Sustainable Forest IndustriesOpening Pathways to Low-Carbon Economy

ACPWP-52 MontebelloJukka Tissari

FAO Forestry Department23 May 2011

Opening Messages

1. Forest industry is in the core of low-carbon economy

2. There is room for improvement within the three pillars of sustainability

3. There are much greater new pathways in de-carbonazing the economies

4. Innovation and partnerships are imperative

Forest industry is in the core of low-carbon economy

An intelligent extension to the nature’s production process and carbon cycle

Paper-making process

Liquid bio-fuels

Generation of electricity & heat

Chemical refining

Electricity grid

Transport fuel markets

District heating

Chemical markets

Recovered paper

Industrial roundwood & chips

Stumps, residues, bark, sawdust & recycled wood, processing waste

Pulp-making process

Pulp markets

Paper markets

Raw material flows

Electricity flows

PPuullpp aanndd ppaappeerr fflloowwss

Heat flows

Black liquor flows

Gas, liquid effluents and intermediary chemical flows

Water

Liquid bio-fuels and green chemicals

Water/wastewater flows

Wastewater treatment

Three Pillars of Sustainability in Forest Industries

1. Economic:• Issues: sound use of resources, innovation vs. market saturation,

overcapacity vs. competitiveness shifts, emerging countries’ development stages, cost of compliance (carbon, legality, certification)

2. Environmental:• Issues: certification, LCA, product & company carbon footprints,

energy savings and efficiency gains, lowered emissions to water and air, compatibility with energy and climate change policies

3. Social:• Issues: legality, employment, collaborative forestry, community

engagement, education, lifestyles

Responses of Forest Industries to Economic Sustainability

Issues:• sound use of

resources

• innovation vs. market saturation

• overcapacity vs. competitiveness / investment shifts

• emerging countries’ developmental stages

Responses: resource efficiency (fiber, water, chemicals) and recycling improved SFM, integrated land-use

proactive companies innovate & change business models mature markets home; growing emerging markets product and process innovation, partnerships, leveraging finance

value-added per cubic meter of industrial RW used grows in woodworking industry but falls in P&P, regain competitive position by relocating investments

unequal distribution of benefits of globalization copy or leapfrog steps in forest industry development

The Land Issue5 Fs

Food; [animal] Feed; Forest [conservation]; Fibre and Fuel

REDD+

Innovation Pathways of Sustainable Forest Industries

1. Meeting the multifunctional demands on forest resources and their sustainable management

2. Enhancing the availability and use of forest biomass for bio-based products and energy

3. Developing of intelligent, resource and energy efficient manufacturing processes

4. Developing of innovative products for changing markets and customer needs

Innovations along the Value Chains1. Forest harvesting: simultaneous localization and mapping,

real-time forest modeling and ICT, extracting multiple biomass streams: grass-root solutions for scaling up the bio-economy

2. Mechanical forest industry: mostly incremental innovationon existing products and processes, comb. heat & power, composite products and building systems, product carbon sinks and energy efficiency

3. Chemical forest industry: game-changers from bioenergy, biochemicals and biomaterials, biofuels, high-performance fibres, intelligent paper/packaging, nanotechnology, lowered GHG emissions through substitution of oil-based products

Past to present: Proprietary R&D and incremental innovations

Future: Increasingly open innovation approaches, partnerships, multidisciplinary teams, higher ambitions

Leapfrogging through Investments?• Old mills in the North: conversion into a biorefinery platform, energy and emission

improvements, continue weathering cyclical BAU, or divest• New mills in the South: best technologies and largest scale, energy improvements,

generate carbon offsets and credits• Old, small mills in the South: incremental improvements, or divest• Pace of change: BRICs make 20% of wood pulp, 30% of paper and board

Wood Pulp (mill. tons) Paper and Paperboard (mill. tons)

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Responses of Forest Industries to Environmental Sustainability Issues:• certification

• lowered emissions in water and air

• compatibility with energy and climate change policies

Responses: voluntary compliance started before mandatory becoming enforced by new trade legislations linkages to FLEGT, forest carbon MRV

lowered process water usage, treatment and closing the loops emissions per unit of output, end of pipe capture

energy efficiency is improving in most regions and most parts of the industry process improvements, increased use of self- generated energy from waste, co-products and biomass seek political influence and inclusion of forest management into REDD+ and other climate change accords industry promotes wood and paper products as more environment, climate-friendly than alternatives de-carbonizing economies

Energy Efficiency, Water & Emissions• Despite increased output levels, the global pulp and paper industry consumed

only marginally higher amount of steam and electricity in 2009 than in 2000

• Strive to improve performance against BAT has resulted in 15% energy savings, mainly from the better circulation and re-use of process water, larger scales of mills and higher consistencies of pulp

