Domtar Inc by kby12992

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									                                           Domtar Inc
P.O. Box 7210,
Montreal, Canada H3C 3M1
(514) 848-5400

Head Office,
395 de Maisonneuve Blvd. West,
Montreal, Canada H3A 1L6

December 16, 1998

Mr. Brian Ross
VCR Inc.
170 Laurier Ave. W.
Suite 600
Ottawa. Ontario
K1P 5V5

Subject : Domtar VCR Submission for 1997

Sir,

Following our recent telephone conversation, please find enclosed Domtar's VCR submission for 1997.
We apologize for any inconvenience this late submission may have caused.

You will notice that Domtar's profile has significantly changed over the past two years. Domtar is
committed to investigate GHG emission reduction opportunities and implement measures to help
Canada move towards its Greenhouse Gas Stabilisation objective. In this regard, Domtar's next
submission will integrate GHG emissions from its newly acquired E.B. Eddy division.

Do not hesitate to contact me should you have any questions.

Yours truly,



Michel A. Meunier
Director
Environmental Programs
Tel : (514) 848-6523
Fax : (514) 848-6558
E-Mall : michel meunier@email.domtar.com

cc.:   Guy L. Boucher
       Vice-President, Environment
                             DOMTAR INC.

                  GREENHOUSE GAS ACTION PLAN




Domtar Inc.
395 de Maisonneuve Blvd. W
Montréal, Québec
H3A 1L6                                        December 10, 1998
                          TABLE OF CONTENTS




EXECUTIVE SUMMARY

A.   COMPANY PROFILE

B.   COMPANY COMMITMENT

C.   APPROACH TO GHG EMISSIONS MANAGEMENT

D.   DOMTAR'S GHG EMISSION PROFILE

E.   DOMTAR'S GHG MANAGEMENT MEASURES

F.   OBJECTIVES AND TARGETS

G.   REPORTING AND COMMUNICATION

H.   CONCLUSION
EXECUTIVE SUMMARY

By accepting the Canadian and provincial governments' challenge to stabilize greenhouse gas emissions,
Domtar has committed, on a voluntary basis, to identify and implement greenhouse gas emission
reduction opportunities, especially energy efficiency measures, at each of its pulp and paper
manufacturing facilities.

The following action plan reviews, for the 1990-1997 period, all stationary emission sources from
Domtar paper and pulp manufacturing facilities and sawmills. It examines all emissions of carbon
dioxide, methane and nitrous oxide from combustion processes. It also attempts to forecast emission
trends for year 2000.

Greenhouse gas emissions from fossil fuels, have decreased 16.6% on a per tonne of production basis,
between 1990 and 1997. Over the same period, however, they have increased 1.1% on a tonne per year
basis. This is the result of a 3.9% improvement in energy efficiency throughout Domtar's paper related
activities, significant increases in production at most facilities and replacement of fossil fuel by
renewable biomass fuels. Overall, Domtar has shown a 7.6% decrease in specific energy consumption
based on tonnes of production for the combined pulp and paper and forest products divisions activities.

Greenhouse gas emissions generated by fossil fuels, on a per tonne of production basis, are expected to
further decrease, mainly by favouring the use of cleaner fossil fuels and by increasing the energy
percentage derived from biomass fuels.

Domtar will continue to define additional opportunities to reduce its greenhouse gas emissions and
increase its energy efficiency in the years to come and add them to its implementation list. Domtar will
also continue to survey its emissions at all of its manufacturing sites and will continue to report on its
progress.

One must remember, however, that emissions of greenhouse gases are closely tied to economic activity
and are directly related to rates of production. Exporting finished goods derived from natural resources
calls for important energy resources. The survival of the pulp and paper industry revolves around a
maximization of energy efficiency and raw material usage. As this is mainly achieved as a result of
production increases, which lower operating costs and make the facilities more competitive, GHG
emissions and economic growth cannot be dissociated. Climate change is as much about economics and
trade as it is the environment.

