The federal government kicked off 2011 with announcements of $278 million in pulp mill subsidies from the Green Transformation Fund. The grants for mills in British Columbia, Alberta, Quebec, and New Brunswick push the disbursement of the allocated one billion dollars in pulp mill black liquor subsidies to $591 million.
The Fund was created in June of 2009 in response to US subsidies of pulp mills based on their usage of the pulp mill by-product, black liquor, as fuel – a standard practice in kraft pulp mills. [See “Greed and Black Liquor Fuel Pulp Trade Wars,” November 2009, and www.millwatch.ca formore information.]
While the enormous injection of capital funds to pulp mills for environmental projects is run by the federal government, environmental regulation of pulp mills is in the hands of the provinces. There is, therefore, no formal relationship between project proposals submitted by the mills to the federal fund and the priorities of the regulators and the communities of which the mills are a part.
Hundreds of millions have thus far been awarded in order to facilitate the sale of power by pulp mills back to the grid. BC Hydro has already signed a number of contracts with forestry companies for power provision and is actively organizing pulp mills to line up for the federal funding in order to fulfil its own call for “bioenergy”– energy that can be generated using wood waste, forest-based biomass, and organic material.
Provincial environmental authorities have not been as quick to help direct the funding to their own priorities, however. With the project applications in the hands of the companies, and energy companies such as BC Hydro focusing the projects, mills are using the money not to address the highest environmental priorities but to transform themselves into bioenergy producers. Just how green the transformation is remains open to question.
According to Natural Resources Canada, the $40-million investment by the federal fund will enable Castlegar’s Celgar kraft pulp mill to generate “clean, green energy from forest biomass…to meet its own needs and supply some energy to the BC grid.”
Similarly, $36.7 million in funding was awarded to the Howe Sound Pulp and Paper mill from the Green Transformation Program fund, along with other funds and support from BC Hydro, to invest in technology that will increase its capacity to burn wood waste. The power will be sold back to the grid under a purchase agreement with BC Hydro.
The carbon accounting involved in forest biomass incineration for power production is complicated; it is by no means universally agreed to be carbonneutral. The Howe Sound example, however, is of particular concern since the Port Mellon mill is one of the only mills in the province that is allowed to burn construction and demolition waste under a temporary variance to its air permit. The waste contains plastics, fabric, and formica, as well as treated and untreated wood products.
The result is not only a revolution in the mill’s business model, but a shift in the fuel mix for British Columbia towards waste incineration. Howe Sound has submitted an amendment application to the province to permanently permit up to 20% demolition and construction waste as fuel for the power boiler that will be generating the energy to be sold to BC Hydro.
Energy production from resources considered re newable by governments and energy companies, such as biomass and waste derived fuel, is something for which pulp mills have the basic infrastructure in place. Federal subsidies to upgrade the facilities, along with incentives from power companies and lucrative sales contracts for power, promise to turn things around for the economics of running a pulp mill in Canada.
The environmental cost of shifting to waste incineration, however, bears close examination. The burning of plastics is a well known contributor to airborne toxins such as dioxins and furans – some of the most toxic chemicals known. Coastal mills are already high producers of the deadly toxins due to the burning of salt-laden hog fuel. Increasing the fuel mix to “wood waste” containing plastics and chemical-laden wood products is not green, clean, or renewable.