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1
1
INTRODUCTION FOR ANALYTICAL OVERVIEW
3
2
2.1
2.2
2.3
2.4
THE PRODUCT RANGE
Bleached kraft pulp
Copy paper
White-lined chipboard
Sub Grades versus Main Grades
4
5
7
8
9
3
STRUCTURE AND PERFORMANCE
3.1 Capacity Distribution
3.1.1 Bleached kraft pulp
3.1.2 Uncoated woodfree paper
3.1.3 White-lined chipboard
3.2 Production Costs
3.2.1 Bleached kraft pulp
3.2.2 Copy paper
3.2.3 White-lined chipboard
3.3 Technical Age
3.3.1 Bleached kraft pulp mills
3.3.2 Technical Age of a Paper Machine - Uncoated woodfree and white-lined
chipboard mills
3.4 Biggest Producers
3.4.1 Bleached kraft pulp
3.4.2 Uncoated woodfree papers
3.4.3 White-lined chipboard
11
11
11
13
15
17
21
24
27
29
29
4
INNOVATIONS
40
5
5.1
5.2
5.3
5.4
5.5
5.6
TRENDS
Trends in Output
Trends in Employment
Trends in Trade
Trends in Production Costs
Trends in Technology
Trends in Productivity Levels and Profitability
44
44
46
48
52
53
56
32
36
36
37
38
6
THE CURRENT ENVIRONMENTAL REGULATIONS IN EUROPEAN
COUNTRIES AND THEIR KEY COMPETITOR COUNTRIES
6.1 Introduction
6.2 EU BAT Emission Levels According To BREF Document
6.3 Comparing Legislation – EU and Other Countries
6.3.1 Regulations in Different Countries - Emissions to Water - Comparisons
6.3.2 Regulations in Different Countries - Emissions to Air - Comparisons
6.3.3 Comparisons
6.4 The Significance of Environmental Issues for the Pulp and Paper Industry
57
57
57
59
59
66
71
84
7
7.1
86
87
CONCLUSIONS FOR ANALYTICAL OVERVIEW – THE SWOTS
Bleached Kraft Pulp
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7.2
7.3
Copy Paper
White-lined Chipboard
89
91
8
THE ENVIRONMENTAL REGULATION ARISING FROM IPPC
93
9
9.1
9.2
BASIC COSTS FOR INDIVIDUAL BAT MEASURES
Bleached kraft pulp
Copy paper and WLC board
97
97
101
10
COST OF COMPLIANCE
10.1 Factors Influencing the Cost of Compliance and Competitiveness
10.2 Strategic Impact of BAT Investments
10.3 Sample Analysis and Methodology
10.4 Results
10.4.1 Bleached Kraft Pulp
10.4.2 Copy Paper
10.4.3 White-lined Chipboard
10.5 Cost Impact of BAT Investments
10.6 Conclusions for Strategic Impacts and the Costs of Compliance
105
105
109
112
112
112
121
126
131
133
11
DIFFERENT PERSPECTIVES
11.1 Hop, Skip, Step or Jump?
11.2 Endangered Species
11.3 Hot Spot Analysis
135
135
136
139
APPENDIX 1
APPENDIX 2
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1
INTRODUCTION FOR ANALYTICAL OVERVIEW
In examining the impact of BAT and analogous legislation on the global
competitiveness of the European pulp, paper and paperboard industry, a
relevant and necessary precondition is a sufficient understanding of the
industry structure. To this end, the following report aims to give a view farreaching enough in its coverage to provide the foundation for things to
come. The fact that the view given is very similar to that in a report done
for former DG III as a background work for the “Communication on the
Competitiveness of the European Forest-Based Industries” is not a
coincidence. Giving a different view would be both erroneous and without a
logical basis.
Figure below gives the process behind the analytical overview.
Figure 1-1
Comparisons / Technical
•Technology: level and age
•Productivity
•Innovation
•R & D
Comparison /
Environmental
•Regulations
•Performance
•Certification
•Training
•BAT
•Raw materials
•Energy
•Technology
International
Comparison
Intra-EU
Comparison
•Environmental
regulations
T
R
E
N
D
S
•Environmental
performance
•Costs /
economies /
investments
•Other
performance
Comparison / Economic
•Employment
•Trade
•Costs
•Economic performance
•Investments
OVERALL RESULTS:
! Conclusions
! Recommendations
! Regulatory benchmark
! Case studies
GRADE
SWOTS
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2
THE PRODUCT RANGE
In 1998 a total of 301.8 million tons paper and board was produced
globally. The structure of the world’s paper and board industry’s production
comprises a variety of different paper grades. Corrugating materials
followed by woodfree uncoated have the largest share in this product
palette.
Figure 2-1
Production of Paper and Board in the World by Main Grades
Other paper and board
10 %
Newsprint 12 %
Wood-containing uncoated
4%
Wood-containing coated
5%
Cartonboards
11 %
Woodfree coated 7%
Corrugating material
28 %
Woodfree uncoated
15 %
Sack kraft
2%
Tissue 6 %
Paper and board are often produced from a wide mix of different fibres. The
main fibrous raw materials used are recovered paper and kraft pulp,
followed by mechanical pulp and non-wood pulps. The share of bleached
kraft pulp is over 20 % of all paper and board making fibre, both globally
and in Western Europe. Kraft pulp is produced either from hardwood or
softwood. Acacia, birch and aspen are examples of hardwood whereas pine
and spruce are softwood species. The picture below shows their shares of
the total fibrous raw materials used in the world’s paper and board
production.
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Figure 2-2
Main Fibrous Raw Materials Used in the World’s Paper and Board Production
Bleached Sulphite 2 %
Semi-mechanical 2 %
Unbleached Sulphite <1%
Non-wood
6%
Unbleached
Kraft Pulp
10 %
Mechanical Pulp
11 %
Recovered Paper
43 %
Bleached
Softwood
Kraft Pulp
11 %
Bleached Hardwood
Kraft Pulp 14 %
The production of pulp, paper and board is not geographically evenly
distributed. This can be explained by the fact that North America and
Western Europe are the largest consumers of paper per capita in the world.
Raw material resources, industrial history and technological knowledge and
development determine the paper grades produced.
2.1
Bleached kraft pulp
Owing to its large forest resources North America is today the biggest
producer of market pulp. USA and Canada are the biggest exporters of
bleached market kraft pulp. In Europe, Finland and Sweden are by far the
most important kraft pulp providers. Japan, Brazil and Indonesia also have
an important role in the global market pulp business.
Table 2-1
Production of Bleached Kraft Pulp in 1998
Total
Total
1998
Bleached
Bleached
Softwood
Hardwood
-1000 tonsPulp
Pulp
Bleached
Softwood
Market Pulp
Bleached
Hardwood
Market Pulp
Western
Europe
7600
7542
3910
3924
World total
35066
43863
18831
15454
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Figure 2-3
Main Producer Countries of Bleached Kraft Pulp and Bleached Market Kraft Pulp
Bleached Market Kraft Pulp
Bleached Kraft Pulp
Others
Others
USA
Canada
17%
20%
37%
Sweden 6%
Portugal
Chile
27%
3%
4%
Finland 5%
6%
Brazil
6%
8%
Finland
10%
14%
Indonesia
Sweden
Japan
Canada
20%
8%
9%
Brazil
USA
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2.2
Copy paper
In 1998 12.7 million tons of copy paper was produced in the world. The
production of copy paper in Western Europe totalled 3.5 million tons. USA
is by far the most important provider and user per capita of copy paper in
the world. Japan and the rest of Asia have, however, also an important
production capacity. In the European Union copy paper is produced in
several different countries. Finland followed by Sweden and France is the
most important player on this continent.
Figure 2-4
Main Producer Countries of Uncoated Woodfree Paper
Uncoated woodfree total
Copy paper
Others
USA
Others
26%
3%
3%
Canada
3%
Germany
3%
3%
Indonesia
4%
8%
Finland
Brazil
Japan
Germany
30%
1%
Sweden
Finland
France
37%
4%
6%
France
17%
USA
18%
4%
4%
Brazil
9%
17%
China
Asia
Japan
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2.3
White-lined chipboard
The top producing country of cartonboard in the world is the USA. On the
whole the capacity is widely distributed among a large number of countries.
China, Japan, Germany, Finland, Sweden and Indonesia also play an
important role in the cartonboard business.
White-lined chipboard is produced in several countries and there seems to
be no clear market leader. USA, although a world leader in cartonboard
production, does not have an important WLC production capacity, having
chosen to concentrate on virgin fibre products. With a rapidly growing
recovery rate, this implies a change to come in the future. The global
production of white-lined chipboard totalled 13 million tons in 1998 and the
Western European share of it was 3 million tons.
Figure 2-5
Main Producer Countries of Cartonboard
Cartonboard total
White-lined chipboard
USA
Japan
Others
7%
Others
29%
7%
38%
55%
SouthKorea
6% Indonesia
6%
7%
China
7%
4%
5% 5% 6%
Indonesia
Japan
Sweden
Germany
Finland
Taiwan
5% Germany
4%
USA
Italy
China Brazil 4%
3%
4%
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2.4
Sub Grades versus Main Grades
Figure 2-6 shows the share of the studied sub grades of their main grades.
The main fibrous raw materials used in paper and board production are
recovered paper and kraft pulp, followed by mechanical pulp and non-wood
pulps. The share of bleached kraft pulp is over 20 % of all paper and board
making fibre, both globally and in Western Europe.
End use patterns for uncoated woodfree papers vary from envelopes, books
and forms to cut size copy papers. The fast growing communications and
office technology particularly in industrialised countries has resulted in
increased demand for copying, computer print-outs and business forms
paper. In Western Europe, the share of cut size papers is 40 % of all
uncoated woodfree papers.
Figure 2-6
The Share of Studied Sub Grades within their Main Grades
World
BKP
Western Europe
Copy
Other UWF
WLC
0
BKP
Other papermaking fibre
Other cartonboard
20
40
60
80
100
0
Other papermaking fibre
Copy
Other UWF
WLC
Other cartonboard
20
40
60
80
100 %
White-lined chipboard (WLC) is a sub grade of cartonboards. Multi-ply
boards based on recycled fibre, kraft pulp or mechanical pulp dominate the
cartonboard markets. The most common cartonboard sub grades are solid
bleached sulphate board (SBS), folding boxboard (FBB), coated unbleached
kraftboard (CUK), liquid packaging board (LPB) and white-lined chipboard
(coated recycled boxboard, CRB).
There is an overlap in most of cartonboard end uses. This is especially the
case for frozen food and most of the non-food end uses where all the grades
are used. The overlapping between WLC and SBS is limited, but FBB
competes with both SBS and WLC. CUK is primarily used as carrier board
for beverage packaging. However, it has been increasingly used also for
other applications, and thus it now competes in folding carton applications
with SBS, FBB and WLC.
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The main strength of WLC against the other cartonboard grades is its
cheaper price. In purity, an important property of food packaging, it is in
weaker position compared to SBS and CUK. Due to its price/quality
properties, WLC is the main cartonboard grade in packaging of detergents,
household electrics and dry food. Figure 2-7 below shows the substitution
trends in cartonboard markets.
Figure 2-7
Substitution Trends In Cartonboard Markets
direction of substitution
High
Cup stock
Liquid
packaging
LPB
Bristols
Coated
freesheet
(graphical applications)
Solid
bleached
board, SBS
Price level
Folding
boxboard
FBB
White-lined
chipboard,
WLC Ctd
recycled
Non lined
Greyboard
Low
Small flute
CUK
Plastics
Coated unbleached kraft
Purity
High
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3
STRUCTURE AND PERFORMANCE
3.1
Capacity Distribution
The six figures below show the potential machine/mill capacity distribution
in competing regions. The potential machine capacity is not equivalent to
the allocated machine capacity or the production.
The structure of the industry varies between countries and continents. There
are also fairly large differences in a particular country between the different
paper grades. The age of capital equipment, capacity, raw material base,
technical capabilities, export/import potential, country or company specific
historical reasons and many other factors have played a role in determining
the present structure of the pulp and paper industry around the world.
In addition to the structural differences found between the industries of
different countries and between different grades, there are also large
differences within a particular country and within a particular grade, even
between periods of good demand. Other examples of such differences in
performance can be found in the following chapters.
3.1.1
Bleached kraft pulp
In bleached kraft pulp, the largest and newest mills in Europe are in the
Nordic countries and Portugal. Although mills are largely integrated, some
of the integration is not on site. In North America the structure is similar to
that in Europe but on the US side, with even more integration on site and/or
concentrating sales on the large domestic market. Canadian mills have been
built for market pulp sales. Eastern Europe has very old and small mills
with very few exceptions.
Both Indonesia and Brazil have developed in recent years a modern and
efficient pulp industry, based mostly on the fast-growing hardwood
plantations. Several of the new large mills target their production for export
markets.
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Figure 3-1
The Size Distribution of Bleached Kraft Pulp Mills in Europe and Competing Regions
(capacity thousands of tons)
Capacity
Capacity
32
7
1200
12000
North America
10000
30
19
14
8000
800
6000
600
19
4000
Eastern Europe
2
1000
1
2
12
400
200
2000
8
0
0
< 100 100-199 200-299 300-399 400-499 > 500
Capacity distribution 6000
0
Western Europe
5000
Capacity
4000
Capacity
11
11
3000
< 100 100-199 200-299 300-399 400-499 > 500
Capacity distribution
10
15
15
6
6
2000
7
7
1000
0
Capacity
3500
Indonesia
3000
4
4
< 100 100-199 200-299 300-399 400-499 > 500
3000
Capacity distribution
3
2500
3
Brazil
2500
Capacity 2000
2000
2
1000
500
0
4
1500
1500
2
2
0
0
< 100 100-199200-299 300-399 400-499 > 500
Capacity distribution
1000
500
0
2
3
1
1
< 100 100-199 200-299 300-399 400-499
Capacity distribution
> 500
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Figure 3-2
The Size Distribution of Bleached Kraft Pulp Mills in Western Europe (capacity thousands
of tons)
Nordic
7000
10
KRAFT
6000
5000
1000 tons
4000
9
3000
4
2000
1000
4
5
3
0
<100 100-199 200-299 300-399 400-499 >500
Capacity distribution
Southern Europe
Central Europe
600
1600
2
5
1400
500
1200
400
300
4
1000
1
800
600
200
2
3
400
100
0
200
<100 100-199 200-299 300-399 400-499 >500
Capacity distribution
3.1.2
1
0 <100 100-199 200-299 300-399 400-499 >500
Capacity distribution
Uncoated woodfree paper
Uncoated woodfree paper uses proportionally more and more hardwood
pulp in its furnish. The largest machines are therefore located close to
sufficient hardwood pulp resources. Converting the paper in reels into copy
paper sheets is often done in separate sheeting plants, closer to the
consumers. Many of those sheeting operations in Europe are located in/near
ports where the jumbo reels are delivered from the Nordic countries, North
America or Latin America.
North America has several new large machines but a lot of the capacity in
sheets comes from mills, which are quite old and small. From the large new
mills production in jumbo reels can be exported for sheeting closer to the
consuming centres. The same applies to Europe where new large machines
in the Nordic area, Germany and Portugal are clearly outweighed in number
by small-sized machines in Continental Europe and the UK. This
distribution is partly explained by the machines producing speciality grades
where demand is not sufficient for very large and often inflexible machines.
