Curbing Environmental Concerns

In fact, the Sustainability Accounting Standards Board (SASB) identified climate change as the most common issue of materiality across all industries. Their research found that climate change is material in 50 of the 57 industries for which they have issued standards to date. The wood products industry is no exception.

Beyond environmental concerns, energy is a major cost driver in our industry, and excessive energy costs have been cited as a major factor in the recent closure of several US pulp and paper mills.

For years Sappi North America has strategically focused on reducing our use of traditional fossil fuels by seeking out alternative energy sources, including reclaimed oil, construction and demolition wood and tire-derived fuel. Simultaneously, we have increased our usage of traditional biomass sources from woody biomass and black liquor. The cumulative effect results in higher levels of renewable energy, lower greenhouse gas emissions and reduced energy costs.

Access to Natural Gas
The state of Maine has long been underserved by natural- gas infrastructure. In fact, Maine is the most petroleum-dependent state for home heating, with the highest per capita consumption of heating oil. Regional pipeline capacity restrictions result in above-market natural-gas prices, which in turn drive excessive electricity prices during winter months. These costs affect both families and businesses in Maine as well as other New England states.

In 2012, we assessed a range of opportunities for our Somerset Mill to take advantage of emerging natural-gas pipeline projects. In 2013, we established an agreement with Summit Natural Gas to serve as the anchor for their pipeline, which now extends from Richmond, Maine, through the Kennebec Valley and into Skowhegan and Madison, Maine. We have since made a $23 million capital investment in two major areas of the mill to take advantage of the access to natural gas.

In June 2014, we modified a multi-fuel boiler—also known as a “hog fuel” boiler—which produces steam and electricity for the mill. In October 2014, the mill took an annual planned outage. At this time, in addition to performing routine maintenance, we modified the lime kiln, an integral part of our chemical recovery process. In addition to allowing the kiln to burn natural gas, these modifications make the kiln much more energy-efficient by capturing more waste heat through an improved product cooling section. The resulting changes are estimated to reduce the lime kiln operating expenses by at least 30 percent, and the project is anticipated to have a three- to five-year payback period. Additional fuel cost savings will be realized by burning natural gas in the hog fuel boiler.

In order to maximize operational flexibility, we maintained the ability to use fuel oil in both the lime kiln and hog fuel boiler. This allows us to switch fuels as necessary to optimize energy costs at the mill.

Renewable Energy Generation and Consumption
The forest products industry is the largest producer of biomass energy in the country, and the renewable energy generated within this segment exceeds all of the US solar, wind and geothermal energy combined. At Sappi North America, we are well ahead of the wood products industry average, with nearly 80 percent of our energy generated from renewable sources.

Renewable Energy Certificates (RECs) are tradable environmental commodities that represent proof that one megawatt-hour (MWh) of electricity was generated using a renewable energy resource. In the US, REC markets exist under both regulatory compliance schemes and as voluntary programs.

In addition to generating renewable energy for our own consumption, Sappi’s Westbrook and Skowhegan mills are qualified to sell RECs as Maine Class I RECs. These RECs help local utilities companies to meet Maine’s Renewable Portfolio Standard, which requires that at least 40 percent of electricity be generated from renewable sources (Class I and Class II) by 2017. In 2013, over half of Maine’s net electricity generation came from renewable energy resources, with about 29 percent from hydroelectricity, 25 percent from wood and 7 percent from wind.

Sappi’s mills in Cloquet, Minnesota, and Skowhegan, Maine, both generate electricity in compliance with the voluntary Green-e® certification program. These certified RECs are generated on-site and subsequently consumed by Sappi, allowing us to make product level claims that 100 percent of the electricity used to manufacture a selection of our products is certified Green-e® renewable electricity.

When RECs are sold to a third party, Sappi is no longer able to claim that portion of energy as part of our own renewable energy consumption. While we are generating more renewable energy than in prior years, because of REC sales, our consumption numbers have dropped slightly over the past two years. This drop in renewable energy consumption is reflected in our key performance indicators (see p. 59).

Carbon Accounting and Neutrality
Sappi North America conducts an annual greenhouse gas (GHG) inventory using the IFCPA/NCASI Spreadsheets for Calculating GHG Emissions from Pulp and Paper Manufacturing. We would like to acknowledge WRI, WBCSD, ICFPA and NCASI for their roles in developing these spreadsheets.

We report emissions in accordance with the Greenhouse Gas Protocol definitions where:

• Scope 1 represents direct emissions from a manufacturing facility
• Scope 2 represents emissions associated with purchased electricity

These numbers do not reflect emissions from biogenic sources. In other words, the emissions factor for biogenic sources is zero, which is consistent with guidelines published by the Intergovernmental Panel on Climate Change (IPPC).

In November 2014, the US Environmental Protection Agency (EPA) released its revised “Accounting Framework for Biogenic CO2 Emissions from Stationary Sources” (commonly referred to as the Accounting Framework). While the framework is not binding regulation, the document indicates that use of “waste-derived feedstocks” and “certain forest-derived industrial byproducts” are likely to have “minimal or no net atmospheric contributions of biogenic carbon dioxide (CO2) emissions, or even reduce such impacts, when compared with the alternative fate of disposal.”

There remain several outstanding questions about the implementation of the framework; however, these preliminary findings seem to indicate that there will be no significant changes to our accounting methodology. We will continue to track this issue through our trade association, the American Forest and Paper Association (AF&PA).

Read the full Sappi North America Sustainability Report 2014 by downloading an online PDF version directly from our website here or for more on sustainability, check out our eQ microsite at: http://www.na.sappi.com/eQ/index.html.