Our business is based on trees. This is a powerful reason to ensure that forests grow for many generations to come and our plantations meet industry-leading excellence in sustainability performance.
Global megatrends such as climate change, biodiversity loss and population growth pose many urgent challenges. This is where sustainable forestry and plantations come in.
Read more about our commitment to climate positive forestry and promoting biodiversity.
Well-managed forests play an essential role in natural carbon and water cycles, biodiversity and the wellbeing of local communities.
UPM is committed to sustainable forestry, which produces high-quality wood, maintains and enhances biodiversity and water protection, and protects the recreational use of forests. Our commitment covers our own forests in Finland, as well as the timber we source from forests in other parts of the world, such as Sweden and the Baltic States.
The majority of our forests are mixed-stand forests with native tree species. Biogeographically, our forests in Finland are semi-natural boreal forests, while those in the USA are semi-natural northern temperate woodlands.
In Finland, the logs harvested by UPM are used in our sawmills and plywood mills. Pulp production uses the side streams such as wood chips and sawdust from these mills.
Sustainably managed eucalyptus plantations are an ecological and efficient way to produce wood raw material to meet the globally increasing need for wood-based products. Eucalyptus is also an ideal fibre for pulp making – the trees grow fast and seedlings will provide wood within 10 to 12 years.
UPM manages around 459,000 hectares of land in Uruguay - about 300,000 hectares is owned by UPM, with the remainder leased from private landowners. Roughly 60% is planted with eucalyptus, with the remainder consisting of unplanted grassland, infrastructure and protected valuable sites such as native forests.
The plantations provide wood to UPM’s Fray Bentos pulp mill in south-western Uruguay and soon also to the Paso de los Toros mill located in central Uruguay.
All our plantations are certified to both FSC™ (SGS-FM / COC-000606) and PEFC (UY11 / 20080091) forest standards.
Creating jobs in rural areas is one of the main impacts of plantation forestry, where most of the workers are hired locally. These are areas mainly known for producing livestock and levels of unemployment are high, especially for women. However, women make up around 60% of the workforce in all three of UPM’s nurseries in Uruguay.
Besides job opportunities, it is necessary to maintain and develop education, services and infrastructure in these rural areas to keep them populated.
Most of the forestry operations are subcontracted, which creates the opportunity for many entrepreneurs and small and medium sized enterprises to develop. Nowadays there are around 200 contractors providing services in UPM plantations. Besides these, more than 500 other companies provide goods and services to plantation operations. These numbers are expected to increase with the start-up of the UPM Paso de los Toros pulp mill in 2023.
All UPM’s operations outside the mill site – from nurseries and plantations to logistics and transportation – are subject to local taxes in Uruguay. UPM is one of the main taxpayers among Uruguayan landowners.
UPM’s Fomento Programme for rural producers was started in 2006. It offers farmers an alternative for diversifying their business by establishing forest plantations in some areas of their farms - thus creating more value and diversified income. The programme includes alternative commercial options depending on each farmer’s situation. UPM provides tree seedlings, technical advice and assurance of a secure market for the wood. UPM’s Fomento Programme currently includes more than 700 Uruguayan partners.
The most common arrangement is the lease, in which the farmer contributes with his/her land and UPM establishes the plantation having full ownership of the produced wood. The payment for land use is decent and it can be on a fixed annual price per hectare, a share of future production or a combination of both. A minor proportion of the Fomento partners prefer to establish plantations at their own cost and maintain ownership of production. In this case, as UPM provides the tree seedlings, technical advice and assurance of a secure market, it has the first right of refusal for the wood production at the time of harvesting simply by equalling the eventual alternative bid.
UPM promotes a diverse use of its plantation land. Rural producers and people from the communities next to UPM’s plantations can benefit from additional forestry related activities including:
Cattle grazing: Unplanted areas are used by neighbours or other producers for cattle grazing under appropriate grazing contracts. The cattle graze on grasslands around the plantations, benefitting from the shade of the trees. Grazing mitigates the risk of forest fires by keeping the grass low and green.
Honey production: Eucalyptus flowering occurs in autumn, while most of the other vegetation and crops in Uruguay flower in spring. Therefore eucalyptus plantations allow the honey production season to be expanded, making this activity more economically sustainable. Beekeepers can be individual farmers or institutions managing beehives in and around the plantations. All honey producers follow the same protocols and are committed to implementing the manual of good beekeeping practices developed by the state. There are more than 240 beekeepers producing honey on UPM plantations in Uruguay.