Eastern European machines are very small and outdated. Brazil has both
large and small machines. Indonesia has invested heavily in uncoated
woodfree paper in recent years and has, on average the largest machines in
the world.
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Figure 3-3
The Size Distribution of Paper Machines Producing Uncoated Woodfree Paper in Europe
and Competing Regions (capacity thousands of tons)
Capacity
4000
Capacity 135
13
159
3500
1400
North America
45
1200
3000
2500
10
2000
Eastern Europe
13
1000
18
800
7
600
1500
3
2
1
400
1000
200
500
0
< 50
Western Europe
3500
Capacity3000
248
0
0
50-99 100-149 150-199 200-249 > 250
Capacity distribution
4000
< 50
50-99
100-149 150-199 200-249 > 250
Capacity distribution
10
41
2500
11
2000
7
1500
9
1000
500
0
Capacity
< 50
3
1200
Indonesia
1000
3
800
600
2
26
3
400
200
0
0
< 50
50-99
100-149 150-199 200-249 > 250
Capacity distribution
50-99 100-149 150-199 200-249 > 250
Capacity
Capacity distribution
900
800
700
600
30
500
400
300
200
100
0
7
Brazil
2
1
3
0
< 50
50-99 100-149 150-199 200-249 > 250
Capacity distribution
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Figure 3-4
The Size Distribution of Paper Machines Producing Uncoated Woodfree in Western Europe
(capacity thousands of tons)
Nordic
1200
4
1000
5
4
800
1000 tons
600
400
15
3
200
0
< 50
1
50-99 100-149 150-199 200-249
250-
Capacity distribution
Central Europe
2000
1800
1600 114
1400
16
1200
1000
800
3
5
3
600
400
200
0 < 50
50-99 100-149 150-199 200-249
Capacity distribution
3.1.3
Southern Europe
3
250-
2000
1800
1600
1400
1200
1000
800
600
400
200
0
119
22
3
3
3
0
< 50
50-99 100-149 150-199 200-249
250-
Capacity distribution
White-lined chipboard
White-lined chipboard is an emerging export product. As so far the
production has been more local and sometimes restricted by the availability
of raw material at a competitive cost (large mills may need to collect the
recovered fibre raw material over long distances), the average size of a
WLC mill is clearly below other bleached carton boards.
Western Europe has, on average, the largest machines with a lot of trade
within Europe and also exports outside Europe. North American capacity is
likely to grow both in machine and absolute size now that the recovered
paper collection rates have risen fairly close to (but by no means equalling)
European levels and a lot of the potential raw material is being exported
outside the continent.
Eastern Europe has a fairly large number of mills but they are either
medium-size or small. Both Brazil and Indonesia have one large machine
and a number of very small ones.
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Figure 3-5
The Size Distribution of Board Machines Producing White-lined Chipboard in Europe and
Competing Regions (capacity thousands of tons)
Capacity
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Capacity
800
North America
31
Eastern Europe
700
7
9
600
500
39
400
300
6
200
2
< 50
50-99
100-149
150-199
Capacity distribution
1400
17
100
0
0
0
> 200
< 50
0
50-99
100-149 150-199
Capacity distribution
> 200
Western Europe
1200
1000
Capacity
19
10
800
5
600
24
400
2
200
0
< 50
50-99
100-149 150-199
> 200
Capacity distribution
Capacity
Capacity
400
250
Indonesia
350
14
300
200
250
Brazil
27
1
150
200
100
1
150
100
50
1
50
0
< 50
1
0
1
0
0
50-99
100-149
150-199
Capacity distribution
0
> 200
< 50
50-99
100-149 150-199
Capacity distribution
> 200
Figure 3-6
The Size Distribution of Machines Producing White-Lined Chipboard in Western Europe
(capacity thousands of tons)
1000 tons
Southern Europe
Central Europe + Nordic
800
800
6
700
600
3
7
500
2
600
500
400
400
300
300
200
4
19
2
200
5
100
0
12
700
100
< 50
50-99
100-149
150-199
Capacity distribution
200-249
0
< 50
50-99
100-149
Capacity distribution
150-199
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3.2
Production Costs
Making straightforward comparisons between the production costs in a
meaningful way is very difficult. Risks of misinterpretation are high and
drawing wrong conclusions, due to the absence of sufficient background
information, can be harmful to the validity of this or any report.
Some risks of misinterpretation are obvious also looking at the attached
data on production costs of hardwood and softwood kraft pulp, copy paper
and WLC in different countries/regions. At least the following points need
to be born in mind:
•
Number of studied mills varies by country/region; the larger the
number, the greater the possibility for wider cost ranges
•
Exchange rates play a major role; during the years taken into
consideration (1996-1999) USD and CAD were overvalued against their
historical performance or against their purchasing power parity. Asian
currencies, Indonesian Rupee in particular, went through a major
devaluation during the Asian Crisis
•
Many of the mills produce, in addition to the “benchmark” grade
studied here, specialty products. This tends to lower the production
volumes compared to what they would be with just one bulk grade.
Particularly fixed costs tend to go up. This does not necessarily mean
poor profitability, since the average selling price differential may well
compensate for the higher costs.
•
Mill size and age vary considerably from one region to another. New,
effective mills tend to have high capital costs. Therefore, particularly
those graphs where production costs without capital charges are studied,
can be misleading
•
Although the costs/cost ranges given here have been calculated with as
similar methodology as possible, different reporting and book-keeping
practices and different rules/laws on the depreciation possibilities may
impact the cost comparisons, particularly on capital cost sector
•
Integration plays a role both in the general level of the costs as well as
in the distribution of the costs. Some of the elements are impossible to
show on an even footing. E.g. high fiber costs at those European mills
which need to buy all of their pulp from outside, get compensation, in
relation to their integrated competitors in the Nordic area or those
outside Europe, in the form of substantially lower delivery costs for the
paper/paperboard produced.
Summarizing, the cost figures in the tables and graphs, which follow, give a
good indication of the level and the ranges of the different cost items and of
the total production costs in different countries/regions. They should not,
however, be seen as a precise, definite answer, due to the factors listed
above.
52A2965A
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Following technical explanatory features are valuable to know when
interpreting the data:
•
Minimum and maximum values on production cost bar charts are
theoretical. They have been calculated by adding minimum values for
each cost item (fiber, chemical, energy etc.) together. Thus they show
how low or high costs could be if all the least expensive or most
expensive cost items were found at the same mill. In practice, the cost
structures are more evenly divided.
•
Furthermore, the bar charts do not include capital. Often the lowest
production costs are coupled with high capital costs.
•
In order to give a typical range in which production costs are at different
mills in different countries/regions for each of the selected grades, short
two-tailed arrows have been added behind the average cost bar on each
of the figures. The data for these arrows have been chosen, not by
adding together individual cost items but by using the production costs
(excluding capital) at actual mills.
•
The impact of integration is difficult to isolate from the cost data. For
those costs, which are compared here for non-integrated mills, this
isolation has been attempted in order to make the data comparable.
•
Many copy paper producers run today grades, which can be based either
on chemical pulp or a mix of both recovered paper and chemical pulp.
Again, isolating the costs for just chemical pulp based product has been
difficult but has been attempted in order to make the data as comparable
as possible.
•
In some copy paper mills (as well as WLC facilities) with converting
operations, the packaging costs obtained from the mills include
packaging also for the converted part of the production. Our best
estimates have been used to clean the data, whenever the data are
suspected to include these or other elements that distort the
comparability.
•
The currency conversion factors used represent the average of the years
1996-1999 and are as follows:
52A2965A
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Table 3-1
Exchange Rates as National Currency per ECU/Euro
Euro/ECU
1996
1997
1998
Austria,
ATS*
Brazil,
BRL
Canada,
CAD
China,
CNY
Finland,
FIM*
France,
FRF*
Germany,
DEM
Indonesia,
IDR
Italy,
ITL*
Portugal,
PTE*
South Korea,
KRW
Spain,
ESP*
Sweden,
SEK
Thailand,
THB
USA,
USD
1999
I/2000
13.4234
13.8403
13.8648
13.7603*
1.2578
1.2182
1.3032
1.9270
1.7511
1.7067
1.5652
1.6662
1.5839
1.4339
10.4092
9.3752
9.2929
8.8246
8.1751
5.8245
5.8874
5.9855
5.9457*
6.4928
6.6122
6.6015
6.5596*
1.9096
1.9642
1.9692
1.9558*
2913.7897
3259.9872
11306.4551
8354.3663
1958.6000
1929.7000
1943.7000
1936.2700*
193.1800
197.9600
201.9900
200.4820*
1007.4829
1076.1594
1566.0482
1267.9549
158.6182
165.3915
167.4876
166.3860*
8.5156
8.6551
8.9085
8.8076
8.5006
31.7352
35.0073
46.1079
40.3097
37.1640
1.2680
1.1341
1.1200
1.0668
0.9872
* fixed conversion rate since 1.1.1999
7260.7445
1110.6824
52A2965A
20
Table 3-2
Exchange Rates as National Currency per USD
USD
1996
1997
1998
1999
I/2000
Austria,
13.9346
12.9171
12.3790
12.2040
10.5870
ATS*
Brazil,
BRL
1.0050
1.0780
1.1610
1.8150
1.7730
Canada,
CAD
1.3635
1.3846
1.4835
1.4857
1.4535
China,
CNY
8.3142
8.2898
8.2790
8.2783
8.2786
Finland,
FIM*
4.5936
5.1914
5.3441
5.58137
6.0211
France,
FRF*
5.1155
5.8367
5.8995
6.1576
6.6427
Germany,
DEM
1.5048
1.7341
1.7597
1.8360
1.9806
Indonesia,
IDR
2342.3000 2909.4000 10013.6000 7855.2000 7390.9000
Italy,
ITL*
1542.9000 1703.1000
1736.2000 1817.6158 1960.7978
Portugal,
PTE*
154.2400
175.3100
180.1000
188.1965
203.0217
South Korea,
KRW
804.4500
951.2900
1401.4400 1188.8200 1125.1200
Spain,
ESP*
126.6600
146.4100
149.4000
156.1899
168.4937
Sweden,
SEK
6.7060
7.649
7.9499
8.2624
8.6079
Thailand,
THB
23.3430
31.3640
41.3590
37.8440
37.6520
Euro/
ECU
0.7886
0.8818
0.8929
0.9386
1.0136
In some of the countries (e.g. Brazil or Indonesia) the costs are often given directly
in USD.
•
Production cost graphs include variable and fixed production costs
without appreciation or capital charges. In tables on total cost ranges,
also capital costs have been included
•
Some countries chosen for the survey have only one company/mill
producing a chosen grade. For confidentiality reasons, such mills have
not been included into the comparisons or, if they have, they have been
included within the region rather than under a country title.
•
Small spread of the ranges may be the result of limited number of mills
studied or similarity of the raw material/mill (machine) size or
coincidence.
•
As mills with high capital costs tend to have low production costs and
vice versa, the ranges on production costs without capital and those with
capital do not necessarily coincide.
52A2965A
21
3.2.1
•
Reporting on capital costs and their calculation varies between countries
or even between companies/mill within the same country. E.g. in North
America depreciation is usually given as fixed production cost, whilst in
Europe it is usually given as part of the capital costs. Interest on own
capital is sometimes included, sometimes not. Costs of forest
management (ownership of forests, plantations, nurseries etc.) are
sometimes included in the capital costs, sometimes divided into wood
costs. Depreciation may be the number allowed by the legislation or the
practical depreciation used for a particular year. Costs per ton may be
calculated against capacity or against the practical production of a given
year. In the following tables a serious attempt has been made to treat the
cost items in a uniform manner but some differences may still exist.
•
In the following charts the ones with vertical columns (e.g. 3-8) exclude
capital costs, including depreciation. Those with horizontal bars (e.g. 39) include all production and capital costs, excluding, however, freight.
In comparing the competitiveness in a given market, freight costs to that
market would need to be added. Those costs are, naturally highly mill
specific, depending on the location and on delivery logistics between
the point of supply and point of delivery.
•
A final comment refers to the price of the product. In the graphs
production costs are compared by main grade. However, the price of
different products varies within the same main grade. Hardwood pulp
from Finland or Sweden, based on birch wood, draws a better price on
the market than e.g. mixed tropical hardwood pulp from Indonesia. Or
mixed southern hardwood pulp from the US South. This is another
reason for not drawing too far-reaching conclusions from the following
graphs on the competitiveness between different regions.
Bleached kraft pulp
Lowest production costs (before capital charges) are found at the new
Brazilian or Other World (mainly Indonesia) mills. These mills tend to
have, on the other hand, some of the highest capital costs.
Iberian mills have high wood costs/unit but the high yield of the eucalyptus
species there brings the wood costs/ton down.
Present (year 2000) exchange rates improve the position of the European
mills compared to those in North America, USA in particular.
52A2965A
22
Figure 3-7
Hardwood Kraft Pulp Production Costs (theoretical) in Selected European Countries
Euro/ADt in 1996-1999
Materials
Personnel
Energy
Chemicals
Wood
500
Euro /
Adt
450
400
350
300
= average
cost range
250
200
150
100
50
0
x
x
x
x
g
g
g
g
in
in
in
in
m a v ma
m a v ma
m a v ma
m av ma
E
E
A
T
N
A
T
N
E
T
A
FI FI FIN
SP SP SP
PR PR PR
SW SW SW
For an explanation on these figures and subsequent similar figures see page 17.
Figure 3-8
Hardwood Kraft Pulp Production Costs (theoretical) in Selected non-European Countries
Euro/ADt in 1996-1999
Materials
Personnel
Energy
Chemicals
Wood
500
Euro /
Adt
450
400
350
= average
cost range
300
250
200
150
100
50
0
A
BR
m
in avg
ax
m
A
A
BR BR
N
CA
m
in avg
ax
m
N
N
CA CA
A
US
m
in avg
ax
A SA m
S
U
U
52A2965A
23
Figure 3-9
Hardwood Kraft Pulp Total Costs Euro/ADt in 1996-1999 (including capital costs)
Country/ cost €
100-149
150-199
200-249
250-299
Brazil
165-283
Canada
205-267
300-349
250-327
Spain
230-311
Sweden
165-327
USA
165-314
World
450-499
500-549
550-599 600-649
650-699
403-525
268-391
235-322
Portugal
400-449
284-402
205-322
Finland
350-399
392-515
323-441
442-560
323-411
412-500
407-485
328-406
312-392
393-475
328-491
315-484
492-655
485-655
NOTE: Scale 100-700,
lines every 50 €
US pulp is sold at a lower price than the Nordic or Canadian softwood kraft
pulps.
At many Canadian mills, wood chip costs are tied to the price obtained for
pulp. This lowered Canadian wood costs in the period 1997-1999 used for
the cost survey.
Present (year 2000) exchange rates improve the position of the European
mills compared to those in North America, USA in particular.