These comments are not designed to set the stage for under-achievement. They are simply meant to
convey a sense of urgency for the need for intense co-operation between industry and governments in
order to create and implement a win-win agenda for Canada.
A.   COMPANY PROFILE

     Domtar is a major North American manufacturer of pulp, fine papers and forest products, that
     fosters sustainable development through the rigorous application of its integrated forest
     management policy. Domtar a leading manufacturer and marketer of printing and writing papers,
     is also an important packaging manufacturer, through its 50% participation in the newly created
     Norampac, the largest Canadian producer of containerboard and corrugated containers. Domtar is
     also a major Eastern Canadian lumber producer.

     In 1998, through the acquisition of E.B. Eddy, Domtar has strengthen its position in the pulp, fine
     papers and forest products industry. E.B. Eddy has filed its VCR report for 1997.

     In 1997, Domtar employed approximately 5,000 people in more than 25 production facilities,
     distribution points and sales offices across Canada and the United States. Its production facilities
     are located as follows:

                         TABLE 1 - MANUFACTURING FACILITIES

                                                               TYPE OF               ANNUAL
 PROVINCE           NAME                 LOCATION              OPERATION             PRODUCTION
 Québec             Domtar Papers         Windsor              Paper Mill            577,000 t/y
                    Norkraft Inc.        Lebel-sur-            Pulp Mill             242,000 t/y
                                         Quévillon
                    Domtar Forest        Lebel-sur-            Sawmill               175 MMBF
                    Products             Quévillon
                    "                    Matagami              Sawmill               85 MMBF

                    "                    Malartic              Sawmill               55 MMBF

                    "                    Val D'Or              Sawmill               125 MMBF
                    "                    Grand-Remous          Sawmill               100 MMBF
                    "                    Ste-Marie de          Sawmill               50 MMBF
                                         Beauce
                    "                    Ste-Aurélie de        Sawmill               60 MMBF
                                         Beauce
                    "                    Ste-Françoise         Sawmill               5 MMBF
                                                               TYPE OF               ANNUAL
 PROVINCE            NAME                LOCATION              OPERATION             PRODUCTION
 Ontario             Domtar Papers       Cornwall              Paper Mill            283,600 t/y
                     Domtar Papers       St. Catharines        Paper Mill            30,100 t/y
                     Domtar Forest       White River           Sawmill               125 MMBF
                     Products

Domtar has gone through some significant changes since 1990. These are as follows:

 YEAR                       EVENT
 1990                       Sale of Chemical Division
 1991                       Sales of Roofing Products Division
                            Sale of Coal Tar production facility
 1992                       Sale of Wood Preserving Division
 1994                       Newsprint Division spun off as "Alliance Forest
                            Products Ltd."
 1995                       Acquisition of "Produits Forestiers Gatineau Inc."
                            Acquisition of "Les Industries Grondin Ltée"
                            Acquisition of "J.B. Rolland et Fils"
                            Sale of Gypsum Division
                            Sale of Decorative Panels Division
 1997                       Sale of Beauharnois Mill
                            Merger of Domtar's Packaging Division with
                            Cascades packaging facilities to create Norampac
 1998                       Acquisition of E.B. Eddy
B.   COMPANY COMMITMENT

     Domtar has accepted the challenge of the Federal and provincial Environmental and Energy
     Ministers to help Canada move towards its Greenhouse Gas (GHG) stabilization objective.

     With the submission of the Letter of Intent to the Climate Change Programs, Domtar has
     committed on a voluntary basis to investigate GHG emission reduction opportunities, including
     energy efficiency measures, at all its operations.

     This submission of Domtar's GHG action plan reaffirms its commitment. Over the next year,
     Domtar will strive to implement the action items cited in the plan, and to further complete a
     comprehensive GHG inventory where required.

