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 email@example.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: firstname.lastname@example.org 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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