FOREST BIOFIBRE ALLOCATION AND USE

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1 Forest Management Directives and Procedures 03 Forest Resource Disposition FOR Forest Biofibre Directive FOREST BIOFIBRE ALLOCATION AND USE Approval date: May 15, 2013 Review date: April 2018 Contact: Forest Economics Section Forest Tenure and Economics Branch Forestry Division INTRODUCTION There is growing concern with human impact on the environment and how it may be affecting the earth s climate. The use of non-renewable fossil fuels is seen as a major contributor to greenhouse gas emissions and global warming. To assist in addressing these environmental issues there is a need to make a shift to a lowcarbon economy by using renewable resources such as forest biofibre to provide energy and materials currently derived from non-renewable fossil fuels. There is a consensus that the world supply of oil and natural gas cannot keep pace with economic growth. World shortages of energy (oil and natural gas) are likely to occur between now and New sources of alternative fuels from renewable resources such as forest biofibre can be provided to help meet Ontario s needs. The Ontario Power Authority is considering the potential of bio-power within the planning process for the Integrated Power System Plan. The forest industry is well positioned to make use of local sources of forest biofibre to produce heat and electricity. As the province s largest power user it is anticipated that the forest industry will use forest biofibre to replace fossil fuels to reduce the costs of heat, power and electricity for their manufacturing processes and at the same time offset significant electrical demand on Ontario s power system. The opportunity exists for Ontario to use its abundant supply of forest biofibre, industrial capacity, infrastructure and expertise to support northern and rural economies, create new business opportunities, support sustainable growth and generate new wealth. Resources such as forest biofibre will be used to replace non-renewable inputs for the production of biomaterials, bioenergy, and biopharmaceuticals and other bioproducts 1. The Ontario Ministry of Natural Resources (MNR) can assist the shift to a low-carbon economy by making prudent, timely decisions with respect to allocation and use of forest biofibre within the context of existing environmental legislation, regulations and policies. POLICY CONTEXT In Ontario, MNR is the steward of Crown lands and waters, which cover 87 per cent of the province. MNR stewardship responsibilities include overseeing the sustainable use and conservation of Ontario s forests, fisheries, wildlife, provincial parks, mineral aggregates, and petroleum resources. Ontario s forests cover 66 per cent of the provincial land mass and 82% of the forest is owned by the Crown. 1 Bioproducts are biochemicals, proteins, or polymer building blocks derived from the bioprocessing of renewable resources. Produced in large volumes, bioproducts form the building blocks for renewable fuels, biodegradable plastics, food additives, and therapeutic compounds. (Source: Purdue University Integrative Center for Biotechnology and Engineering). FOR May 15, 2013 Page 1 of 6

2 Strategic Policy Direction Long term strategic direction and current priorities are set out in strategic policy documents and guide MNR s activities. Our Sustainable Future sets out fundamental policy direction for MNR and provides strategic direction in several key areas. Ontario s Forest Biofibre Policy supports a number of the MNR s organizational goals referenced in Our Sustainable Future, including: 1. Healthy natural environment for Ontarians - MNR has proposed a strategy to enhance efforts to understand, mitigate impacts on biodiversity, and adapt to climate change. Another strategy is to provide new ventures in renewable energy (water, wind, co-generation, and biofuels). 2. Economic growth for Ontario communities - a resource development strategy is proposed to be aimed at identifying natural resource economic opportunities, in support of healthy, strong communities. MNR s Policy Framework for Sustainable Forests captures Ontario s commitment to sustainable forest management. This commitment is entrenched in law in the Crown Forest Sustainability Act (CFSA). The Forest Resource Assessment Policy supports directions in the Policy Framework for Sustainable Forests for ensuring that desired future conditions are defined and that actions taken are compatible with maintaining and restoring this condition. Legislation and Regulation Direction MNR administers and regulates Crown forests under the authority of the Crown Forest Sustainability Act (CFSA). The CFSA entrenches in law Ontario s commitment to forest sustainability. The CFSA includes provisions for the regulation of forest management planning, information, operations, licensing, allocation of forest resources, processing facilities, compliance and enforcement mechanisms required to ensure the sustainability of Ontario's Crown forests. Detailed technical direction for forest management planning is applied through the regulated CFSA manuals. Two of these manuals are the Forest Management Planning Manual and the Forest Operations and Silviculture Manual. The Forest Management Planning Manual requires each forest management plan to include a determination of sustainability that is a conclusion that the plan provides for the long-term Crown forest health on the management unit and has regard for plant life, animal life, water, soil, air and social and economic values, including recreational and heritage values. Further, forest operations prescriptions for harvest, renewal and tending activities are required by the CFSA and must be consistent with the direction in forest management plans and forest management guides, which are an integral part of the Forest Operations and Silviculture Manual. Declaration Order MNR-71 regarding MNR's Class Environmental Assessment Approval for Forest Management on Crown Lands in Ontario (Ministry of Environment, June 2003) as amended issued under the Environmental Assessment Act defines broad direction for forest management planning and complements the forest management planning principles in the CFSA. POLICY DIRECTION Forest biofibre FOR May 15, 2013 Page 2 of 6

