Metsä Board Sustainability Review 2023

We promote circular bioeconomy and influence key initiatives

We advance the role of the forest industry and wood-based products in mitigating climate change and securing biodiversity. We also increase the understanding of fresh fibre as an enabler of the fibre cycle, the benefits of wood fibre-based pack- aging materials, and product and food safety.

One of the commodities is wood, including paperboard, packag- ing and boxes. The regulation entered into force in all member states on the 29th of June 2023 and will be operational from the 30th of December 2024 onwards. According to the regulation, the forest-based value chain must prove that the products are deforestation-free and do not cause forest degradation, are covered by a due diligence statement, and are produced according to national legislation. The regulation concerns most parties in the wood-based value chain from forests to the product manufacturers. Nature restoration regulation The objective of the Nature restoration regulation is to ensure the recovery of biodiverse and resilient nature across the European Union territory by setting area-based restoration measures. These measures will cover a minimum 20% of land and sea areas in the EU by 2030, and all ecosystems in need of restoration by 2050. All habitat types, which are not in good condition, shall be improved to a good condition. Member states must thus prepare national restoration plans to carry out the required actions and

submit these within two years after the regulation enters into force. The regulation is expected to enter into force in spring 2024.

Packaging and packaging waste regulation The European Commission published its proposal to revise the European Packaging and packaging waste regulation in November 2022. Its main targets are to reduce packaging waste as well as to avoid unnecessary packaging, to make all packaging reusable or recyclable by 2030 and to increase recycled content in plastic packaging. The regulation proposal includes several measures affecting the packaging industry, both the materials used and the type of packaging, in order to reduce packaging waste in the member states. An in-principle political agreement was founded on a final version of the regulation at the beginning of March 2024. The text should become applicable 18 months after its entry into force, which is planned for the end of 2024. Sustainable product policy The target of the EU’s Sustainable product policy & ecodesign is to have a framework for setting ecodesign performance and information requirements for products on the EU market. The policy will cover products of all categories, including intermediate products (except food and medical). The European Commission will establish ecodesign requirements to improve several product aspects when relevant to the product group concerned, including durability, reusability, possibility of recovery of materials, pre- sence of substances of concern, and carbon and environmental footprints of a product. Products will have to comply with the policy to be placed on the EU market. The products shall comply with the ecodesign requirements and have a digital product passport (DPP) which provides information to consumers, businesses and investors. The requirements will be set gradually, for the most part per product category. The policy also sets a framework for green public procurement and a framework to prevent the destruction of unsold goods. A first working plan will be published in 2024. Textiles, paper, board, and tissue products are included in the policy. However, paper, board, and tissue products are likely not to be included in the first working plans.

Metsä Board participates in advocacy as part of Metsä Group at the European Union and at a national level, especially in Finland, Sweden and Germany. Metsä Group follows and participates in discussions about forests and biodiversity and influences policy questions related to the bioeconomy and products. Metsä Group has actively influenced several legal initiatives in the EU, including the deforestation regulation, nature restoration regulation, pac- kaging and packaging waste regulation, and sustainable product policy. The company supports EU’s environmental targets and the 2050 climate neutrality target. Metsä Board’s advocacy efforts as part of Metsä Group focus on: • Promoting the recyclability of wood fibre-based packaging and the role of renewable fresh fibre in enabling the fibre cycle. • Increasing the understanding of the role of fresh fibre in product safety and the advantages of sustainable fibre-based food packaging in terms of the environment and health. • Supporting a comprehensive approach to laws that influence forestry practices and the availability of wood raw material as part of the joint production of forest-based ecosystem services. • Energy-related topics in the EU, such as reducing dependence on fossil-based fuels, the opportunities provided by biogenic carbon dioxide capture, and defining renewable energy targets based on something other than the direct energy use of convertible wood biomass. As part of Metsä Group, we are an active member of the Confederation of European Paper Industries (Cepi). Metsä Board has representatives in the 4evergreen alliance’s steering group and in its public affairs and advocacy workstream. 4evergreen represents the entire value chain of fibre-based packaging and its target is to raise the recycling rate of fibre-based packaging to 90 per cent by 2030. Metsä Board also participates in the activities of the European Paper Packaging Alliance (EPPA). This alliance represents the sustainability of wood fibre-based food and food service packaging and the circular economy. Metsä Board is also a member of several national trade and industrial organisations.

During 2023 Metsä Board has been preparing its operations to meet the anticipated new EU regulations.

Deforestation and forest degradation regulation The aim of the EU’s Deforestation and forest degradation regula- tion is to combat deforestation and forest degradation globally. This seeks to ensure that the commodities placed in, or exported from the EU market, do not cause deforestation or forest degra- dation as well as seeking to reduce the EU’s contribution to global greenhouse gas emissions and biodiversity loss. The regulation lays down the rules for production of seven commodities that are causing most of the global deforestation.

Read more about these topics in the Sustainability Statement 2023.

METSÄ BOARD SUSTAINABILITY REVIEW 2023