Mushroom gathering: Residents of nearby communities gather mushrooms on UPM’s plantations during autumn and spring, following a simple procedure which ensures that this activity is done in a safe and orderly way.
Community engagement is integrated in UPM’s forestry work in Uruguay and also the task of a dedicated team. UPM has introduced a systematic way to interact with every local community near its plantations. Social monitoring surveys are done by an independent third party who interviews community members and contractor employees. The survey is conducted in forestry operations bi-annually and in the communities surrounding UPM’s mill operations every six months.
Read more about the results (Scroll to the bottom of the web page; social monitoring results are below the environmental monitoring results).
Road safety has been set as a high priority topic in local engagement work. Based on the results of the impact assessment, a UPM team visits the communities in its area of influence and engages with community leaders and local residents. After initiating this relationship there can be community days, visits to the mill and plantations or working groups involving local producers.
UPM’s plantations in Uruguay are established on former grazing land and they don’t replace native forests. The land cover in Uruguay corresponds to the Pampa biome characterised by extensive grasslands with shrubs and the lack of extensive forest cover. Uruguay’s native forests are mainly located next to water courses and rocky hilly areas, covering about 5% of the land area, and are protected by law. Uruguay does not have rainforests like its neighbour Brazil. As a result of the total protection of the native forests ruled by the 1987 Forestry Act, the area of native forests increased in the last 30 years from around 670,000 ha to more than 750,000 ha.
Establishment of plantations began in Uruguay at the start of the 1990s. Uruguay's Forest Law clearly structures land use based on the characteristics of the land. Tree plantations are established on land classified as forest priority soils. These are mainly sandy soils, with low fertility for traditional uses of land, but they are very productive for forest plantations. Thus tree plantations do not take land away from e.g. food production.
All UPM plantations are certified to both FSC™ (SGS-FM / COC-000606) and PEFC (UY11 / 20080091 forest standards. We only use agrochemicals and fertilisers that are allowed by both certification schemes. The intensity of use of agrochemicals in forest plantations is much lower than, for example, in agriculture, as these products are required only during the first year of plantations which are harvested every 10 to 12 years. All environmental aspects of the plantations are controlled annually by external audits as part of the certification process.
Located in the temperate zone, Uruguay is a humid subtropical country where the rainfall makes it well suited for growing tree plantations. The annual rainfall is 1,200 to 1,500 mm and it is well distributed during the year without a regular dry season.
On average, water reaching the water courses, which finally ends up going to six major water bodies (e.g. the rivers Río Uruguay and Río Negro), represents around 35% of the total rainfall. This means that water is an abundant resource in Uruguay.
The level of the water courses in Uruguay depends primarily on the rains, much more than on land use, and is therefore very fluctuating. This fluctuation reflects the amount of rain fallen in previous days, ranging rapidly from a minimal flow to a flooding situation. The impact on a plantation block is normally temporary, being reset in the next rainfall event.
For plantations in general the distribution, regularity and availability of sufficient water is essential. In addition to the amount of annual rainfall and its variability over the years, it is important to analyse the monthly distribution of rainfall.
Water usage of eucalyptus plantations has been studied and monitored for decades. In comparison to most tree species, eucalyptus uses less water. Planted eucalyptus species are very efficient in terms of biomass production per water unit usage. Eucalyptus does not use groundwater or reduce groundwater recharge. Tree plantations reduce rapid run-off through the soil surface, thus minimising soil erosion.
During periods of severe drought, not common in Uruguay, eucalyptus trees stop growing and recycle the water inside their own biomass. They can even start dropping leaves to keep their need for water for survival at a very minimum level if there was a more severe drought.
Soils in Uruguay are relatively shallow, either because of a clay-rich layer (B horizon) that prevents root development or because of a rocky layer (C horizon). In most cases the effective rooting depth does not exceed the first metre. Therefore eucalyptus growing in Uruguay does not use groundwater as it never reach the aquifers.
Changes in precipitation and water availability have always been one of the key considerations in planning of any industrial operations including plantations grown by UPM.
In 2019 UPM engaged with the Finnish Meteorological Institute to further study the physical impacts of climate change, considering aspects such as water availability and weather extremes. Read the study
Impacts to water are taken into account in forest management:
Water monitoring studies have been carried out by the National University of Uruguay, and other institutions together with other forestry companies, to monitor the effect of plantations on water balances over 25 years. The main results so far indicate that the plantations’ land use, in comparison to grasslands under cattle grazing:
Eucalyptus plantations require relatively low amounts of nutrients to grow and are very efficient in using the available nutrients, especially when compared to agricultural crops. This is supported by the harvesting method used by UPM where leaves, branches and bark are left on site to decompose and recycle nutrients back to the soil.
