Energy projects continue to transform Canadian mills

Read so far

Energy projects continue to transform Canadian mills

February 06, 2011 - 23:32
Posted in:

NEW YORK, Feb. 7, 2011 (RISI) -Recently announced projects, supported by new and existing government-backed strategic initiatives, are key components to re-energizing the country's forest products industry through energy improvements and technology innovations.

The transformation business will keep Canadian pulp and paper companies very busy for the next few years. Funding from various government programs is pouring new investments into mills around the country, aimed at projects that will improve energy efficiency and develop new energy innovations. The programs, part of a larger, combined effort by the government of Canada, are intended to change the way companies and the public views the business of forest products. If successful, they could make the country's forest products industry more profitable and competitive, and more sustainable at the same time. These initiatives could also fuel an even larger project: Keeping Canada's bioeconomy growing.

One part of this double-barreled approach is the Pulp and Paper Green Transformation Program. This $1 billion fund, established in 2009, was targeted for projects that improve environmental and energy efficiency or add to a mill's capacity to produce alternative energy. Domtar, Canfor Pulp, West Fraser, and Alpac Forest Products were some of the largest recipients of funding in this program. Many of the projects announced through the program involve upgrading boilers, improving steam and heat demands, and reducing emissions. With the most recent set of announcements in January, the funding from the Green Transformation program is largely exhausted.

Another part of the approach is a series of strategic initiatives under Canada's 2010 Economic Action Plan. Providing $170 million over two years, these initiatives are all centered around innovation and market diversification in the forest products industry. Projects that implement new technologies, such as Catalyst's Crofton Paper Mill, fall under the Transformative Technologies Pilot Scale Demonstration Program. These programs are specifically designed to help mills implement new technologies that lead to reductions in energy usage and fresh water consumption. An additional $100 million has been set aside for the Investments in Forest Industry Transformation Program to promote the development of advanced technologies in the industry.

The timeframe for these projects, however, is not open-ended. The funding from these programs should be infused into the industry within the next two to four years. And these investments are not meant to be long-term subsidies. While the Green Transformation program was, in part, a response to US government subsidies of pulp and paper companies, work on projects that receive this funding must be completed by March 2010. Once completed, the industry and the government both hope the country's forest sector will be well on its way back to profitability.

Upgrades and improvements funded by Canada's Green Transformation program, such as new projects announced for Domtar's Kamloops mill, are examples of the transformation taking place in the forest products industry

Improving on capital investments

The January announcements for projects to be funded under the Pulp and Paper Green Transformation Program totaled $278 million. Canfor Pulp received over $100 million for its newest projects that included improvements to its Northwood Pulp mill in Prince George, British Columbia. By upgrading the recovery boiler, evaporator, and emissions-reducing equipment, Canfor expects the mill will see a greater production of renewable electricity and increased energy efficiency, as well as a reduction in odor coming from the plant.

Other projects announced were efficiency improvements at Cariboo Pulp and Paper in Quesnel B.C., the Twin Rivers Paper mill in Edmunston, New Brunswick, and two of Irving Paper's mills in Saint John, N.B. Upgrading equipment to reduce steam and hot water usage at these plants will result in renewable energy gains that can be returned to the main electrical grid.

These projects are made all the more significant by the fact that many of the mills have gone without capital improvements for years, primarily due to the industry downturn and the economic recession. Structuring the program to support necessary, overdue capital improvements that also improve energy efficiency is one of the key aspects of the Green Transformation program.

Avrim Lazar, President and CEO of the Forest Products Association of Canada (FPAC), said the program should serve as "an excellent example of smart policy and smart spending" that will help support Canada's economy in the long-term. "It demonstrates a strong understanding of the transformation now taking place in Canada's forest products industry," said Lazar in a statement.

Domtar was another of the January announcements, with new projects at its Kamloops mill in British Columbia. All four of the company's mills have announced projects for a total $143 million, making Domtar the largest recipient of funds from the Green Transformation program. The most recent Kamloops projects will build onto infrastructure updates announced earlier, energy conservation projects that will reuse steam and hot water and increase renewable electricity. Domtar also announced upgrades to its biomass boiler and steam reduction projects at its Windsor Pulp mill.

Catalyst Paper is developing a new technology to convert pulping waste sludge into biogas and fertilizer, possibly opening new commercial markets

New commercial applications

Upgrades and capital improvements to existing infrastructure can only go so far. To reach a higher goal, new technologies and innovations hold the key. As part of a $2.5 million investment from the Transformative Technologies Pilot Scale Demonstration Program (TTPSD), a new waste sludge convertor will be tested at the Catalyst mill in Crofton, British Columbia. This new Canadian-developed technology is expected to convert pulping waste sludge into biogas and fertilizer, reducing the mill's carbon footprint and landfill waste.

Aside from environmental benefits, the waste sludge convertor could also open up new market opportunities for the forest products industry. The Crofton project is also receiving funding from FPInnovations, Elemental Energy, and Paradigm Environmental Technologies, companies who are researching how to increase sustainability and viability in the forest products industry. FPInnovations, who helps to develop the TTPSD program, believes the best approach is the combination of the environmental and the commercial.

"As Canada's forest sector innovation hub, we believe that through multiparty projects we will be able to demonstrate the viability of new technology with a view to creating and marketing new products and developing new markets," said Jim Dangerfield, Executive Vice-President, FPInnovators.

The Alberta Newsprint mill in Whitecourt, Alberta is one of the latest locations for developing new technologies. Receiving $1.05 million in funding from TTPSD, the mill will implement new technologies to reduce energy and fresh water consumption. The project will allow Alberta to consume larger volumes of sawmill residues and chips from pine attacked by the mountain beetle, while reducing fresh water use at the same time.

Alberta Innovates Bio Solutions is also contributing funds to the project, seeing the market benefits of establishing new technologies in the industry. "The commercialization of this technology at Alberta Newsprint may lead to solutions for our pulp and paper industry in addressing the mountain pine beetle challenge and water sustainability, said Stan Blade, CEO of Alberta Innovates, in a recent statement.

The projects at the Crofton and Alberta mills will be early tests for the TTPSD program, whose success could lead to the development of other commercial applications of forest products.

Ken Norris is a US based contributing editor to PPI magazine and the RISI community website and can be contacted at: knorris@quintstrategies.com