer, the more crucial it becomes to find methods of reliable and transparent cooperation and to understand the customer’s business. The customers are served by Metsä Fibre’s responsibility chain, which consists of professionals in sales, production, research and development, technical service, logistics and sustainability. The entire expertise of Metsä Fibre is available to its customers.

BIOENERGYElectricity

Heat, steam

Bark, powder

BIOCHEMICALS Tall oil

Turpentine

PULPSoftwood pulp: Botnia Nordic Pine

Hardwood pulp: Botnia Nordic Birch

Reinforcement pulp: Botnia Nordic Strong

High yield pulp: Botnia High Yield

Polysulphide pulp: Botnia Nordic Pine+ and Botnia Nordic Strong+

THE BOTNIA PRODUCT FAMILY

END PRODUCTS

Tissue paper Board Speciality products Printing papers

Speciality products in the chemical industry and bio fuels

Bioenergy

90% 4% 6%

FUNCTIONING LOGISTICS

TECHNICAL EXPERTISE

CUSTOMERCOST- EFFECTIVE-NESS

HIGH-QUALITY PRODUCTS

SUSTAIN-ABILITY

Real-time information on the quality of fibre

is not yet common. Usually, the information is

only available after a couple of days, however

Metsä Fibre’s Botnia FOX quality simulation

tool makes it possible to obtain information,

for example, on the strength potential of a

pulp batch immediately when it is being

manufactured. The calculation of strength

potential combines pulp manufacturing

theory, pulp process run values, customer

feedback and statistical modelling. Botnia FOX

won the Laatukeskus Excellence Finland’s

Quality Innovation of the year 2012.

Metsä Fibre's customers can also access

the data in Botnia FOX by the RFID tag on the

ONE STEP AHEADpulp unit. Based on the information, a paper or

board manufacturer can adjust to the ratio of

softwood pulp or pulp beating in the paper

machine.

The RFID is a more reliable identification

method than a bar code and provides real-

time information on when the pulp unit was

used and its properties. Metsä Fibre is the

world's first pulp manufacturer to adopt an

RFID system at its mills, domestic ports, a

number of unloading ports and at some of its

customers. Its use will be further extended in

the near future.

Customers are at the core of our operations. Our customer promise – Fibres of Success – contains five elements: high-quality products, technical expertise, functioning logistics, sustainability and cost-effectiveness.

Our pulps, bio-chemicals and bio fuels are of high quality. Our skilled personnel and continuously developing production processes guarantee the even quality of our products.

In addition to pulp, the Botnia product family includes technical services and joint development projects, that help our customers gain the best pos-

sible benefits from fibre and achieve considerable savings.

Functioning logistics means that we deliver products to the right place at the right time.

We operate in a cost-effective and responsible manner. With our products and services, our cus-

tomers can reduce their environmental footprint and make more sustainable choices. Papers and boards manufactured from our pulp meet even the most stringent requirements.

FIBRES OF SUCCESS

INTERNATIONAL BUSINESS

8 INTERNATIONAL BUSINESS

JOUTSENO PULP MILL

CAPACITY 690,000 TPRODUCTS ECF BLEACHED SOFTWOOD PULP PERSONNEL 133

RAUMA PULP MILL

CAPACITY 650,000 TPRODUCTS ECF BLEACHED SOFTWOOD PULP PERSONNEL 120

METSÄ SVIR SAW MILL

CAPACITY 250,000 M3

RAW MATERIAL SPRUCEPERSONNEL 142

ÄÄNEKOSKI PULP MILL

CAPACITY 530,000 TPRODUCTS ECF BLEACHED SOFT-WOOD AND HARDWOOD PULP PERSONNEL 171

KEMI PULP MILL

CAPACITY 590,000 TPRODUCTS ECF BLEACHED SOFT-WOOD AND HARDWOOD PULP PERSONNEL 169

OWNERS

Metsä Fibre is part of Metsä Group and owned by the parent company Metsäliitto Cooperative (50.2 per cent), Metsä Board (24.9 per cent) and ITOCHU Corporation (24.9 per cent).

