Neste Oyj

…1(4) October 2020 ___________________________________________________________________________________________________ ___________________________________________________________________________________________________ Neste Corporation neste.com Transparency register number 10257354120-19 Business ID FI1852302-9 Domicile Espoo, Finland Towards a holistic circular economy Key messages ● A successful transition to a circular economy is key to reaching the EU’s GHG reduction target to 55% by 2030 and achieving the European Green Deal’s climate neutrality target by 2050. ● In a holistic approach to the circular economy, all carbon is circulated, thus reducing the use of carbon from virgin fossil resources.

…to the circular economy, all carbon is circulated, thus reducing the use of carbon from virgin fossil resources. ● Chemical recycling can close the loop for plastics by utilizing mixed waste plastic streams that have no or low value in mechanical recycling, therefore acting as a complementary and necessary solution. ● Renewable plastics and chemicals produced from waste and sustainable biomass residue sources reduce the use of virgin fossil raw materials and the carbon footprint of plastic products. ● Drop-in renewable plastics have the same functionality and chemical structure as conventional alternatives, thus are compatible with mechanical recycling infrastructure and suitable for reuse. Content Holistic approach to the circular economy 1 Chemical recycling, next step to solve the plastic problem 2 Renewable bio-based plastics replacing virgin material needs 3 What can the EU do?

…step to solve the plastic problem 2 Renewable bio-based plastics replacing virgin material needs 3 What can the EU do? 4 Holistic approach to the circular economy Climate change is the most pressing challenge of this generation. The European Green Deal aims to set the goal to increase the EU’s greenhouse gas (GHG) reduction target to at least 55% by 2030, and achieve climate neutrality by 2050. A successful transition to a fully circular economy through the implementation of the new Circular Economy Action Plan and the EU Bioeconomy Strategy will be essential to achieving this target. In a holistic approach to the circular economy, carbon is circulated to combat climate change, enable resource efficiency, reduce dependency on fossil resources and tackle the growing plastic waste challenge by improving plastics’ recycling options.

…dependency on fossil resources and tackle the growing plastic waste challenge by improving plastics’ recycling options. Circular economy can be achieved by maximizing material recycling and meeting the necessary additional virgin material needs by using sustainable biomass resources. Ref.

…recycling and meeting the necessary additional virgin material needs by using sustainable biomass resources. Ref. Ares(2021)145445 - 07/01/2021 2(4) October 2020 ___________________________________________________________________________________________________ ___________________________________________________________________________________________________ Neste Corporation neste.com Transparency register number 10257354120-19 Business ID FI1852302-9 Domicile Espoo, Finland Following this holistic approach, Neste: ● invests in chemical recycling technologies to liquefy waste plastic, which helps increase recycling rates, ● processes today a wide range of low-quality bio-based waste and residues to sustainable feedstocks for valuable renewable plastics and chemicals production, ● is engaged in research, development and innovation activities and fully committed1 to be a global leader…

…by 2035, and enable its customers to reduce GHG emissions by at least 20 million tons CO2eq annually by 2030. Chemical recycling, next step to solve the plastic problem The European Union set a target for recycling 50% of plastic packaging waste by 2025 and 55% by 2030, and reached an estimated 42% recycling in 2017.2 Moreover, brand owners from different industries have pledged to improve plastics usage and recycling through increasing the amount of recycled content in their materials. Facilitating these commitments, the EU’s Circular Plastics Alliance aims to boost the EU market for recycled plastics to 10 million tons by 2025.3 However, as per the findings of McKinsey in 2020,4 most European recyclers use industrial plastic waste as input material, and the recycling of municipal solid waste (the largest stream of plastic waste) is not yet working well.

…and the recycling of municipal solid waste (the largest stream of plastic waste) is not yet working well. This is the case due to its lower quality and higher contamination compared to industrial plastic waste, as well as the existing alternative waste treatment routes with less complexity, such as waste-to-energy or incineration. Chemical recycling technologies can address this challenge and close the loop for a diverse mix of plastics, including plastics derived from municipal waste, circulating carbon again and again without lowering the quality of the circulated materials. These technologies provide a necessary solution that complements mechanical recycling by utilizing low-quality waste plastic streams that cannot be mechanically processed and processing such plastics into feedstock for the production of virgin-like quality plastics, for example.