     On-going communication relating to Domtar's GHG Action Plan should be addressed to:

                                   Mr. Michel A. Meunier
                                   Director - Environmental Programs
                                   Domtar Inc.
                                   395 de Maisonneuve ouest
                                   Montréal, Québec
                                   H3A 1L6

                                   Tel: 514-848-6523
                                   Fax: 514-848-6558

                                   E-Mail: michel_meunier@email.domtar.com
C.   APPROACH TO GHG EMISSIONS MANAGEMENT

     Domtar supports a voluntary approach to GHG emissions' management. Its management strategy
     includes the following components:

     1.     The development of comprehensive GHG emission profiles (1990-2000)

     2.     The review and implementation of effective management measures that will reduce net
            GHG emissions

     3.     The commitment to achieve objectives and targets

     4.     The evaluation and communication of progress

     Domtar has followed the CPPA's GHG Action Plan Guidelines (June 1997) to prepare its 1997
     action plan. As stated in the IPCC's reporting guidelines, Domtar has not included GHG
     emissions from biomass sources in its GHG emissions total.

     Domtar's 1997 action plan includes an inventory of CO2, CH4 and N2O emissions for the years
     1990 to 1997, as well as estimates of emissions for the year 2000 from its pulp, paper and forest
     products facilities.

     The focus in Domtar's plan has been on emissions from energy use in stationary sources. These
     emissions have been estimated to account for over 80% of Domtar's total GHG emissions.
     Domtar has identified the measures the company has taken, is taking and is planning to take to
     reduce GHG emissions relating to energy use.
D.     DOMTAR'S GHG EMISSION PROFILE

       The total energy use and GHG emissions data relating to Domtar's pulp and paper and forest
       products manufacturing operations are given in this section. Norampac, the newly created
       packaging company is responsible for reporting its own GHG emissions. E.B. Eddy has already
       submitted its VCR report. The 1999 VCR submission will include a consolidated picture of both
       E.B. Eddy and Domtar's GHG emissions.

       Domtar's Energy Demand and Supply (1990 - 2000)

       The total energy use and production data are presented in Table 2. Total energy consumption for
       the pulp and paper sector increased by 11.5% over the period 1990 to 1997. This increase in total
       consumption is a consequence of a 16.1% increase in total production of pulp and paper products
       along with improvements in efficiencies, process changes and overall better energy management
       of the manufacturing facilities. Specific energy consumption, defined as the amount of energy
       used to produce one tonne of paper, has, however, decreased by 3.9% over the same period.

                                    TABLE 2
                   DOMTAR'S ANNUAL TOTAL ENERGY CONSUMPTION

 DOMTAR                                                                                  PRESENT
 OPERATIONS               UNITS          1990            1997            2000            CHANGES
 (TOTAL-CANADA)                                                                          1990-1997


                            3
 Pulp & Paper             10 GJ/yr       32,300          36,000          38,100          11.5%
                          tonnes/yr      967,417         1,122,761       1,249,391       16.1%
                          GJ/tonne       33.38           32.08           30.5            -3.9%


                            3
 Forest Products          10 GJ/yr       1505            1,737           2100            15.4%
                          tonnes/yr      918,040         1,161,733       1,400,500       26.5%
                          GJ/tonne       1.64            1.50            1.5             -8.5%


 TOTAL
                            3
 ENERGY USE               10 GJ/yr       33,805          37,737          40,200          11.6%

       The Forest Products division shows a production increase of 26.5% from 1990 to 1997, with a
       15.4% energy consumption increase. The specific energy consumption per tonne of production
       has decreased by 8.5%.

       The estimates shown for 2000 reflects the implementation of several protects listed in Section E
       of this action plan. Overall, Domtar's forecast for total energy demand indicates an increase to
       approximately 40,200,000 GJ/year by the year 2000.
The major sources of energy used by Domtar include purchased electricity, fossil fuels (Bunker
oil, natural gas, etc.), and biomass-derived fuels (wood residue and spent pulping liquor). A
breakdown of the total energy use by type is presented in Figure 1.

                                       FIGURE 1




In 1990, 26.2% of the total energy use was from fossil fuels, 13.3% was from purchased
electricity, and 60.5% from biomass. In 1997, fossil fuels accounted for 22.5% of the energy used
by Domtar, while 12.6% came from purchased electricity and 64.2% from biomass. The largest
change in the energy mix came from increases in pulping and recovery capacities, which in turn
increased spent liquor combustion rates. This increase in energy from pulping liquor coupled
with the optimization of the hog fuel combustion units has slightly decreased the average
quantity of hog fuel burned at our facilities. It is however important to recognize that the
reduction of energy supplied by hog fuel does not lead to an increase use of fossil fuels.

