Carbon Management and Sustainability The Canadian Experience in a Global Context. Tom Rosser Natural Resources Canada May 3, 2010

Transcription

1 Carbon Management and Sustainability The Canadian Experience in a Global Context Tom Rosser Natural Resources Canada May 3, 2010

2 Outline Industry Situation and Path Forward Climate Policy and Industry Renewal Climate Policy and Industry Renewal Forests, Forest Products and Sustainability: Perceptions, Image and Reality

3 Context: Challenges in Canada s Forest Sector Structural challenges Decline in demand for some traditional products Entrance of new low-cost global competitors Canadian dollar appreciation and volatility Increasing input costs Short-term challenges Global recession and US housing downturn Credit/capital availability Low commodity prices AFMTC, BCAP kg per capita North American Newsprint Consumption Year /05/2010 3

4 A Mix of Traditional and Emerging Products Offer a More Promising Future 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Pellets East small Newsprint Small ethanol and lignin OSL Power Direct NBHK + H&P Small BCTMP + H&P Medium Ethanol and lignin Demo Particle Board Pellets West small Biocarbon West Small NBHK + H&P Medium Syngas for lime kiln Pellets West medium Lignol Commercial LWC Ethanol Commercial Brownfield OSB small NBHK + H&P Large NBSK + Ethanol + H&P NBSK + H&P Small MDF Torrefied Pellets West SPF East small OSB medium Pellets East large NBSK + H&P Medium OSB large NBSK + H&P Large LVL Small SPF West medium Gasification - Syngas dryer SPF East medium SPF East large SPF West large Full Fractionation LVL large Pyrolysis Stand-alone Gasification CHP small (<10Mw) Biocarbon East Small Pellets East medium Torrefied Pellets East ROCE Traditional + Emerging Technologies Earning Their Cost of Capital Ontario Cost of Capital = 11% 4

5 Investing beyond energy: Example of a forest sector biorefinery FEEDSTOCKS Forest Residues C&D Waste Disturbances Dedicated Plantations Co-Gen, District Heating & Pellets 1 st Gen Fuels Ethanol Biodiesel Current Funding Programs BIOREFINERY 2 nd Gen Fuels Cellulosic Ethanol Renewable Diesel High-Value Co- Products Chemicals Materials Traditional Products P&P Wood Value chain Advanced Products Range of value-added added co-products 5

6 Climate Policy and Industry Renewal Climate, renewable energy policy a key driver of biorefining opportunities worldwide Carbon Pricing can be material to the economics of many emerging opportunities Rising energy prices & other policies can make some opportunities attractive even without an emissions price

7 Climate Change and Forest Resources Biofuels and Biorefining will increase demand for wood fibre Growing demand for agricultural products will compete for land base Changing climate likely to increase yield & disturbances

8 Putting a Brave Face on Climate Policy

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10 Comparison of Wall Assemblies Image from FPInnovations

11 Background: Summary of Copenhagen Outcomes Copenhagen outcomes A lot of progress but more time is needed: agreed to continue with negotiations to reach agreement in late 2010 While arcane and technical, negotiations on forests significant to industry from regulatory, market reputation standpoint.

12 Forests in the Negotiations Forests included in negotiations on land use, land-use change and forestry (LULUCF) Forests included in negotiations on reducing emissions from deforestation and forest degradation (REDD)

13 Climate Change is Shifting the Market Debate on Sustainability Issues

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15 Conclusions Despite remaining uncertainties, climate change is reshaping the forest sector Energy and environmental polices combined with technological innovation are creating significant new market opportunities in non-traditional products areas Growing public preoccupation with climate change presents an opportunity to rebrand the sector and its products. Global regime critical not just to regulatory framework but also to market reputations issues