…processed and processing such plastics into feedstock for the production of virgin-like quality plastics, for example. This accelerates the circular economy, by increasing recycling rates and the use of recycled plastics in products without affecting quality, functionality or recyclability. This is a much needed solution to get the EU to where it wants to be in just 5 to 10 years’ time, since, as recently stated by the European Court of Auditors5, there is a significant risk that the EU will not meet its recycling targets for 2025 and 2030 unless decisive concerted action is taken. The chemical recycling process enables production of materials that are recyclable and identical to materials based on virgin fossil feedstock.

…enables production of materials that are recyclable and identical to materials based on virgin fossil feedstock. This means that recycled materials cannot be separately identified or kept physically separated from virgin fossil based materials in situations where both types of material go into the end-product during manufacturing process. Mass balance is an accounting system used to track feedstocks as they flow through complex value chains. It enables the certification of recycled content in chemically recycled products and increases accuracy, transparency and trust within the value chain. The Mass Balance approach is a necessary chain of custody tool to implement chemical recycling into the plastics and chemical value chains and it also addresses the challenge of scaling up the production and market uptake of renewable plastics and chemicals.

…and it also addresses the challenge of scaling up the production and market uptake of renewable plastics and chemicals. 1 41.5% of new Neste employees say that its sustainability focus is one of the key reasons for joining the company (Neste Annual Report 2019).

…say that its sustainability focus is one of the key reasons for joining the company (Neste Annual Report 2019). 2 Eurostat 2017 3 Circular Plastics Alliance 4 McKinsey 2020 5 EU action to tackle the issue of plastic waste, European Court of Auditors, Luxembourg, 6 October 2020 3(4) October 2020 ___________________________________________________________________________________________________ ___________________________________________________________________________________________________ Neste Corporation neste.com Transparency register number 10257354120-19 Business ID FI1852302-9 Domicile Espoo, Finland Neste is committed to becoming a solution provider in chemical recycling and aims to provide cost-effective and sustainable innovations to ensure the successful transition to a European circular economy.

…provide cost-effective and sustainable innovations to ensure the successful transition to a European circular economy. In particular, Neste has pledged to work towards chemically recycling more than 1 million tons of plastic waste annually from 2030 onwards. Renewable bio-based plastics replacing virgin material needs Available solutions, such as drop-in bio-based plastics, can also play a role in helping the EU meet its ambitious targets, being inherently recyclable and reducing the use of virgin fossil raw materials. Drop-in bio-based plastics (not to be confused with biodegradable) have identical chemical structure and technical properties as their fossil counterparts. Therefore, producers and brand owners can select such polymers and replace traditional fossil-based polymers without any changes to their production lines and with equal functionalities, including end-of-life recycling.

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Neste feedback on the Review of the requirements for packaging and other measures to prevent packaging waste 05/01/2021 Neste supports the Commission’s intention as part of the European Green Deal to review the requirements on packaging and packaging waste in the EU, including the aim to improve packaging design to promote reuse and recycling; to increase recycled content and sustainably produced and recyclable bio-based content in plastics as a way to reduce the use of virgin fossil-based plastics and related greenhouse gas emissions; and to reduce packaging waste. It is essential to improve packaging design to increase recyclability and to take maximum advantage of recycled content in new packaging. Additionally, the necessary additional virgin material needs should be met by using sustainable renewable biomass resources.

…the necessary additional virgin material needs should be met by using sustainable renewable biomass resources. Moving away from fossil resources towards sustainable bio-based and secondary resources is key for achieving a circular economy. Concrete solutions such as drop-in bio-based plastics for packaging can help the EU meet its ambitious climate and circularity targets as they present identical technical properties to their fossil counterparts, therefore producers and brand owners can select such polymers and replace traditional plastics without any changes to their production lines. The PPWD review should also include chemical recycling as a sustainable solution complementing mechanical recycling. Chemical recycling enables utilization of waste plastics that would otherwise end up in incineration, landfills or be exported due to having no or low value in mechanical recycling.

…would otherwise end up in incineration, landfills or be exported due to having no or low value in mechanical recycling. Chemical recycling also enables efficient recycling of colored, multi-layer, multi-material packaging and films back into high-quality raw material for new plastic.This accelerates the circular economy by helping Member States reach recycling targets in a cost-effective way and enabling an increase in the incorporation of secondary materials from recycled plastics in plastic packaging. Both, bio-based and chemically recycled feedstock, can be used to produce high-quality, high-performance materials meeting safety and quality requirements even for food-grade packaging materials.