As shown in Figure 2, the energy mix is expected to change by a small amount over the next five
years.
                         FIGURE 2 - DOMTAR'S ENERGY

                                       Year 1990




                                       Year 1997




                                       Year 2000




Domtar GHG Emission Profile (1990- 2000)

Domtar's GHG emissions associated with energy use from stationary sources are presented in
Table 3 and Figure 3. The total emissions are reported in tonnes CO2 equivalent. CO2 emissions
from biomass sources are not included.
                                         TABLE 3
                             DOMTAR'S GHG EMISSIONS (1990 - 2000)

 YEAR              EMISSIONS (TONNES/YR)                         TOTAL                PERCENT
                                                                 CO2                  CHANGE
                   CO2            CH4             N2O            EQUIVALENT           FROM 1990
 1990              492,025        221             6,467          498,713              --
 1997              495,470        241             8,379          504,090              1.1%
 2000              464,829        193             4710           469,432              -5.8%

        From 1990 through 1997, the GHG emissions increased by 1.1%. The GHG emissions estimate
        for the year 2000 shows a 5.8% decrease of total GHG emissions based on the 1990 levels. This
        estimate is based on the following assumptions, using 1997 as a baseline:
        -       11.3 % production increase for the pulp and paper sector;
        -       5% reduction in specific energy consumption for the pulp and paper sector, based on
                improved production practices and water consumption reductions.
        -       20.5% production increase for the forest products division (Grand Remous did not
                operate for 12 months in 1997), with a stable specific energy consumption;
        -       50% reduction in residual fuel consumption to be replaced by biomass (1/3) and natural
                gas (2/3).

This would translate into a 15.3% average decrease in specific energy consumption for the overall
Domtar activities.

        Discussion of Trends in GHG Emissions

        According to the above forecast, Domtar expects that, by year 2000, its specific GHG emissions
        will decrease by 15.3%. This is mainly due to: (1) a significant increase in the use of biomass as
        an energy source; (2) a reduction in the use of residual fuels; and (3) enhanced operations.

        1)     Domtar's total production is expected to increase by 40.5% in 2000, when compared to
               1990 levels. All of its chemical pulping facilities have seen marked increase in production
               rates, hence the increase use of spent liquor, as the main fuel source at these facilities.

        2)     Increased chemical pulping rates will increase the need for natural gas in order to convert
               calcium carbonate to lime at the kiln.

        3)     All of Domtar's chemical pulping facilities, accounting for over 96% of the company's
               annual pulp and paper production have been or will be modernized, thus operating more
               efficiently. Productivity improvements at all of Domtar's operating sites have also
               contributed to improving the energy efficiency of its manufacturing sites. Some of these
               gains, however, have been offset by the installation of effluent treatment plants, at all
               pulp and paper mills and the installation in 1994, at our Cornwall facility, of the first ever
               RBC process, which converts old corrugated containers into bleached pulp.
E.   DOMTAR'S GHG MANAGEMENT MEASURES

     Domtar has undertaken numerous actions since the 1970's that have significantly reduced GHG
     emissions from its operations. The measures that have been taken to increase the production of
     self-generated energy from biomass, to reduce energy consumption and to maximize fibre
     recovery have all been steps in the right direction.

     Listed below are the measures that have either been implemented and are underway, or are being
     considered at each facility:

     Operation:    Domtar Papers, Windsor Business Unit - Windsor, Quebec Pulp and Paper
                   Mill

     Completed Projects: 1990 - 1997

            <      Increased productivity and efficiency through various projects related to starting
                   up the new mill.

            <      Installation of metering size presses on both paper machines, which have
                   increased operating efficiencies and production rates.

            <      Overfire on bark boiler, leading to a 5% energy efficiency increase from hog fuel
                   use, thus displacing natural gas.