Metsä Fibre is one of Metsä Group's core operations together with Metsä Board, Metsä Tissue, Metsä Wood and Metsä Forest. Metsä Group is a strong and responsible forest indus­try group that uses renewable Northern wood and fresh forest fibre as the primary raw mate­rials of its high­quality products.

INTERNATIONAL BUSINESSMetsä Fibre is one of the world's leading softwood pulp producers, and its main markets are Europe and the Far East. The combined total capacity of the pulp mills is 2.5 million tonnes of bleached softwood and birch pulp.

MANAGEMENT GROUP

ILKKA HÄMÄLÄ, CEOARI HARMAALA, Senior Vice President, Sales and MarketingISMO NOUSIAINEN, Senior Vice President, ProductionKAIJA PEHU-LEHTONEN, Senior Vice President, Business Development MIKAEL WESTERLUND, Senior Vice President, Finance

BOARD OF DIRECTORS

KARI JORDAN, Chairman, Metsä Group, President and CEOMARTTI ASUNTA, Vice­chairman, Metsäliitto Cooperative, Chairman of the BoardHANNU ANTTILA, Member, Metsä Group, Executive Vice President, StrategyJUHA MÄNTYLÄ, Member, Metsä Forest, Executive Vice PresidentMIKKO HELANDER, Member, Metsä Board Corporation, CEOICHIRO TSUGE, Member, ITOCHU Corporation, Executive Officer

SALES EUR 1.0 BILLION

PERSONNEL 2,800

OWNERSHIP OF METSÄLIITTO COOPERATIVE 91%

TISSUE AND COOKING PAPERS

METSÄ TISSUE

SALES EUR 1.3 BILLION

PERSONNEL 900

OWNERSHIP OF METSÄLIITTO COOPERATIVE 50.2%, METSÄ BOARD 24.9%, ITOCHU CORPORATION 24.9%

PULP

METSÄ FIBRE

SALES EUR 0.9 BILLION

PERSONNEL 2 ,500

OWNERSHIP OF METSÄLIITTO COOPERATIVE 100%

WOOD PRODUCTS

METSÄ WOOD

SALES EUR 1.6 BILLION

PERSONNEL 900

OWNERSHIP OF METSÄLIITTO COOPERATIVE 100%

WOOD SUPPLY AND FOREST SERVICES

METSÄ FOREST

METSÄ GROUP

SALES EUR 2.0 BILLION

PERSONNEL 3,100

OWNERSHIP OF METSÄLIITTO COOPERATIVE 42.8% (HOLDING OF VOTES 62.2%)

PAPERBOARD AND PAPER

METSÄ BOARD

METSÄLIITTO COOPERATIVE OWNED BY 123,000 FINNISH FOREST OWNERSGROUP'S PARENT COMPANY

4.9 EUR BILLION

SALES TOTAL 11,000PERSONNEL

TOTAL

INTERNATIONAL BUSINESS 9

WIESBADEN SALES OFFICE

GERMANY

MILAN SALES OFFICE

ITALY

SHANGHAI SALES OFFICE

CHINA

PRODUCTION

SALES

MAIN MARKET AREAS

RELIABILITYOur success is based on long-term cooperation with our stakeholders. We appreciate the work and competence of each other and strengthen the confidence of our various stakeholders by acting in a consistent and predictable way.

COOPERATIONWe develop our operations in cooperation with our customers and share information and best practices with each other. We operate as one group of companies, utilising mutual synergies and relying on common benefits.

RESPONSIBLE PROFITABILITYWe bear responsibility for the environment, our partners and each other to ensure successful business activities and forestry. Profitability is an absolute prerequisite for the continuous development of operations.

RENEWALWe are aware of future challenges and have the courage to question old practices in order to provide better products and services to our customers in support of their business operations.

VALUES

MISSIONOur mission is to be the most cost-effective and professional

supplier of pulp.

VISION Our vision is to be the most desired producer of high-quality pulp and services that support the customer’s business.