…materials meeting safety and quality requirements even for food-grade packaging materials. Purification and physical-chemical transformation processes involved in the processing of the biogenic and chemically recycled materials ensure that such material can be used without any limitations e.g. in sensitive packaging in the food and healthcare industries. We strongly support increasing the use of both bio-based and recycled, including chemically recycled, content in packaging as a win-win-solution for a circular economy: turning waste into a feedstock and limiting the use of fossil sources. Policy asks: - Neste welcomes the inclusion of sustainable bio-based content to be promoted in the PPWD to help the industry meet the ambitious climate targets and reduce the use of virgin fossil material.

…in the PPWD to help the industry meet the ambitious climate targets and reduce the use of virgin fossil material. - Neste welcomes the inclusion of recycled content from chemical recycling to be included in the PPWD, in addition to mechanical recycling, as an alternative circular feedstock replacing the virgin fossil material needed while promoting circularity of materials. - Neste supports the inclusion of mass balance approach when calculating the renewable / bio / recycled content of materials. 1 Ref. Ares(2021)145445 - 07/01/2021 About Neste Neste creates solutions for combating climate change and accelerating a shift to a circular economy. We refine waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials.

…residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. We are the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. We aim at helping customers to reduce greenhouse gas emissions with our renewable and circular solutions by at least 20 million tons annually by 2030. As a technologically advanced refiner of high-quality oil products with a commitment to reach carbon-neutral production by 2035, we are also introducing renewable and recycled raw materials such as waste plastic as refinery raw materials. We have consistently been included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies.

…included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies. In 2019, Neste's revenue stood at EUR 15.8 billion, with 82% of the company’s comparable operating profit coming from renewable products. Neste is a forerunner in developing renewable and circular solutions for the polymers and chemical sectors. Together with one of our production company partners, we enabled the world’s first commercial-scale production of bio-based polypropylene (PP) and bio-based polyethylene (PE) already in 2019 (​https://www.neste.com/releases-and-news/neste-and-lyondellbasell-announce-commercial- scale-production-bio-based-plastic-renewable-materials)​. Production of bio-based and renewable polymers and chemicals from Neste’s renewable feedstock has continued ever since.

Production of bio-based and renewable polymers and chemicals from Neste’s renewable feedstock has continued ever since. During fall 2020, we successfully conducted an industrial scale processing run with liquefied waste plastics at our refinery in Finland. We processed 400 tons of liquefied plastic waste, an amount corresponding to the annual amount of plastic waste generated by 20,000 average European citizens (calculations based on figures by Eurostat) and upgraded packaging and mixed waste plastics into high-quality recycled feedstock for petrochemical industry uses, e.g. for the production of new plastics (​https://www.neste.com/releases-and-news/plastics/neste-successfully-completed-its-first-in dustrial-scale-processing-run-liquefied-waste-plastic). Neste’s target is to process over 1 million tons of waste plastic annually from 2030 onwards.

Neste’s target is to process over 1 million tons of waste plastic annually from 2030 onwards. In November 2020, we launched Neste RE, a 100% renewable and recycled raw material that helps replace virgin fossil feedstock in the production of plastics and chemicals for a wide range of applications from toys to healthcare.

…fossil feedstock in the production of plastics and chemicals for a wide range of applications from toys to healthcare. It is a product for tackling climate change through reducing the need to use virgin fossil resources, while it also provides a new solution to the end-of-life related challenges the polymers and chemicals industries are facing today (​https://www.neste.com/releases-and-news/plastics/neste-re-enables-future-where-all-plastic -products-can-be-made-renewable-and-recycled-materials-and​) 2 On January, 4th 2021, we announced the acquisition of a minority stake in Alterra Energy and our partnership to commercialize Alterra’s waste plastic liquefaction technology in Europe and contribute to accelerating the transition to a circular plastics economy. The global waste plastic challenge calls for innovation, commitment and partnerships.