52A2965A
24
Figure 3-10
Softwood Kraft Pulp Production Costs (theoretical) in Selected Countries EURO/ADt in
1996-1999
Materials
Personnel
Energy
Chemicals
Wood
600
Euro /
Adt
500
400
= average
cost range
300
200
100
0
x
x
g ax
g ax
g
g
in
in
in
in
m av
m av
m av ma
m a v ma
E WE E m
N FIN IN m
A
N
A
N
A
N
I
F
F
US US US
CA CA CA
SW S SW
Figure 3-11
Softwood Kraft Pulp Total Costs Euro/ADt in 1996-1999 (including capital costs)
Country/cost €
100-149
150-199
200-249
250-299
300-349
250-339
Canada
270-366
Finland
265-389
Sweden
USA
205-369
World
205-342
350-399
400-449
450-499
500-549
340-514
367-462
390-514
370-534
343-521
550-599 600-649
650-699
515-690
463-560
515-640
535-700
522-700
NOTE: Scale 100-700,
lines every 50 €
3.2.2
Copy paper
Differences in integration degree and in type of production (sheeting at
mills site vs. sheeting close to customers) make comparisons between
countries difficult. Many Nordic mills are fully integrated and have sheeting
operations close to the customers. There are also differences in the grades
produced and prices obtained. Many of the mills in Continental Europe
produce A-copy paper (vs. B- or C-copy) and/or speciality papers in
addition to copy paper. A, B and C refer to the classification categories
given to copy paper by sellers and buyers. It is based on a combination of
paper quality and service capability of the deliverer. For instance some mill
that produces copy paper of excellent quality paper may only, at best,
receive B- ranking because its location is inconvenient for the potential
buyers.
52A2965A
25
If sheeting, freight, inventory and other customer service costs were added,
differences between countries would diminish.
Figure 3-12
Copy Paper Production Costs (theoretical) in Selected European Countries Euro/ADt in
1996-1999
1400
Euro / 1200
Adt
1000
800
Other
Personnel
Packaging
Energy
Chemicals
Pulp
Wood
600
400
200
0
in g x
in g x
in g x
in g x
in avg ax
m av a
m av a
m av a
m av a
N FIN IN m WE WE E m RT RT RT m T A T A T A m RA mRA A m
I
F
I I I
F
P P P
F F FR
S S SW
= average
cost range
52A2965A
26
Figure 3-13
Copy Paper Production Costs (theoretical) in Selected non-European Countries Euro/ADt
in 1996-1999
1200
Euro /
1000
Adt
Other
Personnel
Packaging
Energy
Chemicals
Pulp
Wood
800
600
= average
cost range
400
av
x
ma
US
A
US
A
US
A
ID
N
g
mi
n
x
ma
av
g
ID
N
ID
N
BR
A
mi
n
BR
Aa
vg
BR
A
ma
x
0
mi
n
200
Figure 3-14
Copy Paper Total Costs Euro/ADt in 1996-1999 (including capital costs)
Country/€ 0-199
200-399
270-492
250-589
Sweden
300-739
250-692
NOTE: Scale 0-2000,
lines every 200 €
965-1295
1110-1485
912-1330
493-911
750-974
975-1200
590-974
545-806
USA
1185-1575
735-1109
525-749
Italy
1000-1199 1200-1399 1400-1599 1600-1799 1800-1999
635-964
360-734
France
World
800-999
795-1184
305-634
Finland
Portugal
600-799
405-794
Brazil
Indonesia
400-599
975-1360
807-1067
740-1334
693-1311
1068-1330
1335-1930
1312-1930
52A2965A
27
3.2.3
White-lined chipboard
Cost differentials are smaller than in pulp or copy paper. This is largely due
to the more homogeneous age, size and raw material structure of the mills.
The mills with highest production costs tend to be closest to the customers.
Thus, if freight costs were included, cost differentials would diminish
further.
Figure 3-15
WLC Production Costs (theoretical) in Selected European Countries Euro/ADt in 1999
600
Euro /
Adt
500
400
300
200
Other
Personnel
Packaging
Energy
Chemicals
Pulp
Wood
= average
cost range
100
0
in g x
in g x
in g x
in g x
in g x
m a v ma
m a v ma
m * a v ma
m av ma
m a v ma
*
A
A
R
A
A
R
T
T
A
A
R
T
C C *
IT IT IT
SP SP SP
DI RDI DIC
AU AU AU
GE GE GE
R
R
NO NO NO
*NOTE: In Nordic countries there is only one WLC producer. Due to this the Nordic numbers are estimates.
52A2965A
28
Figure 3-16
WLC Production Costs (theoretical) in Asia and the USA Euro/ADt in 1999
600
Other
Personnel
Packaging
Energy
Chemicals
Pulp
Wood
500
400
300
= average
cost range
200
100
x
ma
US
A
g
av
US
A
mi
n
US
A
x
ma
AS
IA
g
av
AS
IA
mi
n
0
AS
IA
Euro /
Adt
There are two different recycled folding boxboard products on the North
American market, neither identical with the European WLC product. They
are called 20 pt clay coated news (based on recycled newsprint) and 20 pt
bending chip (mainly for food industry products). Some of the mills, which
produce these products also produce SBS (Solid Bleached Sulphate Board).
Data used for the US/NA mills comparisons/ranges are derived from these
mills and, in our opinion, are comparable with the data given for the
European mills.
For Nordic countries a similar approach has been used (Figure 3-17). Since
there is only one producer of WLC the cost ranges have been calculated
with the help of folding box board (FBB) prices. The Asian mills are
include mills from Indonesia, South Korea, Taiwan, Thailand and China.
52A2965A
29
Figure 3-17
WLC Total Costs Euro/ADt in 1999 (including capital costs)
Ranges in euro
200-249
250-299
300-349
350-399
Austria
325-402
Germany
270-459
Italy
300-426
400-449
344-432
Nordic
Spain
270-389
Asia
220-429
450-499
403-481
500-549
550-599
650-699
460-649
700-749
750-799
800-849
433-520
650-840
553-680
427-552
521-610
510-630
390-509
640-849
430-639
USA
465-576
220-429
World
600-649
482-560
577-687
688-800
639-849
430-638
NOTE: Scale 200-850,
lines every 50 €
3.3
Technical Age
Technical age of a pulp mill or a paper/board machine is not a synonym to
their start up year. Rebuilds can significantly change the technical age and
consumption figures of a machine. A theoretical parameter, "technical age",
has therefore been defined. This parameter reflects the timing and nature of
any rebuilds. Several consumption figures are assumed to be functions of
technical age.
3.3.1
Bleached kraft pulp mills
The basic principle in calculation of technical age for a pulp mill is similar
to that of a paper machine, described below. Technical age increases from
the start up and is reduced by rebuilds. The pulp mill apparent age is
calculated using the timing and nature of rebuilds carried out on individual
mill departments.
For this purpose, rebuilds have been divided into three categories. The
effect of these rebuilds is described in Table 2-4.
Table 3-3
Apparent Age of a Pulp Mill
Rebuild Investment
class
Production
Description
1
15 % of replacement value
No effect
Expansion
2
30 % of replacement value
+ 10 %
Modernization
3
70 % of replacement value
+ 30 %
total rebuild
A pulp mill’s apparent age is calculated from these rebuild classifications as
follows:
52A2965A
30
Rebuild class
1 Mill Age x 0.75 + Rebuild1) x 0.25
2 Mill Age x 0.25 + Rebuild x 0.75
3 Mill Age x 0.10 + Rebuild x 0.90
1)
time elapsed from the rebuild
Figures below show technical age of bleached hardwood and softwood kraft
pulp mills. The figures cover over 95% of the market pulp producers in the
regions included in the survey.
52A2965A
31
Figure 3-18
Technical Age of Bleached Hardwood Kraft Market Pulp Mills
Note that the x- and y-axes are not the same in all the figures.
Western Europe
600
500
500
400
Capacity
Capacity
Northern America
600
Capacity
Regression
line
300
200
400
200
100
0
Capacity
Regression
line
300
100
4
8
12
16
20
24
28
0
32
4
8
Technical age
12
20
24
Brazil
1400
1000
1200
800
Capacity
Capacity
Indonesia
1200
Capacity
600
400
1000
200
0
16
Technical age
Capacity
800
600
400
200
0
2
4
6
0
8
12
8
Technical age
16
20
24
Technical age
450
450
375
375
300
Capacity
Regression
line
225
150
Capacity
Capacity
Figure 3-19
Technical Age of Western European Bleached Hardwood Kraft Pulp Mills
Nordic
Southern Europe
300
Capacity
Regression
line
225
150
75
75
0
4
8
12
16
20
0
4
8
Technical age
12
16
20
Technical age
Figure 3-20
Technical Age of Bleached Softwood Kraft Pulp Mills
Note that the x- and y-axes are not the same in the figures.
Western Europe
600
500
500
Capacity
Regression
line
400
300
200
100
0
Capacity
Capacity
Northern America
600
Capacity
Regression
line
400
300
200
100
4
8
12
16
20
24
Technical age
28
32
0
4
8
12
16
Technical age
20
52A2965A
32
3.3.2
Technical Age of a Paper Machine - Uncoated
woodfree and white-lined chipboard mills
The paper machine technical age is calculated using the timing and nature
of rebuilds carried out on individual machine sections. The paper machine
gets older linearly over time, and the technical age is assumed to be reduced
by rebuilds as shown in figure below.
Figure 3-21
Technical Age: “Rebuilds Rejuvenate Machine”
- Technical age, years -
3
2
1
1 = REBUILD 1
2 = REBUILD 2
3 = REBUILD 3
- Time from start-up, years The basic method used to evaluate the technical age of a PM is directly
based on the rebuild measures carried out. The PM is divided in functional
sections (wire, press etc.) and the scope of the rebuild on each section
determines the reduction of technical age. There are ca. 40 different
possible rebuild measures taken into account. Each rebuild measure has a
weighting coefficient and the total reduction of the technical age as a
consequence of the rebuild is calculated as shown in the equation below.
T = 1 − ((1 − x1 ) × (1 − x2 ) × K× (1 − xn ))
T = Technical age reduction
xi = Weight for single rebuild measure
n = Number of single measures
52A2965A
33
Figure below shows the estimated average relationship between technical
age reduction and investment cost.
Figure 3-22
Average Relationship between Technical Age Reduction and Investment
Cost
Technical age reduction
100 %
80 %
60 %
40 %
20 %
0%
0%
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 % 100 %
Investment per Replacement value
Figures below show technical age of uncoated woodfree paper and whitelined chipboard machines. The figures cover over 90% of the uncoated
woodfree paper and WLC machines in the regions included in the survey.
52A2965A
34
Figure 3-23
Technical Age of Uncoated Woodfree Machines
Note that the x- and y-axes are not the same in all the figures.
350
300
300
Capacity
Capacity
Northern America
350
250
200
Capacity
Regression
line
150
100
250
Capacity
Regression
line
200
150
100
50
50
0
5
10
15
20
25
30
0
Technical Age
10
Capacity
15
20
25
30
Technical age
550
500
450
400
350
300
250
200
150
100
50
Capacity
Regression
line
5
10
15
20
25
30
Technical age
Brazil
350
5
Western Europe
0
Indonesia
400
350
250
Capacity
300
Capacity
Eastern Europe
Capacity
Regression
line
200
150
100
300
Capacity
Regression
line
250
200
150
100
50
50
0
5
10
15
20
25
0
30
5
10
Technical age
15
20
25
30
Technical age
Figure 3-24
Technical Age of Western European Uncoated Woodfree Machines
Nordic
450
Capacity
375
300
Capacity
Regression
line
225
150
75
0
4
8
12
16
20
24
28
32
Technical age
Central Europe
525
375
375
Capacity
Regression
line
300
225
150
Capacity
Capacity
450
300
Capacity
Regression
line
225
150
75
75
0
Southern Europe
450
4
8
12
16
20
24
Technical age
28
32
0
0
4
8
12
16
20
Technical age
24
28
32
52A2965A
35
Figure 3-25
Technical Age of White-lined Chipboard Mills
Note that the x- and y-axes are not the same in all the figures.
Eastern Europe
180
150
150
120
Capacity
Capacity
Northern America
180
Capacity
Regression
line
90
60
120
Capacity
Regression
line
90
60
30
30
0
5
10
15
20
25
30
0
Technical age
5
10
15
20
25
30
Technical age
Western Europe
240
Capacity
210
180
Capacity
Regression
line
150
120
90
60
30
0
5
10
15
20
25
30
Brazil
Technical age
210
180
180
150
Capacity
Capacity
Indonesia
150
Capacity
Regression
line
120
90
60
120
Capacity
Regression
line
90
60
30
30
0
5
10
15
20
25
30
0
5
Technical age
10
15
20
25
30
Technical age
Figure 3-26
Technical Age of Western European White-lined chipboard Machines. Central Europe
includes also Nordic countries.
Central Europe
240
200
160
Capacity
Regression
line
120
80
40
Capacity
Capacity
200
0
5
Southern Europe
240
160
Capacity
Regression
line
120
80
40
10
15
20
Technical age
25
30
0
5
10
15
20
Technical age
25
30
52A2965A
36
3.4
Biggest Producers
The following figure illustrates the top producers of bleached kraft pulp and
their total capacities in the different regions. Producers are shown by group.
Thus, e.g. the capacity of a mill, which may be a company, but is owned
jointly by two groups, is divided between the two groups.
3.4.1
Bleached kraft pulp
Total regional bleached kraft pulp capacity includes fluff pulp but excludes
dissolving pulp.
The Nordic producers top the Western European list with mostly integrated
mills. Most of the continental European softwood pulp production,
integrated and markets, is produced by sulphite process and not included
here.
In North America, the capacities are higher than in the other regions. The
biggest producer, International Paper, has almost two times the bleached
kraft pulp capacity of the second biggest producer.
Aracruz and Arauco have largest bleached kraft pulp capacities in Latin
America.
In Asia, the capacity is located mostly in Japan and Indonesia.
52A2965A
37
Figure 3-27
Top 5 Producers of Bleached Kraft Pulp by Region
Stora Enso
International
Paper
Södra*
Georgia-Pacific
UPMKymmene
Weyerhaeuser
Metsäliitto
Champion
NORTH AMERICA
WESTERN EUROPE
Westvaco
SCA
0
0
500 1000 1500 2000 2500 3000 3500 4000 4500
- Capacity, 1 000 t/a -
Aracruz
Nippon+
Daishowa
Arauco
Oji
Suzano
Asia Pulp
& Paper
LATIN
AMERICA
Votorantim
1000
APRIL
2000
3000 4000 5000 6000
- Capacity, 1 000 t/a -
7000
ASIA
Daio Paper
CVRD
0
300
600
900
1200
- Capacity, 1 000 t/a -
1500
0
500
1000 1500 2000 2500 3000 3500 4000
- Capacity, 1 000 t/a -
* Södra includes Tofte with which it merged in 2000. In Asia the Nippon Paper Industries and
Daishowa merged resulted in the biggest pulp producer.
3.4.2
Uncoated woodfree papers
The following figure illustrates the production capacities of uncoated
woodfree papers in each region. The capacities include standard, specialty
and uncoated woodfree boards.
Producers are shown by group. Thus, e.g. the capacity of a mill, which may
be a company, but is owned jointly by two groups, is divided between the
two groups.
There are few large producers in Europe even though the total number is
close to 150. This fragmentation of the field will have an impact on the
future developments of the industry. However, many of the smaller
producers have specialised in niche products. They can often also give a
better service to their clients.
In North America, there are over 50 uncoated woodfree producers. Two of
the producers, International Paper and Georgia-Pacific, are of a very
significant size.