3 Forest biofibre refers to forest resources 2 from Crown forests that are not normally being utilized for conventional forest products and that are made available under an approved forest management plan. Forest biofibre includes tree tops, cull trees or portions of trees, individual and stands of unmerchantable and unmarketable trees, and trees that may be salvaged as a result of a natural disturbance. Forest biofibre does not include residual by-products such as wood shavings, sawdust, bark or wood chips produced during mill operations. Purpose The purpose of this policy is to provide the general direction for the allocation and use of forest biofibre from Ontario s Crown forests 3. Goals This policy will guide the use of forest biofibre: 1. To create and support new opportunities to develop and use new technologies and products in order to diversify the Ontario economy; and, 2. Encourage the use of forest biofibre to reduce Ontario s dependence on fossil fuels and reduce energy costs through the development of bioenergy and biofuels projects. Policy Objectives The objectives of this policy are: 1. To improve the utilization of forest resources by encouraging the use of forest biofibre for the production of energy and other value added bioproducts; 2. To continue to identify opportunities that may benefit Aboriginal people, through forestry initiatives that may become available with the development and utilization of forest biofibre; 3. To evaluate the best end-use for forest biofibre by balancing the social and economic benefits to the people of Ontario with environmental stewardship; 4. To assure MNR s commitment to sustainability by ensuring the allocation of forest biofibre is consistent with all existing policy, legislated requirements and approved forest management plans; 5. To develop and implement a pricing strategy that considers the renewal costs for forest resources and that will support the growth of new and existing industry through the use of forest biofibre; and 6. To provide a flexible approach that will address a range of objectives and provide for immediate and future opportunities. Guiding Principles 1. Allocation, management and sustainable use of forest biofibre will occur within the framework of established legislation and existing policy direction (e.g. Crown Forest Sustainability Act and its associated regulated manuals and procedures, Declaration Order MNR-71 regarding MNR's Class Environmental 2 "forest resource" as defined by the Crown Forest Sustainability Act, means trees in a forest ecosystem, any other type of plant life prescribed by the regulations that is in a forest ecosystem, and parts of or residue from trees in a forest ecosystem. Currently there are no plants that are prescribed as a forest resource under the regulations. 3 Crown forests as defined under the Crown Forest Sustainability Act, means a forest ecosystem or part of a forest ecosystem that is on land vested in Her Majesty in right of Ontario. FOR May 15, 2013 Page 3 of 6

4 Assessment Approval for Forest Management on Crown Lands in Ontario as amended, Forest Management Guides, etc.). 2. Allocation decisions will consider economic and employment opportunities for communities and Aboriginal peoples and give priority to providing those opportunities. 3. Allocation decisions will take advantage of synergies within the existing forest industry and support the development of emerging bioproducts industries. 4. Existing mechanisms for legislative and policy development will be used to adapt policy and management direction (e.g. Environmental Bill of Rights Registry, Provincial Forest Policy Committee, Provincial Forest Technical Committee, and other forms of consultation). 5. Allocation decisions will consider how use of the resource will contribute to the competitiveness and long term viability of the forest industry and assist the forest sector to restructure and diversify. 6. Allocation decisions will consider how use of the resource will contribute to Ontario s renewable energy commitments. 7. Allocation decisions will continue to recognize the costs incurred by the forest industry to access and manage forest resources. APPLICATION This policy applies to Ontario s Crown forests. The right to use forest biofibre will be conveyed through a licence issued under the CFSA. Forest biofibre harvesting will apply: 1. Only on areas in approved forest management plans that are selected for harvest, in accordance with acceptable forest operation prescriptions based on existing requirements and direction provided in forest management guides; 2. To previously harvested areas only where forest renewal requirements will not be compromised. Allocation The CFSA, section 24, (1), (2) and (3) provides for the allocation of forest resources. Allocations of forest resources may be made by a competitive process, or another process authorized by the Lieutenant Governor in Council (Order in Council 993/95) or, a process required by a supply agreement or a forest resource licence. Where there are competing future economic development opportunities a competitive process or a regulated process as prescribed by the CFSA will be the preferred approach to making allocation decisions. This will not preclude the use of the other mechanisms set out in the CFSA. Where there is a need to implement the regulated process set out in Order in Council 993/95 for allocating forest resources the Minster may consider making a direct allocation of forest biofibre. Allocation decisions for forest biofibre will consider area or volume based allocations, taking into account the needs of existing industry, available supply and potential new opportunities. Aboriginal People s opportunities Throughout the allocation process, MNR, in collaboration with the proponents will give priority to pursuing opportunities for Aboriginal peoples and communities. FOR May 15, 2013 Page 4 of 6