10 SUSTAINABILITY

SUSTAINABILITY

5%

SUSTAINABILITY AT METSÄ FIBRESustainability is based on our company's main mission, vision and values, and is thus an essential part of our operations and daily work. We adhere to Metsä Group’s sustainability programme, and our operations are guided by Group-level objectives. Metsä Group has divided sustainability into four themes that cover the entire value chain of the operations.

THE SMALLER THE ENVIRONMENTAL IMPACT, THE BETTER

All human activity leaves a mark on our planet. Our production is no exception. It is important to use natural resources efficiently and to keep emissions and waste to a minimum.

Our pulp mills produce over 10 per cent of Finland’s bioenergy.

The Joutseno mill uses no fossil fuels while operating normally.

We reduce odour emissions at our mills. The largest project is the replacement of the wood chip silo in Joutseno.

Our products originate from sustainably managed forests. We ensure that five new trees are planted to replace every felled tree. Metsä Group secures the sustainable procurement of raw materials at our production units.

87 per cent of the wood used by Metsä Fibre use originates from certified forests.

We always know the origin of the wood we use. Metsä Group procures the wood we use from sustainably managed forests.

WE BRING THE FOREST TO YOU

IMPROVEMENT OF ACCIDENT FREQUENCY RATE SINCE 2009 OVER

REDUCTION OF FOSSIL CO2 EMISSIONS IN 2013

33%

REDUCTION OF PROCESS WATER VOLUME SINCE 2009

7%

SUSTAINABILITY 11

5 m3WOOD

1,000 kgPULP

8,600ROLLS OF KITCHEN PAPER

Wood is an indefinitely renewing natural resource. We convert wood into safe and recyclable products that improve the quality of life. We know the environmental impact of our products.

Our pulps are completely renewable and recyclable.

About 10 per cent of Metsä Fibre’s sales are generated by bio energy and biochemicals.

Our new Botnia Nordic+ pulps reduce the customers’ need to use energy for pulp beating.

WE OFFER SUSTAINABLE CHOICES

WE CREATE WELL-BEING

We create well-being in workplaces and society as a whole and are committed to global sustainability principles. Safety of both our employees and our partners is our number one priority.

The absence rate due to sickness was 4.1 in 2013 (2012: 4.2).

The accident frequency was 8.7 in 2013 (2012: 7.9).

Metsä Fibre employs approximately 900 people. The indirect employment impact is many times higher.

TO THE LAST BRANCH ONE TONNE OF PULP MAKES ANY OF THESE:

APPROX.

300,000A4-SIZE SHEETS OF PAPER

SUSTAINABILITY

12 SUSTAINABILITY

It is important to us to use energy and natural resources efficiently and keep emissions to a minimum. We also take care of the safety of our employees and partners. Sustainablity is part of our daily operations: we set the objec­

tives in our annual planning and monitor their implementation every day. We are committed to sustainable development throughout the supply chain and also require that our partners do the same.

WE KNOW THE ORIGIN OF THE WOOD WE USE

The raw material for Metsä Fibre’s pulp is wood supplied by Metsä Group from sustain­ably managed forests. This raw material meets certification requirements in terms of wood procurement, pulp production and sales.

Only around 10 per cent of the world's forests are certified. In Metsä Fibre, the pro­portion of certified wood is 87 per cent. We always know the origin of the wood we use and at the same time we ensure the sustainable use and management of forests.

ELECTRICITY SELF-SUFFICIENCY RATE OF METSÄ FIBRE 144%

MILLS’ EXCESS ELECTRICITY IS ENOUGH TO COVER

4THE ELECTRICITY NEED OF SOME

CITIZENS150,000

A SUSTAINABLE CHAIN FROM FOREST TO CUSTOMER Metsä Fibre manufactures products that help customers reduce their environmental footprint and make more sustainable choices. The mills use the best available technology, and Metsä Fibre actively develops its production units and personnel.