52A2965A
38
In South America, only the biggest 7 producers have a production capacity
of over 100 000 t/a.
There are around 400 companies with uncoated woodfree paper capacity in
Asia. The Asian Pulp and Paper Company (APP) and the company formed
by Nippon Paper and Daishowa are the large-scale producers. Most
companies have a production capacity under 50 000 t/a.
Figure 3-28
Top 5 Producers of Uncoated Woodfree Paper by Region in 2000/I
Stora
Enso
International
Paper
UPMKymmene
GeorgiaPacific
Modo Paper
Boise Cascade
International
Paper
Willamette
Western Europe
MetsäSerla
North America
Champion
0
300
600
900
- Capacity 1000 t/a -
1200
1500
0
Suzano
Asia Pulp
& Paper
Votorantim
Nippon+
Daishowa
Champion
Oji
KimberlyClark
500
APRIL
Latin
America
Ripasa
1000
1500 2000 2500
- Capacity 1000 t/a -
3000
3500
Asia
Mitsubishi
0
100
200
300
- Capacity 1000 t/a -
400
500
0
500
1000
1500
- Capacity 1000 t/a -
2000
2500
Note that Metsä-Serla has bought Modo Paper only in III/2000 thus they are presented
separately in the chart above.
3.4.3
White-lined chipboard
The following Figure illustrates the production capacities of white-lined
chipboard in Western Europe and the competing regions.
Producers are shown by group. Thus, e.g. the capacity of a mill that may be
a company, but is owned jointly by two groups, is divided between the two
groups.
Two Western-European producers, Mayer-Melnhof and Reno di Medici,
have WLC capacities of over 800 000 t/a. These two companies are clearly
the biggest WLC producers in the world. In Nordic area, there is only one
producer of WLC.
52A2965A
39
In North America, four companies have WLC production capacities around
400 000 t/a. It should be noted that there are two different recycled folding
boxboard products on the North American market, neither identical with the
European WLC product. They are called 20 pt clay coated news (based on
recycled newsprint) and 20 pt bending chip (mainly for food industry
products). Some of the mills, which produce these products, also produce
SBS (Solid Bleached Sulphate Board). Data used for the US/NA mills
comparisons/ranges are derived from these mills and, to our opinion, are
comparable with the data given for the European mills. See also Chapter 2
The product range.
The biggest WLC producer in Asia is the Korean group Hansol. It has a
larger WLC capacity than the North Americans.
In Eastern Europe and Latin America, the biggest WLC producers have
capacities around 200 000 tons.
Figure 3-29
Top 5 Producers of White-lined Chipboard by Region in 2000/I
Newark
Jefferson
Smurfit
Ponderosa
Rock-Tenn
Caraustar
Productora
de Papel
Smurfit-Stone
CMPC
NORTH AMERICA
Graphic
Packaging
0
100
200
300
400
500
- Capacity, 1 000 t/a -
LATIN
AMERICA
Sur
600
0
20
40
60
80 100 120 140 160 180 200
- Capacity, 1 000 t/a -
Mayr-Melnhof
Reno de Medici
Cascades
WESTERN EUROPE
Gruber + Weber
M. J. Weig
0
100 200 300 400 500 600 700 800 900 1000
- Capacity, 1 000 t/a -
Ukrpapirprom
Hansol
Ilim Pulp
Asia Pulp
& Paper
Stupeks
Oji
Akid
Shinpoong
EASTERN
EUROPE
Nabere
zhnochelninskij...
0
50
100
150
- Capacity, 1 000 t/a -
200
ASIA
Daehan
250
0
100
200
300 400 500 600
- Capacity, 1 000 t/a -
700
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4
INNOVATIONS
There can be no innovation case for BAT, since there is no history of
BAT/IPPC-directives. However, there are some illustrative pulp and paper
innovations to be analysed and put in the right context.
An innovation can briefly be described as something new, something that
has not existed before. There are, however, two different classes of
innovations. They can be classified as discontinuous innovations or
technology jumps and continuous innovations or improvements of
existing technology. In the pulp and paper industry today most of the
innovation activity has been concentrated on continuous innovations.
Technology jumps are rarely seen in this cost intensive industry.
In the figure below different types of product innovations are characterised.
Figure 4-1
How to Define Product Innovations
Core Competence
areas
Unchanged
Unchanged
Changed
Copy
Innovations
Modular
Innovations
Architectural
Innovations
Radical
Innovations
Connection of
different core areas
with each other
Changed
Source; Henderson & Clark’s Framework for defining product innovations
(Henderson & Clark 1990,12)Here it can be seen that innovations can further
be divided into four different sub-groups:
•
An innovation based on core competences most commonly deals
with the product. When the existing product is being improved the
innovation is called a copy innovation. This means that the new
modification does not have any influence on the core competence
52A2965A
41
area of the product. The company is still selling the same product; it
is just an improved version of the original one. Further, this product
does not have any influence on the business done in the other core
areas of the company. A new technical detail in a paper machine,
which for example increases the machine speed , is a copy
innovation.
•
An architectural innovation is one that does not change anything in
one core area but changes the way in which business is done in the
company as a whole. A new innovative marketing strategy adopted
by the company management is an example of such a manoeuvre.
The new marketing strategy brings new tactics for selling products
but it does not change the products themselves.
•
When a company innovates a new product in one of its existing core
areas this is called a modular innovation. This means that the
product is completely new for the company but the company itself is
still unchanged. For example if a completely new way of coating
paper is developed the company is able to introduce a new
technology. Still, the company remains the same in its fundamentals
and modus operandi.
•
A radical innovation changes everything. This does not only have an
impact on the core area but on the company as a whole as well as on
the whole business where the product is introduced. The personal
computer versus the typewriter is a good example of a radical
innovation. When the personal computer was introduced it did not
take long until the typewriter markets faded out.
Innovations for BAT cannot yet be characterised, since the BAT has just
been defined in the BAT BREF. The BAT BREF introduces, however,
some technologies that are assumed to be emerging BAT technologies (see
table at the end of this chapter).
Owing to the introduction of the IPPC Directive, the US Cluster Rule and
other similar legislation, market pulp and copy paper technological
development has been faced with a new challenge: cross-media control of
environmental impacts. Before, separate reduction of different effluents,
wastewater, air emissions etc. was the main concern. Many of the BAT
techniques are aimed at process-internal reduction measures, as a
counterbalance to external facilities (the usual for e.g. effluent treatment).
Emerging techniques are listed in the table below. This list is taken from the
BAT BREF.
The development of new technology is not the only factor of note when
considering future innovations. The product and its quality is in the end the
most important factor. The product development is an ongoing process.
This means that the paper products may be changing more rapidly than the
production technology. This fact makes it even more difficult to predict
52A2965A
42
which innovation will make a breakthrough. New devices such as digital
printers put higher demand on paper quality. Electronic media may change
the use of paper (electronic papers), whereas smart devices can in the future
be incorporated in papers and give them new applications (e.g. smart
packaging). Therefore, the paper grades we are dealing with today may not
be the same in the future.
What are the links between innovation and legislation? Worthy of a project
in itself. However, work done by us earlier indicates that market pressure
and product improvement rather than legislation are the sources of true
innovations in the paper industry.
52A2965A
43
Table 4-1
Emerging Technologies Classified as Possible BAT
Process
Technology
Source of Reduction of emissions
Sulphate pulping
Black liquor gasifications
Effective use of surplus electricity
Sulphate pulping
Use of SNCR on the recovery boiler
Reduction of nitrogen oxides
Sulphate pulping
Removal of chelating agents by modest
alkaline biological treatment or by the use of
kidneys
Removal of chelating agents
Sulphate pulping
Increased systems closure combined with the
use of kidneys
Reduced water consumption and
effluents
Sulphate pulping
Organosolv pulping
Reduced pollution, Simpler cooking
process, Improved use of raw
materials, Application to all wood
species, Lower investment costs
Recovered paper
processing
Advanced effluent treatment with a combined
process of ozonation and fixed bed biofilm
reactors
Reduced water emissions
Recovered paper
processing
Membrane end-of-pipe or partly in-line
treatment
Recovered paper
processing
Recovery boiler for ash and CO2 gas to
produce recycled mineral fillers for use in
paper
Reduced CO2 emissions
Recovered paper
processing
Kidney treatment
Reduction of chelating agents in
circuit water
Recovered paper
processing
The Continuous Batch Fibre Recovery System
to process recovered paper in a complete
system
The paper
machine
Minimum effluent paper mills – optimised
design of water loops and advanced
wastewater treatment technologies
Focused on additional biologicalmembrane-reactors, membrane
filtration techniques such as micro-,
ultra- and nanofiltration, ozone
treatment and evaporation
Paper machine
Impulse technology for dewatering of paper
Potential for energy saving
Paper machine
Condebelt processes
Improved strength properties give
potential for savings through
reduced basic weight, higher
potential for energy (heat) recovery
Paper machine
Internal heat pumps
Paper machine
Total site integration tools
Source : BAT BREF
To lower all emissions at the same
time
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5
TRENDS
The figure below gives the reasoning behind the trends - from reasons for
differences and comparisons in chapters 2-4 towards trends described in
this chapter.
FIGURE 5-1
Reasons to Comparisons to Trends
Reasons
to
Comparisons
to
Trends
International comparison
Intra-EU comparison
Differences in
productivity
Other sources
for differences
in performance
European
pulp and
paper
industry
(the three focus
grades)
Trends
up
level
down
- output
- employment
- trade
- production costs
- technology
- productivity
- profitability
The competitors to
the European pulp and
paper industry (the three
focus grades)
5.1
Trends in Output
In general, world paper demand is expected to grow by 2.9 % annually on
the average up to 2010. Of the main grades, demand for coated woodfree
papers will grow the fastest, 4.1 % per year, followed by uncoated woodfree
grades at the growth rate of 3.6 % per year. However, future demand for
cut size papers in western markets is expected to grow at about 5 % per year
in the medium term. This reflects the widespread use of laser and ink jet
printers and the growth of low-volume copiers.
Cartonboards will show the third highest market growth of 3.4 % per year.
The growth rate of WLC is estimated to be 1.7 % per year in the period
1997-2010.
The paper and board grades with the highest volume growth are
corrugating materials, uncoated woodfree papers, cartonboards and coated
woodfree papers.
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Figure 5-2
Estimated Global Demand Growth for Paper and Paperboard by Grade 1998 – 2010
5
- Market growth, %/a Copy paper
Coated
Woodfree
Uncoated
Woodfree
4
Cartonboards
Coated
Mech.
3
Tissue Corrugating Materials
Average 2.9 %
Unc.
Mech.
Newsprint
2
Sack
Paper
1
WLC
Other
Grades
0
0
20
40
60
80
100
- Share of consumption 1998, % -
Total consumption of bleached kraft pulp is expected to grow by 2.9 % per
year on the average from 1998 to 2010. What comes to the demand for
bleached market kraft pulp, it will grow almost 3.9 % per year in the same
period. Demand for bleached hardwood kraft pulp will grow fastest. Its total
demand grows 3.5 % and market demand 5.9 % per year. The
corresponding figures for bleached softwood kraft pulp are 2.0 and 2.6 %
per year.
The paper markets in North America, Western Europe and Japan will be
driven by steady growth of demand for coated printing papers and uncoated
woodfree papers. Despite the economic problems in Asia and Latin
America, the fundamentals for long-term economic growth and paper
market expansion exist in these regions. In terms of paper and board
consumption, the size of the Asian market including Japan and China, has
already surpassed that of Western Europe and is rapidly approaching the
North American level.
52A2965A
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Figure 5-3
Growth Rate Of Paper And Board Consumption In Western Europe 1997 - 2015
- Market growth, %/a 4
Coated
Woodfree
Coated
Mechanical
3
Tissue Corrugating Materials
Average
Uncoated
Woodfree
2
Newsprint
Unc.
Mech.
Cartonboards
1
Other
Grades
0
Sack WLC
Paper
copy
paper
5 % growth 1997-2005
-1
0
20
40
60
80
100
- Share of consumption 1997, (70 million tons), % -
5.2
Trends in Employment
Pulp and paper production has, over time, become less and less labourintensive, due to automation and rationalisation at the mill sites. Increased
use of machinery in cutting the wood has dramatically reduced the number
of forest workers in many European countries. Similar trends have been
seen in the competing countries, particularly in those with relatively high
labour costs.
Variations in the exchange rates alter the position of different countries in
terms of total labour costs per hour in the paper industry. The theoretical
number of working hours in a week or in a year differs from the actual
number of hours worked. Calculation methods for the wages and salaries
and for the social charges are not uniform. Direct comparisons between
countries, even in Europe, are thus difficult to make.
Paper industry workers in Japan and USA have the highest direct wages
and salaries, at today’s exchange rates, closely followed by Canada and
several of the European countries. However, the social charges are
substantially higher in Europe. Therefore, on total cost/hour basis, Europe
has the highest labour costs. Europe has also the lowest numbers of
working hours.
Competitiveness of the European industry, in comparison to some of the
key competitors is better than what the labour cost numbers would indicate.
The productivity of labour is high and the labour force is highly skilled.
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Case study experiences indicate that the level of skills at similar plants is
higher in Europe than in North America. Further studies are however
required on the subject. Therefore the labour costs per ton of product
produced are more competitive. Also the quality of the products is high
allowing a higher sales price than for some of the imported competing
products.
Table 5-1
Regional Efficiency Factor (labour)
FAR
JAPAN
LATIN
NORTH
EAST
AMERICA
AMERICA
NORDIC
COUNTRIES
WESTERN
EUROPE
1.5
1
1.05
0.9
1.3
1
Labour conflicts have been more frequent in Canada than in Europe, but
USA, Japan and Latin American countries have had less labour conflicts
than Europe in recent years. Some of the difference can also be explained
by rules: in the USA mills are allowed to be operated by supervisory staff
whereas in Europe when operating personnel goes on strike the mill shuts
down for the time. Within European comparison Sweden and Germany
have experienced relatively fewer labour conflicts than other countries,
probably mainly due to a clearer support of the governments’ economic and
social policies by the labour unions in these countries.
The future problems are mainly in the social cost sector. In the attempts to
balance national economies, different social charges and taxes risk to rise
further in Europe. The attempts to solve the unemployment problems by
reducing working hours further affect the competitiveness of the European
industry vis-à-vis the competitors.
With an increasing number of modern facilities, the non-European
industries are likely to reduce the advantage European industry enjoys
today through higher productivity.
The European working environment is more bureaucratic and labour
contracts and working practices less flexible than outside Europe. Even
within Europe, there are still fairly large differences between countries
necessitating further efforts of harmonisation - without unnecessary
increase in bureaucracy or regional subsidies.
The European paper industry labour force is highly educated and can be
even further trained. Together with an increase in local contracting and in
other flexibility issues, this provides some opportunities to maintain (or
even improve) the competitive position.
As the paper industry is very capital intensive and large additional costs
occur whenever mills need to be shut down, a reduction of mill stoppages
because of public holidays would, even if adding to labour costs, increase
total competitiveness in many cases.
