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PPI Exclusive: Should burning Biomass get the green light?

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PPI Exclusive: Should burning Biomass get the green light?

September 19, 2013 - 07:52
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T’sai Lun should be a household name in our industry. He is the man, from the Hunan province of China, who is widely credited with inventing the paper making process on which today’s elaborate processes are still based. He did this back in A.D. 105 and I sometimes wonder how much we have evolved since then.

We can all be proud of working in a sustainable, Co2 free, bio-based industry. Since T’sai Lun’s days, paper-based products have become an essential part of daily life; from school books to protecting food and from hygiene to packaging. We now collectively employ more than 220,000 people in Europe and add €21 billion in value and wealth creation. and we do this in a sustainable way – forests in Europe have increased by 30% since 1950 and 70% of paper consumed is now recycled (CePi). We could be more vocal in sharing these positive messages with peers, regulators and those with influence.

Cascading Use of Wood

I passionately believe that our industry has a sustainable future with another millennium on the cards. But we should be careful about one growing challenge; our precious raw resource – wood – should be used in the correct order. Once felled from a carefully managed forest, I believe its attributes should be maximised to the fullest possible extent before using it to create energy. What a waste to cut down trees and immediately burn them, on an industrial scale, to make electricity. It is much better to add five times more value by creating useful products (such a paper or furniture) first and, where possible recycling it, before burning it. Seven times more jobs are also created in the process, which in these austere times is really important.

Current EU regulation seems to disagree. There is a noble EU target of generating 20% of energy from renewable sources and, while I support this wholeheartedly, few people realise that at least half of this target is being met by burning trees, rather than through the use of wind turbines, solar panels or hydro power plants. What is worse, this practice is being subsidised by hundreds of millions of euros a year. The public purse is incentivising this unsustainable practice.

I read an article in The economist recently that said, “...the EU has created a subsidy which costs a packet, probably does not reduce carbon emissions, does not encourage new energy technologies – and is set to grow like a leylandii hedge”. I can sympathise with their view.

Ill Considered Behaviour

Burning basic biomass (and I don’t mean biofuels) by the truck load is stone age behaviour. It is neither smart nor green, especially when the wood is transported across the world. What type of economy do you want to live in? is it one based on burning quality wood, in Fred Flintstone manner, to create energy and paying a hefty price for the privilege? or one where wood is used to make valuable products, creating an innovative economy before being used to heat our homes?

Sustainable Approach

In my view, if we are going to encourage the burning of basic biomass, it should only be focused on Rd or as a kick-start incentive for capital expenditure but never as evergreen feed in tariffs or premiums. In addition, it should be limited to the following criteria:

  • ChP combinations with over 70% efficiency or power plants with max 5MW
  • Contingent on proven wood availability for material usage

A McKinsey study found that “there is a mismatch in the future demand for forest biomass and the future 2020, we estimate a gap of roughly 200-260 million m3 of wood” (McKinsey and Pöyry, 2007). Buying and selling wood is certainly in vogue. Increasing consumption, supported by the EU renewable energy targets, is driving up prices and imports for the European pulp and paper industry to an eye-watering scale. The first quarter of 2013 saw record pellet prices across the major European markets. Imports of pellets from north america increased over 60% from 2011 to 2012 with an export value rising from 40 million usd in 2004 to almost 400 million usd in 2012.2 T’sain Lun’s fine Chinese tea would boil over at the sound of these figures.

Alpine Peculiarity 

While that paints the macro picture, let me share a story from closer to home. I am Austrian and have grown up in a country famed for its mountain landscapes – around half of this country is covered by forests. But today Austria is importing wood at a scale comparable to Japan and south Korea and ranks amongst the biggest wood importers in the world. This movement is being fuelled by a national biomass action Plan, whose goal is increase the use of biomass in energy production at any cost, and the amount of wood burnt to create energy thus doubled in Austria between 2000 and 2010. Since 2005, the pulp and paper industry’s wood procurement costs have consequently risen by 58% while volume has increased by only 8%. As integrated packaging and paper companies employ seven times as many people, using the same volume of wood, as biomass plants – jobs are at risk. That is why hundreds of industry employees in Austria were on the streets demonstrating about this in June.

Where to Next? 

The current economic climate and behavioural changes are certainly challenging our industry. But thankfully innovative minds are creating a bright future.

One of the Mondi teams, as an example, recently created a new solution called FibRoMeR® which is a revolutionary polymer reinforced with cellulose fibre that has numerous injection moulding applications in the automotive, logistics, electronics and furniture sectors. Converters and manufacturers want polymers that are not only strong and stable, but also customisable and preferably obtained from renewable sources. We are providing that solution and enhancing the value of our forests in the process.

T’sai Lun paved the way for our industry and it is our responsibility to nurture its future. I believe that burning wood to only create electricity is not the answer to our global energy needs. Here in Mondi, we will keep our minds focused on creating solutions for a customers’ success, delivering exceptional value in a sustainable way.