Products and partnerships with the value chain and circularity

KODS 2030
 

10 benchmarking cases of circular economy in partnership with stakeholders 

1. In the Industrial Bags business, the Ecomix Bag for cement and mortar was developed in partnership with a client in the civil construction sector. The product is made up of 100% dispersible paper that is integrated into the concrete preparation process, thus eliminating the generation of packaging waste. The Ecomix Bag continues to expand Klabin's portfolio, serving both the domestic and foreign markets, due to the environmental benefits offered, meeting the demand for a low-carbon circular economy. In three years of the project, more than 3 million units have been sold, which represents over 400 tons diverted from landfills.
2. Another project in partnership with a client involves the recycling of Long-Life Packaging (ELV), aimed at increasing the installed recycling capacity of this material within the national territory. The recycled fiber, which is of high quality for manufacturing recycled packaging, is used in the production of recycled paper. The polyaluminum (polyethylene and aluminum) supplies manufacturers producing products from this material. In 2023, this project facilitated the recycling of over 7,000 tons of post-consumer waste.
3. Another packaging recycling initiative is in partnership with another client in the construction sector. Pre- and post-consumer trimmings generated in the client's operation are collected and returned to the Goiana Unit (PE) for the production of new packaging, which then returns to this or other clients. The project enabled the reverse logistics of 1,400 tons of trimmings.

Percentage of products covered by Life Cycle Assessments (LCAs)

Currently, 100% of the company's pulp and paper products undergo Life Cycle Assessment studies. These studies are conducted based on the Product Life Cycle Accounting and Reporting Standard developed by the GHG Protocol, employing a cradle-to-gate approach.

This Standard builds upon the framework and requirements established by ISO 14040:2006 (Environmental Management - Life Cycle Assessment: Principles and Framework) and 14044:2006 (Environmental Management - Life Cycle Assessment: Requirements and Guidelines), as well as PAS 2050. Its purpose is to provide specifications and additional guidance to facilitate consistent quantification and disclosure of the life cycle impacts of our products.

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Reducing the environmental impact of packaging throughout its life cycle
 

In addition to investments in specific emissions reduction and the pursuit of an increasingly renewable energy matrix, products are custom-developed to meet Klabin's customers' needs with high technology, combining virgin and recycled fibers to promote the rational use of natural resources.

Benefits of resource efficiency in the use of products for your customers and consumers

The more efficient use of natural resources remains a priority in Klabin's operations, as it advances towards an increasingly renewable energy matrix.

In 2023, the Company's energy matrix reached 92.3% from renewable sources, contributing to reducing the CO2 footprint of its manufactured products.

Regarding water use, Klabin achieved a significant 49% reduction in water consumption per ton of product produced, considering the base year of 2004. Despite this achievement, the Company continues to implement actions to further reduce its water usage.
In 2023, Klabin continued its actions within the Water Management Task Force, which has also significantly contributed to the results. The GT's objective is to identify opportunities to reduce water intake and consumption across all Klabin's industrial units. The group comprises a multidisciplinary team, including representatives from the Pulp, Papers, Recycled and Packaging businesses, as well as from the Research and Development, Innovation, and Sustainability sectors of the Company.

Similar efforts are observed in the amount of CO2 equivalent emitted per ton of product, based on the GHG Protocol methodology: Klabin has already achieved a 69% reduction in its specific emissions (scopes 1 and 2) between 2003 and 2023 (in 2023, emissions totaled approximately 142kg of CO2eq per ton of manufactured product).
 

Product Benefits

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Percentage of renewable raw materials consumed

Wood represents 95% of the main raw materials used in Klabin's production process.

 All of the final products (paper and pulp) have FSC® - Forest Stewardship Council® (FSC-C022516) and Cerflor certifications (recognized by PEFC). This means that the raw materials used in the Company's processes undergo rigorous verification of compliance with forest management and chain-of-custody certification standards to ensure the reliability of our supply chain.
The Company has four recycled paper production units: three located in the southeast and one located in the northeast of Brazil. In 2023, recycled fiber accounted for about 21% of the total weight of corrugated boards and packaging produced. In addition to chips from other plants, Klabin maintains partnerships with wholesale stores of recyclable materials that supply post-consumer trimmings.
Klabin is FSC® Chain of Custody certified in the aforementioned recycled paper plants. One hundred percent of its products use wood or paper fiber as raw material.