(Source: Competitiveness of the European Pulp, Paper and Board Industries. Survey
conducted by Jaakko Pöyry Consulting for former DG III)
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5.3
Trends in Trade
The fibre flow occurs in three different forms
International trade in pulp, paper and paperboard has expanded markedly
during the past 20-30 years. Most of the increase has taken place in the three
main markets of North America, Western Europe and the Far East. There has
been a clear trend towards a higher degree of internationalisation, and many
pulp and paper grades have become internationally traded commodities. World
exports of wood pulp for papermaking now correspond to more than 20 % of
the total pulp production.
Fibre can be traded and forwarded in three forms, i.e. paper, pulp and
recovered paper. Countries and regions that produce or collect more than
they consume of some form of fibre become net exporters of fibre in this
form. On the other hand, if in a country/region the production/collection of
fibre in one of these forms does not cover the demand, then this
country/region will become a net importer of the fibre form in question.
Table 5-2
The Import – Export Balance within the EU, tons
Grade
Import EU
Export EU
IntraEU
WLC
50 000
600 000 700 000
BKP *)
4 092 300
528 600
3 070
000
Copy paper
500 000
245 000 170 000
Trade inside countries*)
= (production – export)
2 300 000
1 200 000
3 495 000
*) In BKP trade calculated by deducting exports from market production of BKP
(softwood + hardwood pulp).
The table above presents the import and export balance within the European
Union of WLC, BKP and copy-paper. Judging by the amount of imports,
BKP has the largest share. North America is an important pulp provider for
the European paper mills. Copy paper has a slightly negative trade balance
for the EU. The biggest export share belongs to WLC. This cartonboard is
sold to mainly Asia and Australia.
Import/export and intra-EU trade numbers for copy paper should be taken
as indicative. As large volumes of uncoated woodfree paper are delivered
first in reels from outside Europe to Europe or from one EU country to
another and sheeted into copy paper in the country importing the reels, the
import/export statistics cannot follow the paper trade for copy end-use very
well. Also, the statistics on paper in sheets do not always make a distinction
between the sheet sizes. Thus larger folio sheets and copy paper can be
delivered under the same customs classification.
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Key Competitive Flows of Bleached Kraft Pulp
• INTRA-EU: The inner flow in Central Europe is limited in volume but
the Nordic injection is at the moment vital. The Nordic injection is likely
to decrease due to increasing integration between pulp and paper
producers. Germany’s plans to build one or two new mills do not upset
the balance very much and would be a positive development for
European forests. Investment plans in the Baltic countries or Russia
might, if materialised, change the pattern somewhat.
• EXPORT: There are no significant exports from Europe.
• IMPORT: Imports from North America to the European Union are
substantial and possibly even growing. Imports from South America are
significant although much lower than those from North America.
Imports from South America may increase in the future, too. Asian
imports to Europe are still small but increase is in sight.
•
Developments in the Baltic region or in Russia may change the trade
flow pattern somewhat.
For BKP critical flow, due to its sheer size, is from North America to
Western Europe. There are two critical competitive flows for BKP. These
are the flow from South America to the European Union and the (at this
stage “great unknown”) flow from Asia to the European Union. These
flows are greatly affected by the developments that will take place in
exports from the US and South America to Asia. If continuation in these
flows faces problems, more pressures on imports to Europe are foreseen.
Figure 5-4
Global Trade Flows of Bleached Market Kraft Pulp
- Million tons -
0.1
0.2
3.5
0.1
0.2
3.9
0.1
4.2
0.3
2.2
0.2
0.2
1.7
0.2
0.8
1.5
0.4
2.4
0.3
0.1
1.4
0.9
Changes to 2010
Relative growth
Growth, no
trade -98
0.1
0.1
0.3
1.3
Minor/no change
Relative decline
003EY08
A8PTN06.PPT
Total 26 mill. tons
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Key Competitive Flows of Copy Paper
• INTRA-EU: There is a significant flow from Nordic countries to Central
Europe. Proportions of this flow are steady and slowly growing. IntraCentral European flow of copy paper will remain big and the volume is
even expected to grow.
• EXPORT: European producers export small amounts of copy paper to
Asia and this trade is expected to decline.
• IMPORT: Imports from South America are still small but increasing.
The same is true for imports from Asia and the USA. There are some
signs that the US producers might try to enter European markets with
bigger volumes (rebuffed in Asia), but their lack of competitiveness
makes this difficult.
Important: The figure below presents the trade flows for cut size paper only.
A large part of the Nordic paper exports to Continental Europe and much of
the other international trade of uncoated paper is done in reel form. The
reels are sheeted close to the customer. Therefore, the global trade numbers
are misleading in describing the size of the copy paper business.
Figure 5-5
Global Trade Flows of Cut Size Copy Paper
- 1000 tons 10
20
20
160
10
10
10
10
10
20
Changes to 2010
Relative growth
10
Growth, no trade -98
Minor/no change
Relative decline
003EY07
A8PTN06.PPT
Total 0.3 mill. tons
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Key Competitive Flows of White-lined Chipboard
WLC shows a continued strong Intra-Western-European flow. The
European exports to Asia and Australia are steady, but the flow to Southeast
Asia is diminishing. WLC is a product for which the local competition in
Asian countries is strong, and for this reason there is probably not major
growth in European exports to Southeast Asia. Indonesia, Taiwan and
Korea are the leading exporters of this grade to other Asian countries.
Figure 5-6
Global Trade Flows of White-lined Chipboard
1000 tons
80
700
80
Changes to 2010
Relative growth
350
Growth, no trade -98
Minor/no change
Relative decline
Total 3 million tons
A8PTN06.PPT
1000
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5.4
Trends in Production Costs
The production costs situation in the EU and its competing regions can be
briefly described as follows:
•
In energy, there are still large variations between the individual
European countries although energy prices have been converging within
Europe in recent years. Compared to the competitors outside Europe,
European industry has higher energy costs than its North American,
Chilean or Chinese competitors, but lower than in e.g. Brazil. The wide
variety of energy sources, together with a high self-sufficiency in
energy use the pulp and paper industry in Europe, provides Europe with
an average overall position.
•
In wood issues, Europe is in a disadvantageous position. Wood costs are
high, partly due to low growth and partly due to long delivery distances
and scattered lots of wood in many countries. Also, the drive for
environmentally friendly harvesting methods adds to the wood costs in
Europe compared to many of the competing countries/regions.
•
Pulp availability is in general good in the Nordic region, but several
countries lack either softwood or hardwood pulp or both in continental
and southern Europe. Also, due to the high cost of wood and/or
importing needs, the cost of pulp is relatively high leading to a slightly
negative overall positioning.
•
Recovered paper collection rate is high in Europe. However, some
countries, such as Finland and Sweden, which have high paper
production, have low local consumption due to sparse population, and
thus have low access to recovered paper. Also, as a reflection of the
high wood costs which also indirectly impact the recovered fibre costs,
the overall position of Europe vis-à-vis competition in recovered paper
is only average.
•
In chemicals, the combination of price, availability and technological
level gives Europe a slight edge over competitors in bleaching
chemicals and a neutral position in cooking chemicals. What comes to
papermaking chemicals, this group of products is far too heterogeneous
for any firm conclusions. Some individual chemicals are less expensive
in Europe than in key competing countries outside Europe, for others it
is the other way round.
•
In labour, Europe is clearly disadvantaged by the high direct and
indirect labour costs. The quality of the labour force is high and the
work ethics, in general better than in competing areas. The disadvantage
of the cost side is, however, too overwhelming to balance the overall
position in labour. Demands for shorter working time risk to add to the
labour costs.
52A2965A
53
•
In capital costs, the European position is neutral. The interest rates have
been slightly above those in North America but lower than in the other
key countries and regions. Also the availability of capital is sufficient.
Overall, the differences in the cost of capital, worldwide are narrowing
down due to the freeing up of the capital markets.
•
In taxation, Europe is disadvantaged. The corporate taxes are slightly
higher than average and in VAT, European industry is, together with the
Chilean, paying the highest dues.
Production costs of the three studied grades, bleached kraft pulp, copy
paper and white-lined chipboard, will be reported in more detail in a later
stage of this project.
(Source: Competitiveness of the European Pulp, Paper and Board Industries. Survey
conducted by Jaakko Pöyry Consulting to EU DG III)
5.5
Trends in Technology
Bleached Kraft Pulp
Technology development has during the last few years heavily concentrated
on IT and automation technology. However, on the kraft pulp side, the
development of pulp mill technology has also come from increased
environmental concern and tightened effluent limits. Implementation of
BAT and Cluster rule will put a pressure on the mills to favor cleaner
technology solutions.
Figure 5-7 shows future technologies and developments for chemical pulps.
Factors improving the competitiveness of the kraft pulp process are better
selection of raw material, i.e. homogeneous wood material, possibilities to
adjust chip dimensions, simplified cooking, screening and bleaching
processes. Raising the pressure of the soda boiler and building additional
condensate turbines for low temperature steam can increase the energy
efficiency of the pulp mills substantially. The effect of these improvements
can be summed up to:
− Lower wood consumption (less reject, better yield)
− Increased energy production (though increasing process energy
consumption at the moment)
− Lower chemical consumption (homogenous fibre raw material)
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Figure 5-7
Technologies and Developments for Chemical Pulps (The light red lines indicate ongoing
development)
Precision chipping
Classified raw-material
New fibres
Lower water consumption
Energy efficiency (process)
Increased power production
Black liquor gasification
Circulation-free digester
Simplified cooking
Closed water circulation
Bio-pulping
Already
in use
Short
(5 years)
Medium
(10 years)
Medium to long
Long
(>10 years)
(>15 years)
Copy Paper and White-lined Chipboard
The IT and automation technology development has had an influence on the
paper industry as well. New technologies like the Internet have increased
the use of printing paper. Advanced printing technology has also led to a
demand for high quality printing papers. IBM, Ocè and Epson announced
recently their new printing technologies that are high-fed wet machines.
Increased use of e-media, CD-ROMs etc. for catalogues, dictionaries,
reference books and directories is also, as paradoxical as it may seem,
augmenting the use of printing paper.
On the board side the development has mostly been characterized by higher
production speeds, and improvements in surface smoothness and coating
technology. The new solutions have improved the printing performance and
facilitated the expansion of rotogravure printing technology.
Figure 5-8 shows some possible future technologies and developments for
paper and board machines. Technologies that significantly lower current
paper and board machine speed are not likely to be introduced. New
technologies are in “worst” cases allowed to lower the rate paper machine
speeds are rising, or in extreme cases, keep the speeds at the present level.
Some new technologies have potential to further increase the productivity
without significant increase in costs. This enables paper manufacturers to
compete more effectively with substitute products including e-media. The
effect of these improvements can be summed up to:
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− Rising PM speed (increased production)
− Increasing energy consumption (success of coated grades)
− Lower wood fibre consumption (lighter grades, increasing use of
minerals and additives)
Figure 5-8
Technologies and Developments for Paper and Board Machines
Headbox
Water Circuits
Stratified headbox
Ongoing
development
Ongoing
development
Lowering paper
grammages
Ongoing
development
Ongoing
development
Increased width
Improved retention
Ongoing development
development
Ongoing
Nanofiltration
POM technology
Ongoing development (not probable)
Partly
Increased speed
Partly
OptiFeed operational
operational
Ongoing
development
Ongoing
development
Already (5 years)
in use
(10 years)
(>15 years)
Simplified process
Quality control systems
Ongoing development
Mobile technology solutions
Ongoing development
Smart equipments
Ongoing development
WAP technologies
Ongoing development
Already (5 years)
in use
User profiled databanks
Ongoing development
Already
(>15 years)
(10 years)
in use (5 years)
(>10 years)
Drying Technology
(>15 years)
Automation
Measuring
Technology
Ongoing development
Nano - particles measuring
Standardisation/open solutions
(10 years)
Automation and
Measuring Technology
IP addresses on machines
Humane Science In automation
Ongoing development
development
Ongoing
Forming Zone
High Consistency Forming
Impulse technology
Multil yering by
stratified headbox
Fast grade changes
Ongoing development
Ongoing
development
Impingement drying
Ongoing development
Ongoing
development
Dry Forming
Fibre loading
Already (5 years)
in use
(10 years)
(>15 years)
Already (5 years)
in use
(10 years)
(>15 years)
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5.6
Trends in Productivity Levels and Profitability
Differences in costs and raw material access either promote or discourage
(in proportion to other areas) measures to improve productivity. High
labour or energy costs prompt companies to invest in automation, energy
self-sufficiency and savings of energy as well as materials. Finnish pulp
industry is a good example of the above points. Manning of a modern
500.000 tons/annum mill is down to about 200 people, including everyone
and still with 5½ shifts – due to the short working hours/week. Also in the
energy side, those mills are today clear net sellers of energy whilst in some
other countries, such as North America with historically low energy costs,
most mills still need to buy substantial amounts of energy from outside
sources.
Access to capital and the cost of capital are, jointly, also a driver towards
better productivity to increase the profitability. The social and commercial
structure of a country or region shapes the industry. In a society, such as the
US, where companies are largely private and private individuals motivated
to profit through their work and their shareholding, the strive for higher
productivity and profitability is obviously different from countries, such as
the former Soviet Union, where private entrepreneurship and private
ownership did not exist in any major way.
Globalisation of the ownership of pulp and paper industry and the trade of
the industry products have begun to rapidly harmonize the world in the
sense that higher productivity and better profitability are today common
goals in virtually all of the countries, regardless of their different starting
points and backgrounds. This wave is likely to continue as the world trade
continues to liberalize and consolidation pressures grow.
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6
6.1
THE CURRENT ENVIRONMENTAL REGULATIONS
IN EUROPEAN COUNTRIES AND THEIR KEY
COMPETITOR COUNTRIES
Introduction
During the 1990s environmental regulations for the pulp and paper industry
became more uniform over the world although large differences still exist.
In countries with most stringent environmental regulations one has
introduced the concept of “Best Available Technology” (BAT) as a tool in
the struggle to identify the (currently) best environmental performance in
the industry against which other industries may be measured. The term
“best available technology” is taken to mean the latest available stage of
development (i.e. a practical state of the art) of processes, facilities or
methods of operation, which indicate the practical suitability of a particular
measure for limiting discharges. In this connection special consideration
must also be given to the economic feasibility of the pollution control
methods, as well as the time limits for application and the nature and
volumes of the discharges concerned.
In the following chapters, environmental legislation in a number of
countries – in terms of water and air emissions limits, valid for the pulp and
paper industry - has been compared with the BAT emission data, as
specified in the EU BREF document. The comparison is made, as far as
possible, for the categories bleached kraft, copy paper and white-lined
chipboard (WLC).
6.2
EU BAT Emission Levels According To BREF
Document
The following tables summarise the BAT emission data of the EU BREF
document.
Table 6-1 gives the BAT water emission levels according to the BREF
document, for bleached kraft pulp, non-integrated uncoated fine paper and
RCF paper without deinking. The two latter categories are those, which are
the closest to “copy paper” and “WLC board”. By definition WLC board is
made from recycled paper without deinking.
1. Comment to Table 6-1: The emission levels of BOD, TSS, N and P are
higher for non-integrated paper than for RCF based paper. COD values
are the same for the two paper types. This is not logical, as RCF based
paper normally gives significantly higher water emissions than nonintegrated paper.
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2. Comment to Table 6-1: The BAT BREF (July 2000) has two values for
AOX emissions from RCF based mills without deinking, <0.005 and
<0.5.