IN ADDITION TO MILLS’ OWN USE

FOSSILE CO2 EMISSIONS 1,000 TONNES

EFFLUENT FLOW 1,000 M3

2009

LOST-TIME ACCIDENT FREQUENCY RATE INCIDENTS PER MILLION WORKING HOURS, OWN PERSONNEL

30

25

20

15

10

5

0

2010 2011 2012 2013

Metsä Fibre Finnish

paper industry

BENCHMARKING FINNISH FOREST INDUSTRIES FEDERATION

0

50

100

150

200

250

20132012201120102009

20 000

40 000

60 000

80 000

20132012201120102009

SUSTAINABILITY 13

WE PRODUCE PLENTY OF BIOENERGY

Pulpwood is utilised in full at our mills – it is used to manufacture pulp and to produce bioenergy and biochemicals. Our mills are a significant producer of bioenergy: Metsä Fibre accounts for over 10 per cent of bioen­ergy produced in Finland.

Metsä Group as a whole aims to reduce its carbon dioxide emissions from fossil fuels by 30 per cent and improve energy efficiency by 10 per cent by 2020 from the 2009 level. The CO2 target has been met as a result of energy efficiency efforts and bioenergy invest­ments. For example, the Joutseno pulp mill has invested in a gasification plant which makes it possible to replace natural gas at the mill completely with biofuel made from bark. User experiences are currently being collected for the company’s other mills.

Metsä Fibre’s energy efficiency has improved by approximately three per cent from the 2009 level, and we are working in a determined manner to meet the target. With the 2013 measures alone, the efficiency of the bioenergy business improved by several millions of euros. This was achieved by chal­lenging earlier operating methods, intensify­ing internal cooperation and implementing bioenergy themes in the daily operations.

REDUCING THE BURDEN ON THE ENVIRONMENT

Metsä Fibre aims to improve its environmen­tal performance in a determined manner through investments, developing equipment and operating methods, and by using raw materials efficiently.

Our mills are located in areas with ample water resources. Nevertheless, one of Metsä Group’s shared objectives is to reduce the use of process water by 10 per cent by 2020 from the 2010 level. Metsä Fibre has reduced its water usage by five per cent within the past five years. Our mills have replaced fresh water by reusing water in their processes more effi­ciently. Effluent discharges from our mills have decreased and the organic load to the wastewater treatment plant has been reduced.

Metsä Fibre invests in efforts to reduce emissions and discharges; moreover, the con­trol of emissions into the atmosphere is being improved at several production units to

READ MORE ABOUT METSÄ GROUP’S SUSTAINABILITY ATwww.metsagroup.com/sustainability

improve the well­being of the neighbourhood. Combustion gas emissions from the mills have also been reduced by improving the effective­ness of the combustion gas scrubbers. At Joutseno, investments are being made in the wood chip silo and the recovery boiler in order to reduce malodorous gases, and other emissions to the air.

The amount of waste sent to industrial landfills has been reduced considerably due to increased use of waste in civil engineering and as a fertiliser. Metsä Fibre has reduced the landfill waste by over 30 per cent since 2012.

SHARED SAFETY OBJECTIVES WITH PARTNERS

Metsä Fibre ranks at the top of the forest industry in the world in terms of occupational safety. Long­term efforts have resulted in considerable reductions in accident frequency. The Kemi mill had the best safety status in 2013, with an accident frequency of 7.1, (8.7 in Metsä Fibre as a whole). We will con­tinue our focused efforts to reach the target of zero accidents at work.

Our safety management system prevents accidents before they occur. We emphasise the significance of preventive measures, such as our safety observation system and safety rounds and talks. The safety programme also includes investments in safety attitude train­ing at each mill. Metsä Fibre also requires that its partners commit to occupational safety and responsible operations. The objective is to further improve the level of safety.

SUSTAINABLITY IS PART OF OUR DAILY OPERATIONS.

MANAGEMENT OF ENVIRONMENTAL IMPACTS

14 MANAGEMENT OF ENVIRONMENTAL IMPACTS

Production at the mills was at a good level in 2013. Metsä Fibre increased production vol­umes without increasing water consumption and the specific load of wastewater also con­tinued to decrease in accordance with the company's objectives. All of Metsä Fibre's mills carried systematic work in order to reduce the volume of wastewater. New process technology solutions continue to be sought in order to improve the efficiency of water usage.

