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The forest products value chain: Energy and Climate Change. A Discussion Sponsored by: The Sustainable Forest Products Industry Project of the World Business Council for Sustainable Development (WBCSD) and The International Council of Forest and Paper Associations (ICFPA).

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slide1

The forest products value chain:

Energy and Climate Change

A Discussion Sponsored by:

The Sustainable Forest Products Industry Project of the

World Business Council for Sustainable Development

(WBCSD)

and

The International Council of Forest and Paper Associations

(ICFPA)

slide2

Overview ofThe Forest Products Industry Value Chain and the Global Carbon CycleandThe Climate Change-Related Issues Faced by the Forest-Based IndustryPresented by Reid Miner, NCASI

slide3

What is the Forest-Based Industry Value Chain?

  • Value Chain Elements
  • Forestry
  • Manufacturing
  • Transport
  • Product Use
  • Recycling
  • Other End-of-Life Uses
  • Product Disposal
  • Value Chain Attributes
  • Carbon Cycle
  • Recycling
  • Biomass-based
  • Substitution effects
  • Economic & Social benefits
why a value chain perspective
Why a Value Chain Perspective?
  • Allows a holistic examination of impacts and opportunities
  • Provides insights that can be important to public policy
  • Is required to properly understand sustainability
    • “The climate change issue is part of the larger challenge of sustainable development. As a result, climate policies can be more effective when consistently embedded within broader strategies designed to make national and regional [and corporate] development paths more sustainable.” (IPCC 2001)
the forest products industry value chain and the connections to the climate change issue
The Forest Products Industry Value Chain and theConnections to the Climate Change Issue
  • First, an overview of the current situation
  • Then some of the issues faced by the forest-based industry
sequestration of carbon in forests and forest products
Sequestration of carbon in forests and forest products
  • The forest-based industry is intimately connected to the global carbon cycle
  • Some background
slide8

Major Carbon Stocks

IPCC 2001

Atmosphere

730 Gt C

Terrestrial

Oceans

2,300 Gt C

38,000 Gt C

slide9

Major Carbon Stocks and Gross Annual Carbon Flows

IPCC 2001

Atmosphere

730 Gt C

90 Gt/yr

120 Gt/yr

120+ Gt/yr

90+ Gt/yr

Terrestrial

Oceans

2,300 Gt C

(1200 in Forests)

38,000 Gt C

slide10

Relatively Small Net Annual Fluxes are Causing Increases in Atmospheric CO2

IPCC 2001

Atmosphere

1.7 Gt/yr

Land Use Change

5.4 Gt/yr

1.9 Gt/yr

1.9 Gt/yr

Land Uptake

Burning Fossil

Fuels

and

Cement

Manufacture

Terrestrial

Oceans

changes in global forest carbon stocks ipcc 1996 2000 2001
Changes in Global Forest Carbon Stocks (IPCC 1996, 2000, 2001)
  • Forest carbon stocks are generally stable or increasing in middle and high latitudes.
  • Forest carbon stocks appear to be declining in the tropics, but estimates are uncertain.
carbon stored in forest products
Carbon Stored in Forest Products
  • Carbon in forest products
    • removed from atmosphere in the forest
    • remains sequestered during product use
  • Forest Product carbon pool growing
    • recent estimate = 0.04 Gt C yr-1, (IPCC 2003)
  • Forest Product carbon pool will continue to grow for a long time
    • long times-in-use for many products
    • slow decomposition in landfills
    • increasing standards of living
estimating carbon stored in forest products
Estimating Carbon Stored in Forest Products
  • National Inventories
    • IPCC’s 2003 “Good Practice Guidance for Land Use, Land-Use Change and Forestry” - Appendix 3a.1
  • Corporate or Value Chain Inventories
    • ICFPA Tools being developed
    • Based on the “100-Year Method”
    • Will be reviewed for use under WRI/WBCSD GHG Protocol
manufacturing emissions of ghgs
Manufacturing Emissions of GHGs
  • Global forest products industry direct emissions
    • 0.072 Gt C yr-1
    • Approximately 1.3% of global C emissions
  • Global indirect emissions more uncertain
    • Indirect emissions from purchased power are perhaps 50% to 75% of direct emissions
  • The forest-based industry’s GHG profile benefits from;
    • Extensive use of biomass for energy
    • Extensive use of Combined Heat and Power (CHP)
slide15