• Water consumption declined from 37 bill. m3 to 31 bill. m3 in 2000-2010

• Producers in the USA pledge by 2020 to: increase the paper recovery for recycling >70% improve energy efficiency in purchased energy use by min. 10% reduce the intensity of the industry’s GHG emissions by min. 15% consider an impressive 50% freshwater reduction target

• P&P producers in Brazil raised the use of black liquor & biomass to 84% of energy 2009• Europe's industry has lowered its specific CO2 emissions (measured in kt of CO2 / kt of

product) by 42% in1990-2009

Greenhouse Gas Emissions

• Globally, direct emissions intensity (direct GHG emission per product ton) declined by 13% in the pulp and paper industry, and by 16% in the wood products industry between 2002-2007

• Total GHG emissions from the forest products value chain were 890 mill. tons CO2 equivalent per year

• Net sequestration of CO2 from the atmosphere back into the forest products industry value chain was 424 mill. tons CO2e in 2007

• Nearly a half of the emissions were offset by product sinks; out of manufacturing related emissions, the products sequestered 86%

Responses of Forest Industries to Social Sustainability

Factors:• collaborative

forestry

• community engagement

• employment

• education

• lifestyle changes

Responses:

out-grower schemes, conflict resolution capacity & dialogue to engage local communities in wood production and SFM

other than productive activities: schools, health knowledge of local conditions, social structures in communities and cultural aspects

mostly local workforce, including seasonal / part-time direct vs. indirect, multiplier effects higher mechanization and efficient processes

basic & vocational, community members & payroll staff, skills & safety

educating consumers and designers, specifiers low-carbon products promotion, communication

Engage Communities in SFM and biomass production

When competing land uses, subsistence farming and landless people come across unprepared industry...

... it may be too lateInter-cropping

Silvipastures

Communication on sustainabilityResearch on the CSR claims of the Top-100 global pulp, paper, and packaging producers (Han 2010):

Top claims were:“Resource and energy use”“Sustainable forestry”“Pollution and waste management”“Mitigating climate change”“Community support”“Health, safety, and well-being”

The least claimed were:“Ethical leadership”“Responsible/fair remuneration” of the workforce“Promoting social and economic inclusion” in the supply chains“Mapping key stakeholders and their main concerns”

Inclusive communication on difficult technical details

The industry is:

improving sustainability of resource use employing local workforce recycling discarded products back into production, energy increasing energy security and efficiency reducing product carbon footprints

The punch line is about reconciling production with consumption: sustainable products and energy for responsible consumers

Three steps of effective communication:

(i)demonstrate mastery of the technical issues(ii)demonstrate caring about the matter(iii)propose a plan to fix things

Repositioning Forest Industry• Forest-based carbon: green-blue solutions (REDD+, CDM, VCM)

• Sawnwood and wood-based panels: a solution-provider to the “Built Environment and Living Habitat” cluster

• Pulp industry: a biorefinery platform for “Green Energy, Chemicals and Materials” cluster

• Paper and packaging board industry: partner for the “Intelligent Media and Functional Packaging” cluster

Quote: ”A recent AF&PA survey revealed that 80% of the American youth opined they cannot live without paper.”

Pathways of Forest Industry: break out of BAU Tonnages: slowing growth of basic

P&B business in traditional markets

Shares: consumption growth shifting to Asia, Latin America, Africa

2050 population age pyramids are explanatory: compare India, China, Africa (Ethiopia)

The Energy PathwayNuclear 6%

Renewables 13%

Coal 25%

Gas 21%

Oil 35%

77%

9%8% 4%

87%

15%

Bioenergy

Hydro

Other RenewablesMunicipal and Industrial Waste

Agricultural Crops and By-Products

Woody Biomass

Recovered Wood 6%

Agriculture 10%

MSW and Landfill Gas 3%

Charcoal 7%

Forest Residues 1%

Black Liquor 1%

Fuelwood 67%

Wood Industry Residues 5%

Energy Crops 3%

Agricultural By-products

4%

Animal By-products

3%

World primary energy mix

Biomass sources in primary energy mix

IPCC prediction: 77% of primary energy could come from renewable in 2050 (407 Exajoules, needs $12 trillion investments by 2030!)