…to a circular plastics economy. The global waste plastic challenge calls for innovation, commitment and partnerships. ​This partnership supports that journey and Neste’s aim of building new business growth based on chemical recycling, while marking another significant step towards our target of processing more than one million tons of plastic waste from 2030 onwards​. (​https://www.neste.com/releases-and-news/circular-economy/neste-acquires-minority-stake- alterra-energy-companies-partnering-commercialize-alterras-waste​) Read more: ​neste.com​ and ​www.neste.com/companies/products/plastics 3

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…1(2) ___________________________________________________________________________________________________ ___________________________________________________________________________________________________ Neste Corporation neste.com Transparency register number 10257354120-19 Business ID FI1852302-9 Domicile Espoo, Finland Neste comments on the Review of the requirements for packaging and other measures to prevent packaging waste Neste Corp. (www.neste.com) is the world’s largest producer of renewable diesel refined from waste and residues, introducing renewable solutions also to the polymers and chemicals industries. Our business is focused on combating climate change and driving circular economy, and we are committed to becoming a solution provider in chemical recycling by providing cost-effective and sustainable innovations.

…becoming a solution provider in chemical recycling by providing cost-effective and sustainable innovations. Neste has pledged to work towards chemically recycling more than 1 million tons of plastic waste annually from 2030 onwards. Neste is also a founding member of the European Plastics Pact, where we are working towards four goals aimed at design, responsible use, recycling capacity and the use of recycled content. We support the development of an EU legislative framework that enables and accelerates circular value chains. Therefore Neste also supports the Commission’s intention as part of the European Green Deal to review the requirements on packaging and packaging waste in the EU, including the aim to improve packaging design to promote reuse and recycling; to increase recycled content in packaging; and to reduce packaging waste. I.

…design to promote reuse and recycling; to increase recycled content in packaging; and to reduce packaging waste. I. Improving packaging design to promote reuse and recycling The review of the Packaging and Packaging Waste Directive provides an opportunity to keep carbon circulating to combat climate change, reduce dependency on fossil resources and tackle the growing plastic waste challenge, in line with a holistic approach to the circular economy. This can be achieved by maximising recycling and meeting the necessary additional virgin material needs by using sustainable biomass resources.

…maximising recycling and meeting the necessary additional virgin material needs by using sustainable biomass resources. Following this approach, Neste (1) invests in chemical recycling technologies to liquefy waste plastic, which can raise recycling rates and increase levels of recycled content in packaging, and (2) processes a wide range of waste and residues for bio-based plastics production which replaces the need for virgin feedstock.

…wide range of waste and residues for bio-based plastics production which replaces the need for virgin feedstock. 1. Chemical recycling is a rapidly developing family of technologies for closing the loop for plastics. It is a sustainable solution that complements mechanical recycling by utilising waste plastic streams such as contaminated or multi-layer plastic packaging, i.e. plastics that have no or low value in mechanical recycling. This accelerates circular economy by: a. helping Member States reach recycling targets in a cost-effective way; b. enabling the incorporation of secondary materials from recycled plastics in plastic packaging. Ref. Ares(2020)4135839 - 06/08/2020 2(2) ___________________________________________________________________________________________________ ___________________________________________________________________________________________________ Neste…

Corporation neste.com Transparency register number 10257354120-19 Business ID FI1852302-9 Domicile Espoo, Finland 2. Concrete solutions such as drop-in bio-based plastics for packaging can help the EU meet its ambitious targets, being inherently recyclable and reducing the use of virgin fossil raw materials. Drop-in bio-based plastics are based on biomass, and present identical technical properties to their fossil counterparts, therefore producers and brand owners can select such polymers and replace traditional plastics without any changes to their production lines. Neste produces cost- effective, scalable and sustainable bio-based drop-in plastics, which can be reusable and be recycled in existing recycling infrastructure. II. Increasing recycled content in packaging

…can be reusable and be recycled in existing recycling infrastructure. II. Increasing recycled content in packaging 1. Neste invests in chemical recycling technologies using our refinery know-how to liquefy waste plastic and replace crude-oil based feedstocks. Chemically recycled feedstock can help incorporate high quality recycled content in plastic materials, critical to creating food grade packaging materials. As such this raw material can be used without any limitations e.g. sensitive packaging in the food and medical industry. We are strongly supporting the increasing use of recycled, including chemically recycled, content in packaging as a win-win-solution for a circular economy: turning waste into a feedstock and limiting the use of fossil sources.