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Materials used, broken down by weight and volume

In 2023, there was an increase in the number of materials from renewable sources used in the Company. This occurred mainly due to the start-up of PM28, which required more wood for the process. Chips purchased from third parties recorded lower data than in 2022, due to the reduction in packaging demand in the period and excess inventories in the domestic and global market that have formed since the pandemic. The scenario of lower production of certain products in some units was reflected in the reduction in the use of purchased pulp.
About non-renewable materials, there was an overall reduction of 9%. The main factors that influenced this result are related to the temporary reduction in the operation of paper machines in some units. The start-up of PM28 at the Puma Unit, on the other hand, boosted the consumption of kaolin, a product that was not consumed before. The largest reduction recorded was in aluminum sulfate (18%), due to the lower water withdrawal in the period and the stoppage of PM1. Sulfuric acid also dropped by more than 10%. Among the reasons for this reduction are the higher in-house production of acid and variations in production.

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Percentage of recycled fiber used

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Revenue from products that are reusable, recyclable or biodegradable

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Percentage of recycled materials or from sustainable sources

Note: There was an adjustment to the historical amount of wood used in the manufacturing process in the year 2020, prompted by an internal review by the accounting department.

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Collection of recovered product and packaging data

The percentage of recycled or certified material in 2022 was 8% lower compared to 2021. This fact can be attributed to the Company's expansions, which led to an increase in the consumption of third-party wood. Additionally, strategies have been developed to optimize the forest assets and encourage producers in the region, ensuring a steady supply of certified products to the factories. Currently, Klabin encourages and assists these suppliers in obtaining certification to reduce the number of controlled areas and to continually improve processes. As for the percentage of participation in the products sold in 2022, the production remained stable compared to the previous year.

Percentage of recovered products and packaging for each product category

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Total aluminum purchased

The Company does not purchase aluminum for its processes.

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Recall

There was no recall operation, that is, no Klabin product presented safety risks or non-compliance with current regulations.

Klabin's customers are one of the stakeholder groups that have been driving and challenging the company towards a low-carbon economy. This is reinforced by Klabin's Stakeholder Engagement Policy, which mandates that the company seeks to meet its customers' needs, considering their increasing demands for innovation and sustainability in their products. The theme of Customers and Products is increasingly linked to innovation and sustainability and is considered one of Klabin's Objectives for Sustainable Development (KODS).

Klabin conducts annual satisfaction or perception surveys specific to each of its businesses to identify strengths and opportunities for improvement in products, processes, and operations. Quality, safety, qualification, technical support, and sustainability indicators (including life cycle analysis) are integrated into these surveys. Notably, the annual Cellulose survey, answered by business customers representing approximately 43% of sales volume and 32% of revenue in 2023, resulted in an excellent score of 4.4 out of 5 points (exceeding the target of achieving above 4 points). This survey is conducted annually and has shown the same result for the last three years. 

100% of our products are free from hazardous materials for the environment and human health in their composition. Furthermore, none of our raw materials include minerals and/or other chemicals from high conflict areas accordingly with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Klabin is the first Brazilian company in the pulp and paper sector to achieve the Belgian OK Compost certification for its cement bags, ensuring that the paper decomposes completely within 12 weeks without environmental contamination risks. Additionally, our packaging is printed with water-based ink and structured with eco-friendly glue that does not contaminate the soil, resulting in a highly biodegradable product reincorporated into the ecosystem within a few months.

Moreover, it's worth mentioning that Klabin's food packaging is certified by ISEGA, AIB, and FSSC 22000, some of the most advanced standards used to ensure the origin of paper for food packaging. These certifications specify prerequisites for producing packaging that guarantees the health of the end consumer, setting standards such as cleanliness and organization of the production area, as well as necessary controls for water, air, and pests in such production.