Benefits from Biomass Fuels and CHP

  • The forest products industry derives more of its energy from biomass than any other industry
    • Approximately 50% of energy requirements in OECD countries
  • The pulp and paper industry is among the leaders in using CHP systems
    • Reduces fuel requirements, including fossil fuels
    • Often powered by biomass fuels
    • In many countries, CHP systems supply more than 1/2 of electricity needed by pulp and paper mills
estimating manufacturing emissions of ghgs
Estimating Manufacturing Emissions of GHGs
  • Pulp and paper mill calculation tools
    • ICFPA/NCASI calculation tools
    • Accepted for use under WRI/WBCSD GHG Protocol
  • Solid wood products manufacturing calculation tools
    • Developed for AF&PA and FPAC by NCASI
    • Being reviewed by WRI/WBCSD for use under the GHG Protocol
so we see that the carbon profile of the forest based industry consists of
So we see that the carbon profile of the forest-based industry consists of;
  • Carbon in the forest
  • Carbon in products
  • Biomass energy
  • Carbon recycled, beneficially used, disposed
  • Manufacturing emissions
  • Indirect emissions
  • Other emissions along the Value Chain
carbon sequestration issues
Carbon Sequestration Issues

1. The Productivity - Sequestration connection

  • Higher forest productivity = Reduced footprint
  • Higher productivity = Cost competitive carbon-sequestering products that can displace more GHG-intensive alternatives

2. Dangers of emphasizing forest sequestration

  • Leakage of benefits
  • Misses importance of other value chain effects
  • Makes carbon-intensive substitutes more attractive
  • Carbon storage in the forest probably saturates more quickly than storage in forest products
carbon sequestration issues20
Carbon Sequestration Issues

3. Managing for multiple objectives

  • Developing tools that allow the cost of carbon and other environmental attributes to be reflected in forest management decisions

4. Integrating carbon into corporate sustainability

  • Connection to sustainable forestry
  • Impacts on industry’s ability to provide economic and social benefits to rural communities and other stakeholders
biomass fuel issues
Biomass Fuel Issues

1. Competition for fiber

  • Market-distorting public policies
  • Many non-carbon benefits accrue when fiber is used as a feedstock rather than fuel
  • Unintended substitution effects

2. Need policies that encourage additional supply of virgin and recovered fiber

manufacturing ghg issues
Manufacturing GHG Issues

1. Opportunities for improved efficiencies

  • Incentives

2. Regulatory and market barriers to increased use of CHP and export of electricity

3. The costs to achieve GHG reductions

4. Changing fuel costs

5. Different types of mills have different opportunities

6. Must consider the turnover of capital

value chain ghg issues
Value Chain GHG Issues

1. Net effects of forest management on emissions from the forest

2. Indirect emissions can be significant

  • Purchased power, transportation, energy-intensive raw materials
  • Opportunities for partnering or process changes to achieve reductions

3. End-of-life emissions from forest products

  • The complicated effects of recycling
  • Less organic waste is going to landfills
  • Biomass fuel from landfill methane and non-recyclable paper
substitution effects issues
Substitution Effects Issues

1. Over the long term, substitution effects are very important

  • Often greater than sequestration
  • Most substitution effects are “permanent”
  • Building products as an example

2. Some substitution effects are understood

3. In many cases, however, a better understanding is needed

many issues to discuss
Many issues to discuss
  • Sequestration of carbon in forests and products
  • Manufacturing emissions of greenhouse gases
  • Biomass as a substitute for fossil fuels
  • Combined heat and power
  • Value chain emissions of greenhouse gases
  • Choices between products based on GHG-intensity and climate concerns (substitution effects)
closing observations
Closing Observations
  • The globe’s population is growing while standards-of-living are increasing
  • An examination of the value chain suggests that the forest-based industry can help meet this global sustainability challenge.
  • The industry has the opportunity to provide products that
    • provide carbon and other environmental benefits
    • provide a range of economic and social benefits
    • support rural economies
  • But a range of issues must be addressed