…as a win-win-solution for a circular economy: turning waste into a feedstock and limiting the use of fossil sources. 2. To contribute to the overarching goals of the EU Green Deal and achieve climate neutrality by 2050, increasing recycled content in packaging should be achieved in a holistic way. Any additional virgin material needs could be met by using sustainable resources such as drop-in bio-based content based on a wide range of waste and residues, thus reducing carbon emissions and contributing at the same time to resource efficiency. Contact information Francisca Melia Acting Head of Public Affairs Renewable Polymers and Chemicals [email protected] Tel. +32 494 27 60 85 Neste Corp. (Nasdaq, Helsinki) is the world’s largest producer of renewable diesel refined from waste and residues, introducing renewable solutions also to the aviation and plastics industries. Our…

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…1(1) ___________________________________________________________________________________________________ MAKE SUSTAINABLE PLASTICS THE NORM IN THE EU’S PACKAGING REGULATION The Packaging and Packaging Waste Regulation (PPWR) is an opportunity to make a major leap towards more sustainable production and consumption of plastics in the EU’s circular economy. Tackling sustainability of plastic packaging is critical as it is the single biggest use of plastics in the EU representing 40% of the market. As 87.6% of EU plastics production is based on virgin fossil raw materials, the PPWR should start the transition to non-fossil plastics to support the EU’s climate targets, create green jobs and reduce the reliance on imports of fossil raw materials.

…to support the EU’s climate targets, create green jobs and reduce the reliance on imports of fossil raw materials. To seize this opportunity, Neste strongly supports ambitious recycled content targets and the addition of new non-fossil targets for virgin plastics in the PPWR. - NON-FOSSIL VIRGIN FEEDSTOCKS ARE NEEDED FOR A CLIMATE NEUTRAL PLASTICS ECONOMY The GHG emissions from plastics are set to more than double by 2060 and the use of oil as a feedstock for plastics production is likely to grow by 2050, even with major increases in recycling. To reach a climate neutral plastics economy and decouple plastics packaging from the use of virgin fossil resources, reports from the Ellen MacArthur Foundation, the Minderoo Foundation and the Plastics Industry show that non-fossil/renewable raw materials for plastics is needed in addition to reduction, reuse and recycling of plastics.

…non-fossil/renewable raw materials for plastics is needed in addition to reduction, reuse and recycling of plastics. The use of a virgin input to plastics will remain necessary because of the loss of material from reuse and recycling loops. Non-fossil virgin inputs for plastics include CO2-based and renewable biobased feedstocks. If just 10% of EU plastics switch from fossil to non-fossil biobased feedstocks, a study for the Commission shows that it would result in annual reductions of 4.4 Mtoe of fossil feedstocks and emission reductions of 6.2 Mt of CO2-eq. This is a conservative estimate with only 30% GHG emission savings compared to fossil plastics. The evidence calls for the promotion of non-fossil virgin feedstocks as a complementary step to the proposed circularity measures to meet the EU’s Green Deal and strategic autonomy objectives.

…complementary step to the proposed circularity measures to meet the EU’s Green Deal and strategic autonomy objectives. - INTRODUCE NON-FOSSIL TARGETS FOR VIRGIN PLASTIC PACKAGING FEEDSTOCKS IN THE PPWR The impact assessment (IA) discarded an option of allowing the recycled content targets to be met by incorporating biobased plastic (measure w). The IA still highlighted biobased plastics as an ‘important way of reducing reliance on fossil fuels and therefore reducing GHG emissions’. The option appears to be discarded due uncertainties about sustainability criteria and environmental equivalence. Other options for promoting non-fossil plastics packaging do appear to be considered in the IA. Additional options that could be considered in the legislative process include: 1. introduce (a) non-fossil feedstock target(s) for virgin plastic packaging feedstocks;

…legislative process include: 1. introduce (a) non-fossil feedstock target(s) for virgin plastic packaging feedstocks; 2. allow a partial contribution from non-fossil feedstocks to recycled content targets, if there is a shortfall of recycled plastics content. These options work alongside the recycled content targets, ensure flexibility and maximise the shift away from virgin fossil resources. The targets could be included in the legal text or be introduced in secondary legislation after further impact assessment. Targets for virgin non-fossil feedstock should include sustainability criteria and plastics based on non-fossil feedstocks should be equally recyclable under the PPWR requirements. The sustainability requirements for biobased feedstocks should build on the recommendations of the EU framework for biobased plastics to further develop existing EU criteria for biomass to fit…

…21 Espoo Telephone/Fax +358 10 458 11 Business ID Domicile FI1852302-9 Espoo Ref. Ares(2023)2654507 - 14/04/2023

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