Table 6-1
BAT Emission Levels for Emission to Water
Category
Bleached
kraft
Nonintegrated
uncoated
fine paper
RCF paper
without
deinking
Flow
3
m /t
COD
kg/t
BOD
kg/t
TSS
kg/t
AOX
kg/t
Total N
g/t
Total P
g/t
30 – 50
8 – 23
0.3 – 1.5
0.6 – 1.5
< 0.25
100-250
10 – 30
10 – 15
0.5 – 2
0.15 –
0.25
0.2 0.4
< 0.005
50 – 200
3 - 10
<7
0.5 – 1.5
< 0.05 0.15
0.05 –
0.15
< 0.005
or < 0.5
20 – 50
2-5
Tables 6-2 and 6-3 give the BAT air emission levels for bleached kraft and
power plants.
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Table 6-2
BAT Emission Levels for Emission to Air, Kraft Mills
Bleached and
unbleached
kraft pulp
Dust
kg/t
SO2 (as S)
kg/t
NOx (as NO2)
kg/t
TRS (as S)
kg/t
0.2 – 0.5
0.2 – 0.4
1.0 – 1.5
0.1 – 0.2
Table 6-3
BAT Emission Levels for Emission to Air, Auxiliary Boilers
Coal
Heavy fuel
oil
Gas oil
Gas
Biofuel
(e.g. bark)
mg S/MJ fuel
100 – 200
100 – 200
25 – 50
<5
< 15
mg NOx/MJ
fuel
80 – 110
80 – 110
45 – 60
30 - 60
60 – 100
10 – 30
10 – 40
10 – 30
<5
10 – 30
mg dust/Nm
6.3
3
Comparing Legislation – EU and Other Countries
Environmental limit and guideline systems for pulp and paper industry vary
significantly between European countries, despite efforts to create a more
uniform system. Several countries have a system where the national
legislation/authorities set general (minimum) limits/guidelines that are
adjusted by the permitting authorities, based on the local environmental
conditions.
Most countries have separate systems for air emissions, wastewater
discharges and solid wastes, but especially after the European Union IPPC
Directive, a more integrated approach is aimed at.
All EU countries must have ratified the IPPC Directive by 1 October 1999.
This means that every country must adapt their environmental laws and
local guidelines to the Directive but it does not mean that all the European
pulp and paper mills would have the same threshold limits as the reference
values given in the BAT BREF.
6.3.1
Regulations in Different Countries - Emissions to
Water - Comparisons
Tables 6-5, 6-6, 6-7 and 6-8 give the regulations, i.e. standards or emission
limits, for the eight European and three non-European countries. Six
European countries – Austria, France, Germany, Italy, Portugal and Spain –
have set general standards, which are applicable in all mills. Sweden and
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Finland have set individual limits for each mill. Indonesia applies general
standards. USA applies general standards, but individual limits can also be
set. Brazil sets individual limits, based on the mill location regarding
neighbouring settlements and characteristics of receiving waters.
In some cases limits applicable for existing (ex) and new mills are given
separately.
Each country is discussed below, in relation to the BAT/BREF emission
data. These are given as specific data, i.e. as kg per ton of pulp/paper (kg/t).
In many cases such limits have been set also in the different countries, but
in some cases the limits are set as concentrations, e.g. mg/l. In those cases
we have recalculated the “mg/l limits” to “kg/t limits”, using the water
consumptions specified in the BREF (acc. to Table 6-1). We are aware of
the fact that also after the unit conversion the limit values are not
completely comparable. However, with the current lack of harmonisation
this is the only way to carry out the comparison.
In the cases of Sweden and Finland, most permits are given as absolute
discharges, e.g. tons/day. In those cases we have calculated specific values
from the production data.
The specific values are given in Tables 6-5 to 6-8. The tables are based on
information from Jaakko Pöyry Consulting’s databanks, national authorities
and national forest industry associations.
Emission limits are often defined as "annual" or "monthly". Table 6-4
shows how the studied countries have defined their emission limits.
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Table 6-4
Limit Types in Selected Countries
Country
Water:
Air
Austria
Annual averages
Annual averages
Finland
Monthly averages
Annual averages
France
Monthly averages
No info
Germany
Bleached kraft: daily monitoring: 4 out of 5
samples shall comply
No info
Paper:2-hours composite samples. 4 out of 5
shall comply.
Italy
3-hours composite samples, shall always
comply (according to our knowledge)
No info
Portugal
No info
No info
Spain
Monthly average. Daily average may exceed
the limits with 50 %.
No info
Sweden
Limits are usually annual averages, but
sometimes monthly averages. There is usually
also given a guide value, which is a monthly
average if the limit value is annual.
Usually a monthly average as limit
value or guide value. In the case of
H2S, the limit is often defined in such
a way that the value may be
exceeded maximum X % of the
operation time (X is then between 5
and 10 %).
Brazil
No info Brazil often follows US rules, so it is a
reasonable assumption that this is the case
also here
No info
Indonesia
No info
Following is stated: "The standards
shall be met 95 % of the time during
a normal operation computed over a
period of three months."
USA
The given limits are as monthly averages
(rather: average during 30 consecutive days).
In addition there are daily average limits,
usually with the double values (or slightly
lower) compared to the 30-days limits.
In some cases we indicated "No info". This means, in most cases, that the
compliance period is not defined. This can be interpreted in such a way that
the limit shall always be complied with.
Additional info: In several countries, which apply general limits on the state
level, it is possible that the permit authorities can set stricter limits, based
on the local environmental conditions and the technical characteristics of
the installation.
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Table 6-5
Regulatory Emission Levels in Different Countries; Emissions to water - Bleached Kraft
Country
COD
BOD
TSS
AOX
Total N
Austria
ex 30 kg/t
new 20 kg/t
ex 3 kg/t
new 2 kg/t
ex 5 kg/t
new 2.5 kg/t
Finland
4 mills
29 - 73 kg/t
av. 46 kg/t
1.7 – 8 kg/t
av. 3.9 kg/t
-
0.25–1.5
av. 0.9 kg/t
0.46 kg/t
(1 mill)
35 – 100
g/t
France
SW/(HW)
ex 65 (32.5)
new 50 (25)
kg/t
ex 3.9 (2.6)
new 3.0 (2.0)
kg/t
Ex 6.5 kg/t
new 5.0 kg/t
1 kg/t
-
-
Germany
ex 40 kg/t
new 25 kg/t
ex 35 mg/l
new 30 mg/l
Incl. in COD
ex
0.35
new 0.25
kg/t
Toxic
effects
absent
160 mg/l
40 mg/l
50 kg/t
6 kg/t
3 kg/t
Law:
160 mg/l
40 mg/l
New *)
agreement:
27.5 kg/t
Italy
Portugal
Spain
Sweden
5 – 8 mills
Brazil
Indonesia
USA
BPT
0.5
0.25
kg/t
NH4
15
NO3-N 20
NO2-N
0.6
mg/l
10 mg/l
1.5 kg/t
15 mg/l
10 mg/l
80 mg/l
-
NH4
15
NO3-N 10
mg/l
10 mg/l
-
3 kg/t
0.5 kg/t
9.3 – 56 kg/t
av. 29 kg/t
-
1.2 – 3.2 kg/t
av. 2.4 kg/t
0.15 – 0.8
av.0.36
kg/t
3 -400 g/t
30 - 50 g/t
(6-)18–30
kg/t
1.2 – 6.0 kg/t
4.5 – 60 kg/t
0.14 – 1 kg/t
-
-
29.75 kg/t
350 mg/l
8.5 kg/t
100 mg/l
8.5 kg/t
100 mg/l
-
-
-
8.05 kg/t
16.4 kg/t
BAT 0.623
kg/t
(month av.)
2.4 – 5.5 kg/t
3.9 – 9.5 kg/t
BAT 0.27
(month av.)
kg/t
-
NSPS
ex
new
Total P
80
mg/l
Tier 1 0.26
Tier 2 0.10
Tier 3 0.05
(kg/t, ann. av.)
-
3
*) Recommended effluent flow, 55 m /t
-
-
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Table 6-6
Regulatory Emission Levels in Canada. Water Emissions. Kraft Mills
Canadian
Provinces
BOD
Federal
TSS
d 12.5 kg/ADt
m 7.5 kg/ADt
British Columbia
AOX
Others
d 18.75 kg/ADt
m 11.25 kg/ADt
d 7.5 kg/ADt
m 7.5 kg/ADt
Dioxins, Furans,
Toxicity (trout) nonmeasurable
m 1.5 kg/Adt
Toxicity (trout) nonmeasurable.
AOX eliminated by
2002.
Ontario
d 10 kg/ADt
m 5 kg/ADt
d 13.4 kg/ADt
m 7.8 kg/Adt
d 1.03 kg/Adt
m 0.8 kg/Adt
Toxicity (trout and
daphnia) nonmeasurable.
Limits for 2378-TCDD
eq (60 ppq),
chloroform, phenol,
toluene
Quebec
d 8 kg/ADt
m 5 kg/ADt
Mills built before
Oct 22, 1992
d 18 kg/ADt
m 8 kg/Adt
1)
d 1.5-2.5 kg/Adt
1)
m 1 - 2 kg/Adt
Toxicity (trout) nonmeasurable
0.8 kg/Adt by 2000
Limit for 2378-TCDD
eq. (15 pg/l)
d 0.3 kg/Adt
m 0.25 kg/Adt
Toxicity (trout) nonmeasurable
Quebec
d 4 kg/ADt
m 2.5 kg/ADt
Mills built after Oct
22, 1992
d 6 kg/ADt
m 3 kg/ADt
Limit for 2378-TCDD
eq. (15 pg/l)
Separate mills,
examples
d 2.7–7.5 kg/ADt
m 1.35-4.5 kg/ADt
d = daily average limit
m = monthly average limit
d 5-10 kg/ADt
m 2.7-7 kg/ADt
d 0.8 kg/ADt
m 0.5 kg/Adt
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Table 6-7
Regulatory Emission Levels in Different Countries - Europe; Emissions to water
Paper mills - Non-integrated and RCF-based
Country
COD
BOD
Austria
ex 2 - 5 kg/t
incl. /RCF pulp
ex 20 - 25 mg/l
Finland
1 mill*
1 kg/t
France
Germany
Italy
TSS
Total N
Total P
50 mg/l
ex 10-30 g/t
0.33 kg/t
-
-
-
-
Ex 4 - 8 kg/t
new 2.5 -4 kg/t
ex 1 - 2 kg/t
new 0.7 kg/t
ex 1.5 kg/t
new 0.7kg/t
-
-
-
3 kg/t
incl./RCF pulp
1 kg/t
Incl. in COD
ex 10-40 g/t
10 mg/l
N - inorg.
2 mg/l
mg/l
-
NH4
15
NO3-N 20
NO2-N 0.6
mg/l
10 mg/l
ex
25 mg/l
ex
AOX
160 mg/l
40 mg/l
150 mg/l
40 mg/l
60 mg/l
-
15 mg/l
10 mg/l
160 mg/l
40 mg/l
80 mg/l
-
-
-
Printing **)
5 kg/t
-
2 kg/t
-
-
RCF-based
5 kg/t
-
2 kg/t
-
-
0.9 – 3.2 kg/t
0.13 kg/t
0.25–2.5 kg/t
-
44 g/t (1 mill)
0.5-11 g/t
150 g/t
5 g/t
Portugal
Spain
Law:
80
New
agreement:
Sweden
Printing (4 mills)
RCF-based
mill)
(1
2.5 kg/t
(1 mill)
0.75 kg/t
*) Finland has only one non-integrated fine paper mill
**) Recommended max. effluent flow: 25 m3/t for printing, 10 m3/t for RCF-based paper
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Table 6-8
Regulatory Emission Levels in Different Countries - Brazil, Indonesia, USA;
Emissions to Water; Paper Mills - Non-integrated and RCF-based
Country
Brazil
Indonesia
bl. papers
deinked pulp
COD
BOD
TSS
AOX
Total P
-
-
-
-
-
-
5.6 - 10 kg/t
160 – 200 mg/l
2.6 - 5 kg/t
75 – 100 mg/l
2.8 - 5 kg/t
80 – 100mg/l
-
-
-
18 kg/t
300 mg/l
6 kg/t
100 mg/l
6 kg/t
100 mg/l
-
-
-
-
*)
USA
Non-integr.
BPT
Total N
-
4.25 kg/t
5.9 kg/t
-
BAT
-
-
-
PCP 1.8 g/t
TCP 0.64 g/t
NSPS
-
1.9 kg/t
2.3 kg/t
PCP, TCP
as above
*)
USA
RCF paper,
non-deinked
BPT
-
1.5 kg/t
2.5 kg/t
-
BAT
-
-
-
PCP 0.87 g/t
TCP 0.30 g/t
NSPS
-
1.4 kg/t
1.8 kg/t
PCP, TCP
as above
*) PCP = pentachlorophenol
TCP = trichlorophenol
Limits applied only when chlorophenolic-containing biocides compounds are used.
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6.3.2
Regulations in Different Countries - Emissions to Air Comparisons
Tables 6-9, 6-10, 6-11 and 6-12 give the regulations, i.e. standards or
emission limits, for the eight European and three non-European countries.
Six European countries – Austria, France, Germany, Italy, Portugal and
Spain – have set general standards, applicable in all mills. Sweden and
Finland set individual limits for each mill. Indonesia applies general
standards. USA applies general standards, but individual limits can also be
set. Brazil sets individual limits, based on the mill location regarding
neighbouring settlements.
In many cases concentration limits are referred to at certain oxygen or
carbon dioxide concentration in the flue gas from an incineration plant. We
have not indicated these in the tables, for reason of clarity. As the reference
O2 or CO2 concentration can vary between the cases, the limits are not
exactly comparable. Our values are still sufficiently comparable for the kind
of comparison that is done here.
For emissions to air it is more common to use concentration limits than for
emissions to water. However, also specific limits are used as kg per ton
pulp and for power boilers as mg per MJ fuel. The variations are here larger
than in the case of water, which makes the comparison more difficult.
Emission limits are often defined as "annual" or "monthly". Table 6-4 in the
previous chapter showed how the studied countries have defined their
emission limits.
Concerning paper and board mills, air emission limits are usually set only
for the power plants at the mills. Tables 6-9, 6-10 and 6-11 give emission
limits valid for kraft pulp mills including bark boilers/furnaces. Table 6-12
gives limits for power boilers in general.
For the discussion below, concerning kraft mills, we have transferred
concentration limits into estimated specific values, as kg/ton, using typical
gas flows from recovery boilers, lime kilns and bark furnaces. These are the
three main air pollution sources at kraft mills.
In comparing with the BREF sulphur emissions, Table 6-2, we assume that
total S is the sum of SO2-S and TRS, for example 0.3-0.6 kg S/t.
One issue, similar to all countries, is the relation of the dust emission value
for biofuel boilers (bark boilers) to the BREF. Such low limits, 10-30
mg/Nm3, seem not to be applied by any of the countries studied, except
maybe in some cases in the USA.
The tables are based on information from Jaakko Pöyry Consulting’s
databanks, national authorities and national forest industry associations.
