Esa Hyvärinen Confederation of European Paper Industries (CEPI) Stakeholder day on the EU-Monitoring and Reporting Guidelines – Experiences of the Pulp and Paper Future Wood supply for a growing European Pulp and Paper Industry Ladies and Gentlemen, first of all, I would like to thank Papercast Economie Papetiere for the opportunity being given to the Confederation of European Paper Industries (CEPI) to speak about the Future Wood Supply for our growing European Pulp and Paper Industry. It is very easy to understand that this issue is key for the future prosperity of our industry on the global market. Before going into the issue, let me just spend 1 minute to very briefly present CEPI to you. Esa Hyvärinen Confederation of European Paper Industries (CEPI) Cologne, 12 May 2005

The pulp and paper industry Energy is a key input for the pulp and paper industry: Up to 30% of production costs. 40% of electricity used is produced on site, of which 90% is produced through combined heat and power (CHP) and 52% of all energy consumed comes from renewable energy sources. The industry still purchases 70 TWh of electricity per year. Pulp and paper industry is an energy intensive industry. Even if 40% of the electricity is produced on site and 90% of that through CHP, the industry purchases about 70 TWH of electricity every year. It is easy to see that everything that has an impact on the electricity prices will have a direct and big impact on the pulp and paper industry’s competitiveness.

The pulp and paper industry 880 companies, about 1.300 mills: Several big multinationals, many SMEs. Processes are very different; Chemical pulping generates more energy than the process requires. Mechanical pulping an energy intensive process. Paper mills do not necessarily have any direct emissions (some mills have zero quota). Recycling process demands less energy than mechanical pulping, but does not have a natural source of biomass to be used. Pulp and paper industry is an energy intensive industry. Even if 40% of the electricity is produced on site and 90% of that through CHP, the industry purchases about 70 TWH of electricity every year. It is easy to see that everything that has an impact on the electricity prices will have a direct and big impact on the pulp and paper industry’s competitiveness.

MRG - General comments Testing in practice next year. Not much experience yet – not very much feedback from the mills. Testing in practice next year. Considered to be unnecessary tight for the purpose. Need for some big changes but not very big number of changes. Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

Accuracy – Flexibility – Cost-effectiveness – Level playing field Very accurate – not too flexible – cost-effectiveness can be improved: High accuracy requirement leads to inflexibility and low cost-effectiveness. Possibility to exclude minor emissions, which are smaller than the error margin or uncertainty related to the total emissions of the installation. Tier approach has a potential to lead unnecessary tight requirements and create an un-level playing field. Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

Combustion Possibility to use mill-level calculation must remain: Most (if not all) of the emissions from pulp and paper industry are from combustion of fossil fuels that come outside the mill. Based on current practices in taxation for example. Can benefit of the documentation from normal bookeeping (fuel purchaces). Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

Combustion Tier approach: Installations emitting more that 50 kt/y: Batch level analysis of the net calorific value, emission factor, composition and oxidation factor to be carried out by a laboratory certified according to EN ISO 17025. Standard emission and oxidation factors: The more standard emission and oxidation factors the better. Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

Combustion Biomass: General method to define biomass content of mixed fuels still missing. Biomass content to be analysed by a laboratory certified according to EN ISO 17025. Why analyse the net calorific value if the emission factor is assumed to be zero anyhow? List also crude tall oil, tall oil and pitch oil as pure biomass. Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

Production of pulp and paper Process emissions: Emissions from the use of carbonates as make-up chemicals in pulp mills (CO2 from CaCO3 that compensates biogenic lime mud): The amount is negligible (e.g. in Finland 2.000 t out of 5.000.000 t of total emissions from the pulp and paper industry). The lost material is usually landfilled, which means that there are no emissions. These emissions should be excluded as a minor source. Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

Production of pulp and paper Process emissions: CEPI currently assessing what in the end should be considered as process emissions in the case of pulp and paper industry: Lime kiln, recovery boiler, infra- red dryers in papermachines, etc. Following the analysis made by ALTERRA, the current felling level of roughly 420 million m3/year can probably be enlarged with 100-150 million m3/year without endangering the forest resource. We could easily increase the fellings up to 80% of the Net Annual Increment (NAI). By doing so, the level of NAI will maintain, older forests have a lower NAI. Another solution is to further increase the amount of wood and this via afforestation, reforestation, fast growing plantations like short-rotation forestry. In principle, 10 million ha of fast growing plantations could deliver 200 million m3/year. Agricultural energy crops will certainly decrease the competition for the material we are using. Another route consists in raising the forest owner’s interest for forest management by supporting their initiatives aiming at better market access. We should keep in mind that a lot of private forest owners do not depend on the forest for their income. As already highlighted, the building of partnerships is a must. We believe that a Global Forest Convention would also contribute to our goal of increasing and securing wood availaibility as it would amongst others recognise the forest-based industries as a self-standing sector, stressing the economic aspects of forests. Closer to us, a more visible European forest policy would pursue the same objective. Some other ideas are: Establish a level playing field for all users of the renewable raw material wood in respect of free-market principles (and then I refer to the existing competition with the energy generators);

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