5 Where new opportunities to utilize forest biofibre arise through a competitive process, MNR will include evaluation criteria that will give a higher priority to proposals that identify benefits for Aboriginal peoples. Proposals from Aboriginal communities and from Aboriginal partnerships or that provide economic benefits to Aboriginal peoples will receive priority with regard to consideration for access to forest biofibre. The mechanism to address these opportunities will be provided through ongoing local negotiations with the Ministry of Natural Resources and affected Aboriginal communities (Condition 34 of Declaration Order MNR-71 regarding MNR's Class Environmental Assessment Approval for Forest Management on Crown Lands in Ontario, as amended). Where an opportunity to utilize forest biofibre exists MNR will notify affected Aboriginal communities. During the allocation process, where an Aboriginal community or proponent indicates there is an interest in utilizing forest biofibre, MNR, in collaboration with the Aboriginal community and potential industry proponents will assist in identifying those opportunities and discussing potential benefits to be derived. Forest Resource Facility Licensing To use Crown forest resources, including forest biofibre, proponents are required to have a Forest Resource Processing Facility Licence and provide a business plan for the facility. (CFSA sections 52, 53, and 54) To issue a Forest Resource Processing Facility Licence the Minister of Natural Resources must be satisfied that there is a sustainable supply of forest resources available to meet the requirements for the facility. A business plan is required for a new facility, and where improvements to facilities are undertaken an updated business plan is required. Where a proponent proposes to utilize forest biofibre and wishes to receive an allocation of this resource, business plans for affected mills, new or existing, will be developed or revised and submitted to the Minister for approval under the terms of the Forest Resource Processing Facilities licensing requirements. IMPLEMENTATION As the development of new technologies progresses, opportunities may arise for the use of forest biofibre in various forms as energy alternatives, chemicals, biofuels, and other bio-products. The demand for forest biofibre is anticipated to increase and become more diversified. MNR will encourage the development of these value-added bioproducts and bioenergy projects to support the development of a forest bioproducts and bioenergy industry. MNR will recognize and encourage long-term business-to-business agreements identified in proposals for an allocation of forest biofibre and business plans for Forest Resource Processing Facility Licences. To provide for future economic development opportunities, allocation decisions may include reserving some areas or volume of forest biofibre to respond to future opportunities for Aboriginal peoples and Ontario s communities, for value-added bioproducts. Pricing Crown charges, which include Prices (minimum and residual value), and Forest Renewal and Forestry Futures (including Forest Resource Inventory) charges, for forest biofibre will be set at a level that provides an incentive to develop new opportunities from the use of this under utilized forest resource. Forest Renewal and Forestry Futures charges will be applicable to merchantable material in accordance with the CFSA, the Scaling Manual and associated direction. MNR will monitor the existing and developing markets for forest biofibre. This pricing strategy will help support the growth of new and existing industry using forest biofibre. FOR May 15, 2013 Page 5 of 6

6 POLICY REVIEW This policy will be reviewed within five years. Recognizing the evolving and dynamic nature of the bioenergy and bioproducts sectors, MNR s ongoing monitoring efforts and adaptive management approach will be used to ensure that objectives and needs continue to be well served. FOR May 15, 2013 Page 6 of 6

Ontario s s Forest Biofibre - Exploring the Potential

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