The Norwegian Environment Agency has issued a decision to exclude Norske SkogSkogn and Norske Skog Saugbrugs from the EU Emissions Trading System (EU ETS)for the period 2026 to 2030. The decision is based on a revised qualificationcriterion, which states that facilities exceeding 95% of emissions derivingfromsustainable biomass no longer will qualify for free CO2 allowances. Thisrulinghas significant economic and competitive consequences for Norske Skog, whichhasinvested substantial resources over several decades to become a leader in lowfossil CO2 emissions from the mills.

Norske Skog CEO Geir Drangsland expresses deep disappointment over thedecision:

“This is a major setback for sustainable industry and a clear signal thatprioritizing renewable energy and sustainable solutions does not pay off.NorskeSkog has heavily invested in energy efficiency and CO2 reduction, implementingmultiple measures to minimize our fossil carbon footprint. This decisionpenalizes those who have worked to reduce greenhouse gas emissions and insteadincentivizes increased use of fossil fuels. This will slow down the greentransition.”

The basis for the exclusion is the implementation of a revised qualificationcriterion in the EU ETS scheme for the 2026-2030 period. The criterionexcludesfacilities where more than 95% of greenhouse gas (GHG) emissions, on average,during the qualification period from 2019 to 2023, come from sustainablebiomass-as defined by the Renewable Energy Directive (RED II)-instead offossilfuels. As a result, facilities that have successfully reduced their fossilcarbon footprint will no longer have incentives to be sustainability leaderswithin their industry. Facilities excluded from the EU ETS scheme will not berequired to submit emissions allowances (EUAs) for their greenhouse gasemissions.

“We have always been committed to climate responsibility and have madesignificant investments to reduce our carbon footprint. Now, we are beingpenalized for prioritizing sustainable solutions. We also believe that ouremissions during the qualification period do not exceed the threshold foremissions from sustainable biomass, as defined by the regulations, and thatouroperations should therefore remain included in the EU ETS system. For thisreason, we will appeal the decision to the Ministry of Climate andEnvironment,as it is crucial for the competitiveness of our businesses and the future ofgreen industry in Norway,” says Drangsland.

If the decision to exclude Norske Skog Skogn and Norske Skog Saugbrugs stands,these mills will neither be allocated free allowances (EUAs) nor be requiredtosubmit emissions allowances (EUAs) to cover their greenhouse gas emissionsfromJanuary 1, 2026, to December 31, 2030. Norske Skog’s Norwegian mills-NorskeSkogSaugbrugs and Norske Skog Skogn-will collectively lose approximately NOK 120million per year, or NOK 600 million in total over the entire period, as aresult of the Norwegian Environment Agency’s decision.

For further information:Norske Skog media:Vice President Corporate Communication and Public AffairsCarsten Dybevigcarsten.dybevig@norskeskog.comMob: +47 917 63 117

Norske Skog Investor Relations:Senior Vice President Corporate FinanceEven Lundeven.lund@norskeskog.comMob: +47 906 12 919

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