            <      Addition of third combustion air level on recovery boiler increasing energy
                   efficiency by 5%.

            <      Bleach plant washing efficiency improvements and production of ECF pulp
                   (100% substitution).

     Projects under Consideration

            <      General efficiency and productivity improvement projects. Replacement of
                   existing package boiler

     Operation:    Norkraft Inc. - Lebel-sur-Quévillon, Quebec Pulp Mill

     Completed Projects (1990 - 1997)

            <      Installation of a new, more efficient woodroom.

            <      Modernization of the fibreline and chemical recovery areas, allowing for
                   increased production, enhanced fibre use and better chemical recovery with no
                   increase in total energy usage.

            <      Cogeneration facility (32MW), which will use steam from the new recovery boiler
                   to generate 75% of the mill's electricity requirements.
Projects under Consideration

      <      General efficiency and productivity improvement projects, including reduction of
             water consumption.

Operation:   Domtar Papers, Cornwall Business Unit - Cornwall, Ontario Paper Mill

Projects Completed (1990 - 1997)

      <      Redesign of the recovery stack scrubber system, allowing for increased heat
             recovery, in the form of hot process water.

      <      Rebuild of the wet end of two paper machines, allowing for more efficient
             operations.

Projects under Consideration:

      <      Water management program to reduce water consumption.

      <      Various efficiency and productivity measures on all paper machines will increase
             production without increasing energy utilisation.

Operation:   Domtar Papers, St. Catharines Business Unit, St. Catharines, Ontario, Paper
             Mill

Projects Completed (1990 - 1997)

      <      Shutdown of one paper machine, which reduced total energy usage.

      <      Various effluent reduction projects which allowed for a more efficient use of
             energy.

Projects under Consideration

      <      Extended effluent flow reduction program.
F.   OBJECTIVES AND TARGETS

     For both economic and environmental reasons, Domtar is committed to achieve higher energy
     efficiency levels and, wherever feasible, replace fossil fuels by renewable energy sources.
     Domtar has integrated a policy of energy efficiency throughout its operations, which is seen by
     the decreases in specific energy consumption achieved (-3.9% for 1997) and anticipated (-15.3%
     for 2000) over 1990 levels. In addition it is projected that in year 2000 the overall GHG
     emissions will be reduced by 5.8% over the 1990 levels.
G.   REPORTING AND COMMUNICATION

     Domtar's 1998 VCR submission will incorporate GHG emissions from its newly acquired E. B.
     Eddy division. In consolidating and integrating the business activities of its existing facilities and
     the E.B. Eddy facilities, Domtar will review its energy management program as well as potential
     opportunities to reduce GHG emissions.

     Domtar will investigate opportunities to communicate to employees, shareholders and the
     general public:

     -      The issue of global climate change

     -      Canada's voluntary approach to stabilization

     -      Domtar's contribution to help Canada move towards its goal.
H.   CONCLUSION

     As stated earlier, Domtar has committed, on a voluntary basis, to investigate and implement
     GHG emission reduction opportunities, including energy efficiency measures, at its
     manufacturing sites. This commitment is being demonstrated by the significant reduction in
     specific GHG emissions from its facilities since 1990 and the continuing decrease expected until
     the year 2000 through, among other projects, the modernisation of most of its facilities. These
     modernisation programs have, through the use of state-of-the-art technologies, rendered Domtar's
     manufacturing facilities more energy efficient as well as more competitive in today's global
     marketplace.

     One must remember, however, that emissions of greenhouse gases are closely tied to economic
     activity and are directly related to rates of production. Exporting finished goods derived from
     natural resources calls for important energy resources. The survival of the pulp and paper
     industry revolves around a maximisation of energy efficiency and raw material usage. As this is
     mainly achieved as a result of production increases, which lower operating costs and make the
     facilities more competitive, GHG emissions and economic growth cannot be dissociated. Climate
     change is as much about economics and trade as it is the environment.

     These comments are not designed to set the stage for under-achievement. They are simply meant
     to convey a sense of urgency for the need for intense cooperation between industry and
     governments in order to create and implement a win-win agenda for Canada.

								
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