Metsä Fibre's wastewater loads were under control during the year under review. The organic load to the mill decreased and the specific load of organic load into waterways remained approximately at the same level as in the previous year. Nutrition loads to water­ways downstream from the production units varied slightly. The wastewater permit limit

was exceeded once. The monthly level of the phosphorus permit limit exceeded at the Kemi mill.

Odours are the most prominent nuisance caused by the mills, especially at the Äänekoski mill. Compared to previous years, odour nuis­

MANAGEMENT OF ENVIRONMENTAL IMPACTS

6

5

4

3

2

1

0

87%80%

SHARE OF CERTIFIED WOOD

ENVIRONMENTAL INVESTMENTS PULP MILLS, EUR MILLION

2009 20112010 2012 20132009 2013

MANAGEMENT OF ENVIRONMENTAL IMPACTS 15

ance increased at the Joutseno and Rauma mills, mostly due to emissions caused by process disturbances. The increase in production vol­umes for its part sets new requirements for the recovery and processing of malodorous gases. Concerning emissions into the atmosphere, the daily permit limit was exceeded in the malodorous gas boiler at the Rauma mill, and the permitted sulphur dioxide content of the recovery boiler was exceeded when heavy fuel oil had to be burned during the mill start­up after the annual maintenance shutdown. The dust permit limit of the lime kiln was exceeded at the Joutseno mill.

The volume of reused waste increased in 2013. In particular, the waste was used as mater ial in civil engineering and as a fertiliser. Sludge and waste that can be burned were processed in the recovery and bark boilers.

DEVELOPMENT PROJECTS

Metsä Fibre continues to develop its environ­mental performance systematically. In order to reduce the wastewater load, water balances were

determined for the mills and options to reduce the wastewater load were investigated. All mills launched projects to reduce water usage.

The sources of odour were investigated at the Äänekoski mill. In addition, a preliminary technical survey on processing wastewaters generated both in the municipality and the

integrated mill site was initiated.The causes of the organic load to the

treatment plant were investigated at the Rauma mill, and the load to the treatment plant was reduced. A decision was made to conduct a survey on reducing strong malodor­

ous gases in Rauma in 2014. Investments will be made in a processing system for mild mal­odorous gases in 2014.

Department­specific COD load sources were investigated and the COD load was reduced in Kemi.

The Joutseno mill's gasification plant was inaugurated in the spring of 2013. The bark gasification plant is a significant bioenergy project replacing natural gas burned in the lime kiln with biogas made from bark. More­over, the mill's wood chip silo and the malo­dorous gas processing system in the silo will be replaced in 2014. The investment will reduce the mill's odour emissions.

In order to develop energy efficiency, the mills implemented several projects to increase the production and reduce the consumption of electricity and steam. The most important basic factor in environmental and energy efficiency is the good usability of the mills. Efforts to pro­mote good usability will continue.

MATERIAL BALANCE

WE IMPLEMENTED SEVERAL PROJECTS TO INCREASE THE PRODUCTION AND TO REDUCE THE CONSUMPTION OF ELECTRICITY AND STEAM.

MATERIALS 2013 2012

RAW MATERIALWood million m3

12.4

12.2

PROCESS FUELSFossil fuels GWh

874

945

WATERProcess and cooling water m3

119,223

109,987

PRODUCTS 2013 2012

Pulp million t

Tall oil tTurpentine tSawn goods m3

Electricity* GWh

Heat* GWh

Biofuel* GWh *Includes only sold energy

2.29784,525

3,642 243,569

596863

1,293

2.23786,436

3,339 220,882

691739

1,463

EMISSIONS 2013 2012

TO AIRSulphur SO2, incl. TRS sulphur t Nitrogen oxides NO2 t Carbon dioxide, fossil t Particles t