Circularity at Klabin

To develop a business model aimed at addressing the challenges of the linear economy, Klabin has developed a comprehensive approach that aims to promote a Circular Economy broadly. This approach considers how it operates its manufacturing units, how it develops more circular products and materials, the treatment employed for products after their use, and the promotion of circularity in partnership with the value chain.

Klabin's commitment to the circular economy is based on the principles of the Ellen MacArthur Foundation, aiming to eliminate pollution and waste, promote the circularity of products and materials, and regenerate systems.

The year 2023 marked a milestone in the company's evolution on this theme, as Klabin established a specific framework dedicated to it and developed several initiatives. One of these initiatives was the update of the company's public commitment to circularity. Klabin understands that promoting circularity extends beyond its relationship with customers; it is crucial to consider opportunities and foster more circular practices throughout the value chain.

In that year, Klabin also optimized the management process for the circular economy theme, encompassing the following stages:

• Definition of criteria and subdivision into specific classifications for their classification according to the project's objective.
The project evaluation criteria positively consider those that propose to: Eliminate the disposal of 

1. Eliminate the disposal of industrial waste in landfills;
2. Promote materials and products made from by-products of Klabin's industrial operations;
3.  Replace materials of fossil origin in products and processes;
4. Support the structuring of the recycling chain,
5. Promote recycled, recyclable, and/or reusable materials,
6. Promote innovation for the development of products that enable and foster circularity,
7. Promote the Circular Economy in the paper and pulp value chain or other chains.

The classifications of projects submitted to the criteria are:
• Circular industrial operations,
• Innovation and circular products,
• Circularity with customers,
• Engagement with stakeholders.

• Development of a central and systematic database for tracking Circular Economy projects carried out within the Company.
• Establishment of a Circular Economy Working Group.

The group consists of 17 members from 12 different areas of the Company. It is led by the Sustainability department and aims to drive collaboration across various departments on the topic, monitor project indicators, address topics that pose risks to Klabin and its clients, and develop opportunities identified in the Circular Economy agenda.

Klabin's promotion of circular industrial operations encompasses the use of technology and innovation to ensure that by-products are reused, recycled, reincorporated, or repurposed within the production process. Some examples of circular industrial operations are exemplified in the following cases:

• Drying of Sludge (Puma Unit): Responsible for drying biological and tertiary sludges generated at the Effluent Treatment Stations of the Monte Alegre and Ortigueira factories, with a drying capacity of up to 17,000 tons per month. The dried sludge can be used for energy recovery, acting as renewable fuel in biomass boilers.
• SOP Plant (Puma Unit): Potassium is a key ingredient in fertilizer formulations. The SOP plant allows for the production of potassium sulfate from the treatment of ashes generated in the recovery boiler. The production potential is 22 tons of potassium sulfate per day.
• Sulfuric Acid Plant (Puma Unit): The first plant of its kind in the Americas installed at a pulp and paper mill. It will produce 150 tons of concentrated acid per day and enable the unit to be self-sufficient in this input. The acid is produced by harnessing sulfur-containing waste gases from the wood cooking process using renewable energy from biomass combustion and black liquor.
• Waste Center (Puma Unit and Monte Alegre Unit): Industrial waste such as sludge, ashes, dregs, and wood bark are directed to the Waste Center for the production of agricultural inputs (ecosoil). Part of this product is donated to food producers participating in Klabin's Social Forests program. Some of the foods produced are purchased by Klabin for consumption in the operational unit restaurants and for feeding animals at the Klabin Ecological Park (PEK).

The Research and Development department has research lines focused on solutions using renewable materials as alternatives to replace non-renewable products. Some examples of more circular products and materials are exemplified in the following cases:

• Ecomix Bag: an innovative product that enables the elimination of cement bag waste generation. The Ecomix Bag addresses a significant challenge in managing, sorting, and recycling cement bags, while also providing packaging with a negative carbon footprint (carbon capture).
• Delivery Packaging: In 2023, iFood launched new paper-based packaging to replace other materials. These packages were produced by Klabin, aiming to support iFood's strategy of eliminating plastic from food transported through the delivery app.
• Bag in Box: Klabin developed a paper packaging solution for paints. This innovative solution enabled the reduction of consumption of non-renewable resources.