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Table 6-9
Regulatory Emission Levels in Different Countries – Europe;
Emissions to Air - Bleached Kraft
Dust
Austria
RB:
50 mg/Nm
Proposed
limits:
SO2 (as S)
3
200 mg/Nm
-
NOx (as NO2)
3
400 mg/Nm
ex 1 kg S/t
new 0.5 kg
S/t
TRS (as S)
3
Others
3
20 mg/Nm
as H2S
ex 2.5 kg/t
new 2 kg/t
Finland RB:
100–250 mg/Nm
3
50 – 80 mg/MJ
10 mg/Nm
3
LK:
50–100 mg/Nm
3
100–150 mg/MJ
20–40 mg/Nm
3
BF:
50–150 mg/Nm
3
150 mg/MJ
-
3
-
Total:
0.7–1.5 kg S/t
(total S)
4 mills
RB:
80 mg/Nm
3
LK:
100 mg/Nm
3
Others:
50 mg/Nm
3
France
Germany RB
300 mg/Nm
3
500 mg/Nm
exempel: 50
3
mg/Nm
exempel:
3
175 mg/Nm
exempel:
3
250 mg/Nm
exempel:
3
5 mg H2S/Nm
exempel: 50
3
mg/Nm
exempel:
3
100 mg/Nm
exempel:
500
3
mg/Nm
exempel:
3
5 mg H2S/Nm
-
-
3
30 mg/Nm
of chlorine in
exhaust from
bleach plant.
3
1 ng/ m of
TCDD-equi’s
in dry smoke
gases.
Limits for HCl
and org.
compounds
LK
Italy
-
1000
-
Portugal RB:
150 mg/Nm
3
250 mg/Nm
3
1500 mg/Nm
3
10 mg H2S/Nm
3
LK:
150 mg/Nm
3
1350 mg/Nm
3
1500 mg/Nm
3
50 mg H2S/Nm
3
BF:
50-300 mg/Nm
3
Spain (gen’l)
150 mg/Nm
3
Sweden RB:
100 -250 mg/Nm
3
LK:
100 -250mg/Nm
3
BF:
100 -250mg/Nm
3
Total:
5-7 mills
-
200-1000
3
mg/Nm
650-1500
3
mg/Nm
3
300 ppm
10 mg H2S/Nm
3
CO 500 ppm
80 mg/MJ (1 mill)
10 mg/Nm
3
ECFbleaching:
50 mg/Nm
3
2150 mg/Nm
-
0.2-0.3 kg C/t
0.6 – 1.5 kg/t
av. 0.9 kg/t
0.9 – 2.0 kg/t
av. 1.5 kg/t
RB = recovery boiler LK = lime kiln BF = bark furnace (bark boiler)
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Table 6-10
Regulatory Emission Levels in Different Countries – Brazil, Indonesia, USA;
Emissions to Air - Bleached Kraft
Dust
Brazil Ex. 1
Ex.2
RB:
LK:
DT:
PB:
SO2 (as S)
NOx (as NO2)
TRS (as S)
Others
1.2 kg/t
11.4 kg/t
0.06 kg/t
3
100-150 mg/Nm
3
160 mg/Nm
≤ 70 MW:
1,19 g/MJ
3
2 - 8 ppm
3 - 7 ppm
3 ppm
-
50-100 mg/Nm
3
50-100 mg/Nm
3
100 mg/Nm
3
50-100 mg/Nm
- not regulated
(as of 3/2001)
> 70 MW:
0,48 g/MJ
Indonesia
RB:
230 mg/Nm
3
10 mg/Nm
3
LK:
350 mg/Nm
3
28 mg/Nm
3
DT:
260 mg/Nm
3
28 mg/Nm
3
PB:
230 mg/Nm
3
USA
Total, examples:
1.5 – 2.8 kg/t
Examples, RB:
69 – 92 mg/Nm
LK:
RB = recovery boiler
LK = lime kiln
DT = dissolving tank
BF = bark furnace (bark boiler)
PB = power boiler
-
2 – 6 kg/t
3
1.5 – 4 kg/t
0.1 – 0.6 kg/t
75 – 150 ppm
5 – 10 ppm
100
ppm
8 – 20 ppm
–
290
Bleach plant,
3
mg/Nm :
Cl2 10
ClO2 125
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Table 6-11
Regulatory emission levels in Canadian Provinces.
Air emissions. Kraft mills.
Dust
TRS (as S)
Others
British
Columbia
3
BF:
50 - 120 mg/Nm
(dep. on plant size)
RB:
Level A: 5.5 mg/mol
Level B: 11 mg/mol
LK:
Level A: 5.5 mg/mol
Level B: 11 mg/mol
Smelt Tank:
Fugitive emissions:
6.5 ppm
26 ppm
Level A: 0.2 kg/ADt
Level B: 0.4 kg/Adt
Level A:
Level B:
0.225 kg/Adt
0.35 kg/Adt
Ontario
3
50 - 90 mg/Nm
(dep. on plant size)
BF:
Max 1 %
sulphur in
fossil fuel.
New
Brunswick
RB:
ex 375 ppmv
new 250 ppmv
ex 20 ppmv
new 10 ppmv
LK:
ex 0.75 kg/ADt
new 0.5 kg/ADt
ex 20 ppmv
new 20 ppmv
Smelt Tank:
ex 0.5 kg/AD
new 0.25 kg/Adt
RB:
ex 200 mg/Nm
3
new 100 mg/Nm
3
ex 5 ppm
new 20 ppm
LK:
ex 340 mg/Nm
3
new 150 mg/Nm
3
ex 10 ppm
new 10 ppm
Quebec
Other units:
10 ppm
RB = recovery boiler LK = lime kiln BF = bark furnace (bark boiler)
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Table 6-12
Regulatory Emission Levels in Different Countries; Emissions to Air - Power Boilers
Dust
Austria
SO2 (as S)
50-100 mg/Nm
3
Finland
BF:
50-150 mg/Nm
200 mg/Nm
NOx (as NO2)
3
300 mg/Nm
3
Others
3
150 mg/MJ
50 – 80 mg/MJ
GB:
France
50 mg/Nm
3
50 mg/Nm
3
Germany
BF:
OB:
300 mg/Nm
3
*)
3
500 mg/Nm
400 mg/Nm
3
500 mg/Nm
3
500 mg/Nm
3
Limits for HCl
and org.
compounds
fluidised bed / bubbling
bed boilers: 300
mg/Nm3
GB:
5 mg/Nm
3
17.5 mg/Nm
3
200 mg/Nm
3
OB:
150 mg/Nm
3
850 mg/Nm
3
500 mg/Nm
3
Portugal BF:
50-300 mg/Nm
3
200-1000 g/Nm
3
650–1500 mg/Nm
3
-
OB:
300 mg/Nm
3
1350 mg/Nm
3
1500 mg/Nm
3
-
Spain (gen’l)
150 mg/Nm
3
2150 mg/Nm
3
300 ppm
CO 500 ppm
Sweden BF:
See Table 6-9
Italy
OB:
Brazil
General:
75 – 100 mg/MJ
Corresp. to max
0.3 % S in the oil
See Table 2-14
Indonesia
230 mg/Nm
See Table 2-14
3
800 mg/Nm
See Table 2-14
3
1000 mg/Nm
See Table 2-14
3
USA
VOC:
8 - 13 mg/MJ
34 - 51 ppm
WW:
8 – 43 mg/MJ
3
23–113 mg/Nm
4 – 13 mg/MJ
4 - 13 ppm
43 - 130 mg/MJ
59–177 ppm
GB:
13 mg/MJ
3
35 mg/Nm
220 mg/MJ
222 ppm
43 - 130 mg/MJ
61- 182 ppm
-
OB:
4 mg/MJ
3
12 mg/Nm
43 - 260 mg/MJ
43 - 225 ppm
130 -215 mg/MJ
133-221ppm
0 - 4 mg/MJ
18 ppm
*) >10 MW
BF = bark furnace
GB = gas fired boiler
OB = oil fired boiler
VOC = volatile organic compounds
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6.3.3
Comparisons
In the section below, bleached kraft mills are surveyed, due to the
BAT/BREF, as one and the same, regardless whether they produce
softwood or hardwood pulp. In practice, in terms of some of the criteria,
most notably AOX, the mills have a different starting point depending on
the raw material. Compared to softwood kraft pulp, bleaching of hardwood
pulp is easier and results, e.g. in lower AOX levels.
Therefore, in countries with only softwood kraft pulp or with high share of
softwood pulp (Austria, Finland, Germany and Sweden) set criteria/limits
are harder to reach than what they are e.g. on Iberian Peninsula, Brazil or
Indonesia.
The analysis below is based on the national emission limits. When it comes
to the direct comparison of the emission limits set by the national
authorities and the actual emissions a red warning flag must be raised:
− There are mills, which do not follow or reach the national emission
regulations for one reason or another.
− The variations and differences in methods of analysis complicate the
comparison of actual emissions.
− In several countries the local environmental circumstances must be
taken into account in environmental permitting process, and this is why
some mills might have more strict emission limits than others inside one
country.
− In several countries the mills operate better than what the regulatory
emission limits require.
− A company, which operates in a sustainable way, should act according
to the same principles in all the countries where its mills are located.
Austria
Austria has a similar system to Germany, where federal-level minimum
requirements for waste waters from different pulp and paper mills present
limits for a few parameters. Interpretation of the limits can vary locally, e.g.
what kind of exceeding of limits is clear non-compliance that requires
action (for instance if a permit limit value is exceeded in a period of ten
days, 30 days, 100 days a year). Therefore, the most recent permits tend to
include maximum daily values and maximum monthly averages.
Emissions to water
Bleached kraft. Limits for existing mills are higher than BREF. Limits for
new mills are of the same level or slightly higher than BREF.
Paper mills. The COD limits of 2-5 kg/t, valid for paper, incl. RCF based
paper, are higher than BREF, 0.5–2 kg/t. BOD and TSS limits, estimated as
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specific values (0.2–0.4 kg/t and 0.5–0.8 kg/t, resp.) are similar to BREF for
non-integrated but higher for RCF based paper.
AOX limit of 0.01–0.03 kg/t is higher than BREF, 0.005 kg/t.
Emissions to air
Bleached kraft. The dust limit, 50 mg/Nm3 is low compared to most other
countries. Proposed limits for SO2, probably referring to total S, are
approaching BREF values. The NOX limits are higher than BREF. The TRS
limit for recovery boilers, 20 mg/Nm3, is higher than in most other
countries, which regulate TRS.
Power boilers: The dust and SO2 limits are relatively low compared to
most other countries. The NOX limits at the same level as in many other
countries and in that way higher than in BREF.
Finland
Finland recently revised the environmental protection and water legislation
to implement the IPPC directive. The new Environmental Protection Act is
applied to all activities that cause or may cause environmental damage.
Simultaneously, an integrated system for environmental permits was
created where e.g. the environmental effects of the activity are estimated.
Furthermore, the requirements of environmental permits and the
prerequisites for granting a permit were defined more explicitly. However,
the permit requirements were not tightened.
The new legislation came into force on 1 March 2000. Pulp and paper mills
must apply for a new environmental permit when their existing permits
expire or at the end of 2004 at the latest. Finland set individual limits for
each mill.
Emissions to water
Bleached kraft. The lowest limits - for COD, BOD, AOX and P - are close
to the highest values of the BREF. Nitrogen is so far regulated only in few
cases. The given example shows an N limit higher than BREF.
Paper mills. Only one non-integrated paper mill is included in the report,
due to the fact that Finland has only one non-integrated fine paper mill.
COD and BOD limits are similar to BREF.
Emissions to air
Bleached kraft. Dust concentration limits are similar to or slightly lower
compared to other countries. Estimated specific value is approx. 1–2.5 kg/t,
which is higher than BREF but similar to other countries. Total sulphur
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limits of 0.7-1.5 kg S/t are comparable to Austria and Sweden and are
approaching BREF, 0.3-0.6 kg S/t. NOX limits (one mill) for bark furnace
150 mg/MJ are higher than BREF, 60–100 mg/MJ. Estimated total specific
value for kraft mills is 2–3 kg/t. TRS limits (one mill) are similar to other
countries. Estimated total specific TRS limit is 0.1 kg S/t, which is similar
to Sweden, Portugal, Indonesia and BREF, 0.1–0.2 kg S/t.
Power boilers: NOX limits, as g/MJ, are higher for biofuel and slightly
higher for fossil fuels, compared to BREF.
France
France has national guidelines for effluent discharges from different types
of paper and pulp mills covering only the main processes and a few
parameters (in kg/t). The permit procedure includes an environmental
assessment and based on this the permit authority sets the limits for each
mill. The limits are usually given in kg per ton product (daily maximum and
maximum monthly average).
The permits also limit emissions to air (mg/m3, and sometimes kg/h), in
principle based on national guidelines.
France has a system of environmental fees, based on effluent load.
Emissions to water
Bleached kraft. COD limits are much higher than BREF for softwood and
slightly higher for hardwood. BOD and TSS limits are higher/much higher
than BREF. No limits have been found for AOX, N and P.
Paper mills. COD, BOD and TSS limits are significantly higher than the
BREF values. No limits have been found for AOX, N and P.
Emissions to air
The limits are comparable to other European countries. Estimating the
concentration limits for recovery boilers as specific values gives 0.6 kg
dust/t, 2 kg S/t and 4 kg NOX/t.
Germany
Germany has federal-level minimum requirements for waste waters from
different pulp and paper mills, presenting limits for a few parameters (BOD,
COD, AOX, toxicity) in kg per ton of product and mg/l. The federal
requirements have been issued for two types of pulp mills (unbleached and
bleached sulphite) and seven types of paper mills:
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•
•
•
•
•
•
•
•
woodfree paper, unsized
woodfree paper, sized
special papers
parchment
coated woodfree
wood-containing paper (integrated with mechanical pulping)
paper based mainly on recycled fibres
asbestos paper
The states can have their own guidelines. Permit authorities can set stricter
limits, based on the environmental conditions (an EIA is usually required).
The mills have to also pay environmental fees, if certain discharge limits
are exceeded.
Emissions to air must be controlled so that the published emission limits
(mg/m3) are met, and the ambient air quality standards are not exceeded
(based on standardised calculation methods).
Emissions to water
Bleached kraft. COD limits for existing/new mills are higher/similar to
BREF. BOD and AOX are similar to BREF. Toxicity removal/absence is a
requirement not specified in the BREF. However, if biological effluent
treatment is applied, which is a BAT technique and which is a prerequisite
for reaching, for instance, the low BOD values, also an efficient toxicity
reduction is obtained.
Paper mills. COD limits and phosphorus limits (approx. 3 kg COD/t and
14 g P/t) are significantly higher than the BREF values. The BOD, AOX
and nitrogen limits are closer to BREF.
Emissions to air
Bleached kraft. The dust limit of 50 mg/Nm3 is low compared to most
other countries. Limits for SO2 are approaching BREF-values. The TRS
limit for recovery boilers, 5 mg/Nm3, is lower than in most other countries,
which regulate TRS.
Power boilers. The dust limits and SO2 limits are lower than in several
other countries.