1,183 4,046

223,0001,017

713

3,981234,000

1,092

EFFLUENTS AND WASTE 2013 2012

EFFLUENTS Chemical oxygen demand CODcr t

Biological oxygen demand BOD7 t

Phosphorus t Nitrogen t AOX t

29,223

50223

331282

27,169

39725

397277

SOLID WASTE Landfill waste tHazardous waste t

42,853

177

62,664

135

ENVIRONMENTAL BALANCE

16 ENVIRONMENTAL BALANCE

ENVIRONMENTAL BALANCE

JOUTSENO KEMI RAUMA ÄÄNEKOSKI SVIRTOTAL 2013

TOTAL 2012

PRODUCTION

Pulp T 604,421 564,454 611,769 515,951 2,296,596 2,236,972

Sawn wood m3 243,569 243,569 220,882

WOOD CONSUMPTION

Total wood consumption 1,000 m3 3,257 2,896 3,350 2,348 518 12,369 12,219

Certified wood % 84 96 80 90 43 87 85

EFFLUENTS

WASTE WATER

Process water volume 1,000 m3 16,384 14,584 14,500 15,094 393 60,955 61,674

Total suspended solids T 234 400 264 461 18 1,378 1,356

Chemical oxygen demand (COD) T 5,707 8,393 10,260 4,814 49 29,223 27,169

Biological oxygen demand (BOD) T 106 134 133 122 6.7 502 397

Phosphorus (P) T 5.6 6.5 4.9 6.1 0.2 23 25

Nitrogen (N) T 83 126 47 73 2.4 331 397

AOX T 99 64 74 44 0 282 277

AIR EMISSIONS

Sulphur dioxide (as SO2) T 314 142 170 406 0.5 1,033 481

TRS (as S) T 18 31 13 13 0 75 116

NOx (as NO2) T 1,029 1,033 1,082 880 22 4,046 3,981

CO2 from fossil sources 1,000 T 57 62 46 59 0.1 223 234

CO2 from biomass 1,000 T 1,314 1,304 1,291 981 22 4,911 4,720

Particles T 182 140 208 466 22 1,017 1,092

WASTE

Landfill waste T 11,693 0 10,855 14,415 5,890 42,853 62,664

Hazardous waste T 31 52 50 44 0.1 177 135

ENERGY

Wood based fuel use GWh 3,612 3,586 3,551 2,699 60 13,508 12,980

Fossil fuel use GWh 287 220 160 207 0.5 874 945

Purchased electricity GWh -273 -174 -195 32 14 -596 -691

Purchased heat GWh -25 -432 -239 -167 0 -863 -739

SPECIFIC EMISSIONS

SPECIFIC EMISSIONS 17

Metsä Fibre mills 2013 Pulp mills in Sweden 2012

Pulp mills in Finland 2012 BAT max

CHLORINE AND OTHER HALOGENS BOUND TO ORGANIC MATERIAL IN EFFLUENT (AOX) KG /ADT

BENCHMARKING ANNUAL REPORTS

Metsä Fibre mills 2013 Pulp mills in Sweden 2012

Pulp mills in Finland 2012 BAT max

PHOSPHORUS (P) G/ PULP TONNE

BENCHMARKING ANNUAL REPORTS

Metsä Fibre mills 2013 Pulp mills in Sweden 2012

Pulp mills in Finland 2012 BAT max

CHEMICAL OXYGEN DEMAND (COD) KG / PULP TONNE

BENCHMARKING ANNUAL REPORTS

Specific emissions from Metsä Fibre’s and other Finnish and Swedish mills producing bleached sulphate pulp are compared below. The figures for Finnish mills in 2012 come from Finnish Forest Industries Federation and the figures for Swedish mills from Swedish Forest Industries Federation.

SPECIFIC EMISSIONS FROM PULP MILLS IN THE NORDIC COUNTRIES

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Cover: C

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Metsä Fib

re 2014

PEFC/02-31-120

METSÄ FIBREP.O. Box 3002020 METSÄ, Finlandtel. +358 104 612www.metsafibre.com