Monitoring studies undertaken since 2010 indicate that forest plantations can create some changes in the soil. These changes include an increase of the organic carbon, pH reduction and a reduction of cations (positively charged ions) such as calcium, magnesium and potassium. These modifications are not affecting forestry productivity, at least for the initial three or four rotations. If needed, these can be managed by adding standard natural soil amendments (e.g. dolomite or calcite) and minor amounts of fertilisers, clearly lower than the amounts used in agricultural crops.
If plantation areas were to return to pastures or other land uses in the future, changes in the soil chemistry can be managed with proven and affordable agricultural practices. Probably the best proof for this is the development of agriculture in vast areas of Australia which had been under eucalyptus forests for centuries.
Soil carbon calculation is still an under-investigated area in general. The best review available in Uruguay about the effect of plantations on soil organic carbon is in the PhD thesis conducted by Hernandez (2016) in Chapter 3. In the discussion section Hernandez reported:
UPM Forestal Oriental has a soil monitoring programme started in 2010, based on paired measurements of plantations and their adjacent grasslands. The results indicate a significant increment in the SOC in the A horizon under plantations (no statistically significant differences were found in the B horizon).
Finally, there are internationally accepted rules for carbon accounting, e.g. those of The Intergovernmental Panel on Climate Change (IPCC). The IPCC Special Report on Climate Change and Land use (2019) indicates that afforestation and reforestation result in capturing more atmospheric CO2. Carbon stocks of a forest plantation are much higher than in old grazing land given that the above and below ground biomass of the former is much higher than in the latter.
Biological surveys have been conducted in UPM’s plantations since the early 1990s in order to identify and classify species and for ecosystems to be protected. Today these include native forests, wetlands, continental dunes, unique areas for protecting specific birds or other animals, and grasslands.
More than 35% of UPM’s gross farm areas maintain the existing vegetation, most of which are grasslands, creating an extremely valuable opportunity for conserving this important ecosystem and its rich biodiversity. In addition, the company maintains in Uruguay 30 specific conservation areas which are managed under plans designed to protect their unique ecosystems or species. The conservation strategies used in UPM’s biodiversity programme in Uruguay are:
UPM safeguards biodiversity globally in its own forests and plantations through the implementation of its biodiversity programme. This was established in 1998 with environmental guidelines concerning operational activities, forest conservation and collaboration projects with stakeholders. Read more about the programme.
The biodiversity programme is implemented also in UPM’s plantation operations in Uruguay, where valuable habitats around the plantation stands are protected, and other unplanted areas are maintained under the traditional land use - cattle grazing - and at the same time also acting as corridors for native fauna.
There are several ecosystems especially important for biodiversity conservation that are included in the programme:
The maintenance of unplanted areas applies to one third of the gross area of UPM land holdings. These areas are kept under traditional grazing use with regular control of grazing intensity and fire prevention. Those areas with more sensitive or scarce habitats, or other areas with clearly identified species of the natural flora or fauna to be preserved or enhanced, are given a special conservation status by the company and are preserved according to specific management plans.
All non-planted areas are mapped in the company’s GIS geodatabase, with a classification of the vegetation or ecosystem type. The most important conservation areas have been monitored for almost 30 years. Results show that the number of endangered species have remained stable, increased, or have a fluctuating behaviour.
Biodiversity has an instrumental role in maintaining healthy forest growth and therefore ensuring the vitality of our business.
We safeguard biodiversity by several means in our everyday actions: protecting habitats that are critical to biodiversity, ensuring diverse tree species composition and structural variation in the Finnish boreal forests, leaving buffer zones around water systems, increasing deadwood, and protecting threatened species.
We are also actively developing new ways to enhance forest biodiversity. As a recent example we have started testing transplanting threatened wood-inhabiting fungi into our Finnish forests.
To make sure our actions are working, we monitor the status of forest nature by using selected biodiversity indicators: tree species, forest age, forest structure, protected areas, valuable habitats, habitat restoration, species and habitat projects, and indicator development.
We also protect biodiversity on our lands in Uruguay – all valuable biodiversity hotspots and native species are protected. The Chasico conservation area and UPM Biofore Station Palmares del Cuico in western Uruguay are both great examples of how responsibly managed plantations can co-exist in harmony with local ecosystems and communities.
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