SFPNA Sustainability Report 2012: Energy and Emissions

Energy is the third largest draw on our operating costs behind wood fiber and chemicals.

As such, we hold a long-standing commitment to control energy usage. Environmental impact is affected not only by the amount of energy, but also by the type of energy consumed. SFPNA has made significant effort to reduce our reliance on fossil fuels to reduce greenhouse gas emissions and to separate our operations from the volatility of energy prices.

On a national level, the US energy profile is comprised of less than ten percent renewable energy. In contrast, pulp and paper mills derive nearly two thirds of their energy from renewable sources consisting primarily of black liquor and woody biomass. In fact, 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 this country’s solar, wind and geothermal energy combined.

At SFPNA, we are well ahead of the industry average, with over 80 percent renewable energy. When compared to a 2007 baseline, we have reduced our greenhouse gas emissions from fossil fuels by 53 percent. As a result, we have the lowest reported carbon intensity amongst our domestic competitors (as reported on a Scope 1 and Scope 2 basis).

Renewable Energy Certificates (RECs) are tradeable environmental commodities which represent proof that one megawatt-hour (MWh) of electricity was generated from a renewable energy resource. In the US, REC markets exist under both regulatory compliance schemes and as voluntary programs. As of September 2012, 29 states plus Washington DC and two territories have adopted policies (the Renewable Portfolio Standard, or RPS) that reduce emissions from electricity generation by requiring that utilities generate a specified share of power from renewable sources. Voluntary markets for RECs, while not mandated by law, have developed in response to energy user preferences for renewable electricity and provide a mechanism to help fund new renewable energy projects that would not otherwise be cost competitive as compared to electricity generated from fossil fuels.

Co-generation All of SFPNA’s mills utilize co-generation—also known as combined heat and power. Co-generation technology is widely recognized as the most efficient method for producing electricity and co-generation power plants are often 50 to 70 percent more efficient than stand-alone power plants. In addition to electricity, our mills utilize steam throughout the operations for both thermal energy (e.g., cooking pulp or drying paper) and mechanical energy (e.g., turning shafts on rotating equipment).

Sappi’s mills in Cloquet, Minnesota, and Skowhegan, Maine, both generate electricity in compliance with the Green-e® certification program. As such, certified RECs are generated on-site and subsequently consumed by Sappi, allowing us to make product level claims that 100% of the electricity used to manufacture our product is certified Green-e® renewable electricity. Paper buyers that select certified papers and use a printer that is also using certified electricity are now able to apply a logo to printed pieces reflecting their responsible choice. Our mill in Westbrook, Maine, is qualified to sell compliance RECs.

Energy Intensity While we have achieved significant results in reducing greenhouse gases, we are also implementing strategies at our sites to further reduce our energy intensity by ten percent over a five-year timeframe. Energy intensity is defined as energy consumed per unit of saleable product. Reducing energy intensity can also be thought of in terms of increasing energy efficiency.

Since we have already made significant investments and have a track record of historically reducing energy usage, this goal is considered quite aggressive. Nonetheless, through strategic capital planning and by utilizing Lean and Six Sigma techniques to identify savings opportunities and increase machine efficiency, we are on our way toward achieving this important objective. By way of comparison, our trade association has established an industry-wide goal to increase energy efficiency by ten percent over a 15-year time span. Many projects focus on heat recovery to reduce steam usage. We have achieved significant savings of electrical usage by implementing more efficient equipment (e.g., variable drive motors for pumps). We have also found significant energy savings opportunities by focusing on compressed air and hot water systems throughout the mills. Since the energy and water systems are integrated, many projects that save energy also result in reduced water use.

Fuel Switching Opportunities We have strategically reduced 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. We are also investigating higher usage of natural gas in place of fuel oil to further reduce CO2 emissions since greenhouse gas emissions are nearly 40 percent higher for oil compared to natural gas. With at least two natural gas pipeline projects on the drawing board in Maine, we are now assessing opportunities for the Somerset Mill to make necessary equipment changes for using gas instead of oil.

To read the full report, please download a PDF from our website link: 2012 Sustainability Report.