Forest Industry Pathways for Bioenergy, Fuels

Thermo-Chemical

Combustion Gasification Pyrolysis

Fuel Gases (CO + H2)

Char & Liquids

No AirPartial airExcess air

Liquid transportfuels

SNG, Hydrogen

Bio-Chemical Physical

Hydrolysis & Fermentation

PelletsBriquettes

Heat & Power

Heat & Power

Heat & Power

Liquid transport fuels

Heat & Power

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3 4

5 6 7

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9

Torrefiedpellets

Bio-carbon

Heat & Power

Sugar is the Future’s Oil?• Cellulose and hemi-cellulose contains C5, C6 sugars• Stable, long polysaccharides, difficult to break up, lignin impact• Cane, corn easier to process into bioethanol

Main Sugars from Biomass

Sugar to convert

Fuels and Chemicals(or building blocks)

Glucose (C6) EthanolFructose (C6) Glycerol, lactic acid, 1,3-

propandediol, (OH-) propionic acid

Xylose (C5) Butanol, 1,4 succinic, fumaric and malic acids

Arabinose (C5) Itaconic acid, xylitol, levunic acid

Mannose Galactose

(C6) Citric acid , lysin, gluconic acid, 2,5 furan-dicarboxylic acid

Path:

Crystalline cellulose >>

Glucose>>

Fermentation >>

Fuels & chemicals

Solid and Liquid Biofuels: a Growing Energy Cargo Wood pellets for

energy & chips to pulp: the fastest growing forest product segments(15-20 mill. tons/yr. both)

Global fuels market: $4 trillion.

Biofuels: from 55 mill. tons (oil-eq) to 750 mill. tons 2050

What are the Projects in Cellulosic Ethanol Biorefinery Pathway?

North America:• Not one single technical setup, but several fuel types, technical options and local

configurations• High levels of public support in pilot & demonstration plants in the USA (46 biorefinery

projects funded); Renewable Fuel Standard 2 from EPA• DOE: $564 mill. to 19 integrated biorefinery projects, 8 focusing on wood biomass,

USDA $47 mill. to eight new biorefinery projects (inc. Domtar) • Forerunners mainly outside forest industry: Cobalt, KiOR, Codexis, Mascoma, INEOS,

Enerkem, Bluefire Ethanol, etc.• The US pulp industry benefited from alternative fuel mixture credit for black liquor, now

cellulosic biofuel tax credit in place• In Canada, Fed. Gov’t invests in mill upgrades under Pulp & Paper Green

Transformation Program ($1 bill.) & Transformative Technologies Pilot Scale Demonstration Program (Tolko, Cascades, Canfor)

• Others: G2 BioChem, Rentech, Lignol, Woodland Biofuels

What are the Other Projects for Biofuels Biorefinery Pathway?Worldwide:

Type of biorefinery CompaniesSyngas from forest residues: FT-diesel, chemicals Stora Enso & Neste Oil, Varkaus, Finland

Choren, Freiberg, Germany

TRI, USA

Nexterra, Canada

Syngas from black liquor: FT-diesel, Chemrec, Sweden, Smurfit-Kappa millBioethanol and chemicals from wood SEKAB, Örnsköldsvik, SwedenBioethanol and acetic acid from hemicelluloses Value Prior to Pulping (VPP): Agenda 2020, the U.S.

Department of Energy and eight pulp and paper companies

Biodiesel from tall oil Sunpine, SwedenBioethanol from straw Abengoa, Salamanca, Spain

Dong Energy, Denmark

Ensus Carlyle, UK

FT-diesel from straw FZK, GermanyPyrolysis oil from forest biomass Ensyn, Canada & Honeywell, Chevron, Tolko IndustriesFast pyrolysis to produce power and transport fuels from oil palm biomass

Premium Renewable Energy, Malaysia with Ensyn

Hemicelluloses to buthanol NewPage, Flambeau River, Wisconsin, USAPulp mill biorefinery concept Stora Enso & Metso, Finland, Domtar, CanadaCellulosic ethanol from wheat straw, paper mill waste Chempolis, Finland & two papermills in China

Bioethanol from straw and forest waste Borregaard, Norway

Timeframe: 3-5 years before large commercial scale mills operate

Intermediate Pathway: Chemicals • Chemicals industry uses some 10 different raw materials (fossil fuels, minerals, salt,

water and biomass, etc.)• Some 85% of all chemicals are produced from 20 base chemicals (ethane, propane,

butane, ammonia, benzene, methanol, chlorine, etc.)• Base chemicals are converted to some 300 intermediate chemicals (acetic acid,

formaldehyde, urea, ethane oxide, acetaldehyde, etc.)• Some 35,000 consumer products (plastics, solvents, detergents, pharmaceuticals,

etc.) are produced from the intermediates • Canada’s BioPathways Project estimated a $200 billion market for green chemicals

• Integrating forest industry platforms into these chains & processes opens up innumerous end use segments, where consumption is rising especially in emerging economies

• A huge opportunity for forest-based sector, but raw material concerns (availability, most valuable use, cost) require strategic assessment.

ThankYou!