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Italy
Bleached kraft and paper mills. Italy has only general concentration
limits, common for the whole industry. These limits are not particularly
suitable for pulp and paper mills (at present there is no bleached kraft pulp
mill in Italy). If the given limits are recalculated into specific values (as
mentioned above) we get, as kg/t:
COD
BOD
TSS
Bleached kraft
5-8
1.2–2
2.4–4
Non-integr. paper
1.6-2.4
0.4-0.6
0.8-1.2
RCF paper
1.1
0.28
0.56
Comparing these data with BREF shows a very strict Italian COD limit for
bleached kraft. The other values are on a par with BREF or more lenient.
If the same calculation were made for the nitrogen and phosphorus, the
Italian limits would be very lenient compared to BREF.
Emissions to air
Only general concentration emission limits are applied.
Power boilers. The limits for gas boilers are roughly similar to BRER
(dust, sulphur) or slightly above (NOX). The limits for oil boilers are much
above the BREF values.
Applying for instance the oil boiler limits to a kraft mill, would give similar
or higher limits compared to other countries. The limits would be much
above the BREF values.
Portugal
Emissions to water
Bleached kraft. COD, BOD and TSS limits are considerably higher than
the BREF values, particularly BOD.
Paper mills. BOD limits are at the same level as in Italy and France, but
COD and AOX limits are lower. Nitrogen and phosphorous emissions are
also regulated.
Emissions to air
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Kraft mills. Dust concentration limits are comparable to other countries,
such as Finland and Sweden. Estimated specific dust limit is 1.5 kg/t and so
definitely higher than BREF. SO2 and NOX limits are on even higher levels.
TRS limits are comparable to other countries and to BREF.
Power boilers: Dust and NOX limits for bark boilers are similar to some
other countries analysed, but definitely higher than the BREF levels for
biofuel boilers.
Spain
Emissions to water
Tables above give the old concentration standards, as well as new specific
standards for COD, TSS and AOX, according to a recent Agreement
(January 2000) between the Ministry of Environment and the Pulp and
Paper Association (ASPAPEL). The new standards reflect the transposition
of the IPPC into Spanish legislation.
Bleached kraft. The COD limit of the new Agreement, 27.5 kg/t, is only
slightly above the BREF level of 8-23 kg/t. The TSS and AOX limits are
also higher, but proportionally more than the COD limit, compared to
BREF. If the old N and P limits were still applicable (general concentration
limits, similar to the Italian limits), they would mean much more lenient
limits compared to BREF.
Paper mills. The new specific limits, according to the new Agreement, are
rather lenient, compared to the BREF levels.
Emissions to air
The general concentration limits are relatively high. Particularly the SO2
limits are on a very high level.
Sweden
The limits are based on technically and economically feasible measures on
case-by-case basis, considering the environmental conditions. The permits
normally have limit values for emissions and requirements for technical
measures (both process internal and external). The permit limits are usually
revised every ten years. It is also possible to revise them if the conditions
change significantly, or new environmental technology becomes available.
There is a set of national guidelines for emissions (kg/ton, mg/l, mg/m3) and
control measures (technology, removal requirements). The permit limits
often include maximum loads to the environment (kg/d, t/d).
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Air emissions can be regulated by limits in concentration (mg/m3), specific
load (kg/t), and load to the environment (g/s, kg/d).
Swedish permits usually include, for each parameter, one limit and one
guide value. The limit value must not be exceeded. The guide value may be
exceeded, but in that case measures must be taken to avoid repeated
violations. Limits are often annual averages, sometimes monthly averages.
Guide values are often monthly averages. Data in the tables represent the
limit values, or in some cases the guide values, if no limits are given.
Emissions to water
Bleached kraft. Newer permits do not set BOD limits; these have been
replaced by COD limits. COD, TSS, AOX and phosphorus limits of the
more recent permits are approaching the BREF levels. Nitrogen limits are
still a bit higher than BREF.
Swedish bleached kraft permits often include also limits for chlorate (if
chlorine dioxide is used in the bleaching) and for complexing agents (as
EDTA and DTPA, if such are used in ECF or TCF bleaching).
Paper mills. Considering COD, BOD, and TSS, the lowest limits are close
to BREF. Considering N and P, the few data presented are virtually within
the ranges of BAT. One P limit is extremely low, 0.5 g P/t.
AOX limits are not set for Swedish paper mills (i.e. those mills which are
not integrated with pulp bleaching plants), as the AOX emissions are very
low or negligible.
Emissions to air
Bleached kraft. Dust concentration limits are similar to other countries.
Estimated specific value is 1-2.5 kg S/t, which is in a range with most of the
other countries, but higher than BREF. Total sulphur limits of 0.6-1.5 kg S/t
are similar to Austria and Finland, and approaching BREF. TRS limits are
similar to other countries and BREF. NOX limits of 0-9-2.0 kg/t, are slightly
lower than the limits in Finland and Austria, and are approaching BREF.
Power boiler. For dust emissions, see above. SO2 is directly related to the
fuel sulphur content.
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Brazil
The Brazilian authorities tend to follow the US EPA guidelines when
setting the environmental limits to the mills. Effluent limits cover
conventional parameters and are usually expressed as maximum specific
loads (kg/t). Limits for modern mills are relatively strict.
The limits for gaseous emissions are also relatively strict for new mills.
Concentration limits are issued for main sources, and technological
requirements (e.g. collection of malodorous gases) are often presented in
the permits.
Emissions to water
The data for Brazil are not so reliable and comprehensive as for most of the
other countries. The data are also some years old. However, some
conclusions can be drawn.
Bleached kraft. There can be a large variation between the limits of
different mills. COD limits can be rather strict, also compared to the BREF
levels. Similarly, the lowest reported values of the other parameters, BOD,
TSS and AOX, approach the BREF levels. Nitrogen and phosphorus seem
not to be regulated for Brazilian mills.
Emissions to air
Bleached kraft. The data presented so far has not been verified for the
latest developments in Brazil. Large variations in limits can occur between
different mills. Dust limits of approximately 1–1.2 kg/t are quite similar to
the lowest European limits but higher than BREF. SO2 limits seem to show
large variations. TRS limits can be very low, also in relation to the lowest
European limits. NOX seems not to be regulated in kraft mills.
Canada
Emissions to water
Emissions to water are regulated on the Federal and the Provincial level.
General federal emission limits, and emission limits in some provinces, for
kraft pulp mills, are given in Table 6-6.
In addition to the general limits, stricter limits can be given in special cases,
due to the environmental conditions. Examples are given in the table. Also
colour is regulated in special cases.
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One parameter, which is always regulated in Canada, in contrary to other
countries, is Toxicity to aquatic organisms, generally fish but also other
organisms (see table).
COD is not regulated, like in the USA.
Emissions to air
Emissions to air are regulated only on the provincial level. Examples of
limit values for some provinces are given in Table 6-11 concerning kraft
mills. These regulations are not very uniform.
In some cases limits applied for existing (ex.) and new mills are given
separately.
Level A applies to new and modernized facilities. Level B applies to
facilities existing since 1977, with the exception that they would be
upgraded to level A in a reasonable time.
We have not found any emission limit values for sulphur dioxide (SO2) or
nitrogen oxides (NOx), concerning kraft mills. However, some Provinces
apply air quality objectives (e.g. British Columbia and Ontario), which
must be complied with. These include TRS, SO2 and TSP in British
Columbia, and H2S, NOx, SOx, TSP, carbon monoxide and ozone in
Ontario.
Emission limits for power boilers are applied e.g. in Quebec. These include
NOx and particulates (TSP). For instance, the NOx limit for Natural gas
boilers is 150 ppm (< 70 MW) or 200 ppm (> 70 MW). Proposed new NOx
limits for gas boilers are 26 g/GJ (3–30 MW) or 40 g/GJ (> 30 MW). The
TSP limit for wood waste boilers is 340 mg/Nm3 (> 3MW).
Indonesia
Indonesia has a fairly developed environmental permit system with
environmental impact assessments for major industrial plants. Two sets of
national wastewater standards have been issued, one, which has been
applied since the year 1995 and the other since the year 2000. The limits are
expressed both as concentration limits and as specific load (kg/t) and use of
water is limited (m3/t). The new limits have been given for seven types of
pulp mills and four types of paper mills.
There are national standards for atmospheric emissions from various
sources in a pulp mill, expressed as mg/m3. The limits are relatively lenient
compared to western standards. The permit authority can issue stricter
limits in certain areas.
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Emissions to water
The limits given in tables above are effective as of 2000.
Bleached kraft. The COD limit of 29.75 kg/t is rather strict, and
approaching the BREF level. The BOD and TSS limits are rather lean and
not at all commensurable with the COD limit. A mill complying with the
COD limit would most likely reach BOD and TSS emissions levels far
below these limits. There are no limits for AOX, N or P.
The concentrations are also regulated, and the specific limits are valid for a
certain stated specific water consumption (85 m3/t). If lower water
consumptions were applied, it could possibly mean reduced specific limits.
For instance, assuming water consumption of 50 m3/t, the COD limit would
be 17.5 kg/t, which is very strict. The BOD and TSS limits would be 5 kg/t,
which are still rather lenient.
Paper mills. We interpret the limits for “bleached papers” (which include
fine papers and other bleached papers) as valid for non-integrated paper.
The limits according to must be regarded as very lenient, e.g. the COD limit
is 5.6–10 kg/t depending on the paper type. However, also the
concentrations are regulated, and the specific limits are valid for certain
stated specific water consumptions (50 and 35 m3/t for the two paper
categories). If lower water consumptions were applied, it could possibly
mean reduced specific limits. For instance, assuming 15 m3/t for both paper
categories, the specific COD limits would be reduced to 2.4–3 kg/t.
However, this is still rather lenient.
No special limits seem to be given for paper mills, based of RCF without
deinking.
Emissions to air
Bleached kraft. Dust limits higher than the normal European standard are
applied. The concentration limits presented would correspond to 2.5 kg/t.
Concerning total sulphur and NOX there does not seem to be any particular
limit for kraft mills. TRS limits similar to the European standard are
applied.
Power boilers. The dust and NOX limits are higher than those of all the
other countries. The NOX limit of 100 mg/Nm3 correspond to
approximately 350mg/MJ. Also the SO2 limit is relatively high.
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USA
The US system for regulating water and air emissions from the pulp and
paper industry is rather complicated, and shall not be described in detail
here. The main parts of this system, concerning water and air emissions, are
combined in the “Cluster Rule”, promulgated in April 1998. Some of the
more important issues, required for comparisons with the other countries,
will be pointed out.
The limits are based on the following thinking:
•
Best Practicable Control Technology Currently Available (BPT) must
be used by all dischargers of waste waters, when basic parameters are
concerned (BOD, TSS and pH)
•
Best Conventional Pollutant Control Technology (BCT) can be required
(for BOD and TSS), if it can be justified (in practice usually the same as
BPT)
•
Best Available Technology Economically Achievable (BAT) must be
used to control toxic and non-conventional pollutants
•
New Source Performance Standards (NSPS) are used for new plants,
based on best available technology
The Cluster Rule, regarding air pollution control, does not set limit values
for certain pollutants (as far as we have found), but rather requires the use
of certain technologies. The basic aim is to reduce the emissions of HAPs
(Hazardous Air Pollutants). The main source of HAPs is methanol, and in
the case of bleaching also chlorine and its compounds are included. The
reduction of HAP emissions was regulated already in the 1990 Clean Air
Act Amendments, which included the NESHAPs (National Emission
Standards for Hazardous Air Pollutants).
Air emission standards are developed under three MACT “groupings”
(MACT = Maximum Achievable Control Technology) as follows:
– MACT I. Applies to chemical and semi-chemical pulp mills. For kraft
mills it regulates HAP emissions from pulping, bleaching, waste water and
condensate emission sources.
– MACT II. Applies to chemical pulping combustion sources. For kraft
mills: recovery boilers, smelt dissolving tanks, lime kilns. MACT II is on
the proposal stage, not yet promulgated (1999).
– MACT III. Applies to paper machines, mechanical pulping, secondary
fibres and non-wood pulp mills, which use chlorine or chlorine dioxide for
bleaching.
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MACT I requires the collection and incineration of HAP containing gases
from the sources mentioned above. Methanol and other organics, as well as
TRS, will be reduced, thus also an odour reduction will be reached. The
requirement is a 98 % removal of the HAPs. The rule differs between
LVHC (low concentration) and incineration unit (separate unit, or the lime
kiln, the recovery boiler or another boiler). LVHC systems must be handled
within 3 years, or 6 years if the mill enrols in the VAT Program (Voluntary
Advanced Technology Incentive Program). HVLC systems must be handled
within 8 years.
In bleaching systems also enclosure and gas collection for HAP emitting
units is required, followed by scrubbing of the collected gases. A 99 %
HAP removal is required, or less than 10 ppmv in the outlet, or less than
0.001 kg HAP/t pulp.
MACT III requires basically the same type of treatment and treatment level
for off-gases as the bleaching systems of MACT I.
MACT II will regulate the emissions of PMHAP (particulate matter HAPs)
and TGO (total gaseous organic HAPs) from the units mentioned above.
Air emission limits are, in practice, set individually for each mill. Tables 217 and 2-19 show examples for bleached kraft mills and power boilers.
Low concentration sources have to be enclosed and vented to a gas
collection system, followed by an incineration unit (separate unit, or the
lime).
So, the Cluster Rule is a comprehensive regulatory package with listing of
required BAT/MACT technologies (e.g. 100 % substitution of chlorine
dioxide, efficient biological wastewater treatment, collection of noncondensable gases), alternatives to comply with BAT/MACT level,
incentives for mills to choose advanced technology alternatives, maximum
emissions from several sources, a requirement to prepare and implement a
best management practices (BMP) plan, and specific requirements for
monitoring and reporting.
Emissions to water
Compared to most other countries, one obvious difference is that COD is
not at all regulated in the Cluster Rule. COD regulations will probably be
added later on.
The Rule usually gives limits as daily and monthly averages. In the tables
we have given the lower monthly values.
Bleached kraft. For mills existing when the Cluster Rule was promulgated,
the basic BPT rule (Best Practicable Technology) gives BOD and TSS
limits, which are very lenient compared to the other countries. For newer
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mills (according to special definitions), the NSPS rule (New Source
Performance Standards) gives stricter limits, e.g. BOD within 2.41–5.5 kg/t.
The BAT rule is applied for 100 % chlorine dioxide substitution, with two
cases: BPT, without extended delignification or oxygen prebleaching, and
NSPS, with extended delignification or oxygen prebleaching. The BAT rule
regulates emissions of chlorinated compounds. The basic AOX limit of
0.623 kg/t (BPT) is rather lenient, while the corresponding NSPS limit of
0.27 kg/t is more comparable to the other countries.
According to the so called VAT program (Voluntary Advanced Technology
Incentive Program), mills can voluntarily accept lower AOX limits at three
levels, Tier 1, 2 or 3, which give longer compliance times (6, 11 or 16 years
after promulgation of the Cluster Rule, instead of the normal 3 years). The
Tiers 2 and 3 give AOX limits of 0.1 and 0.05 kg/t (annual averages), well
comparable with the BREF level (<0.25).
The BAT rule also includes limits for 11 chlorinated compounds (incl. e.g.
TCDD, TCDF, chloroform and chlorophenols) in the bleach plant effluent,
9 of which shall be below the detection limit. This is not valid for TCF
based mills, but these have an AOX limit for the combined effluent of 20
micrograms per litre.
The BMP rule (Best Management Practices), requires chemical pulp mills
to install equipment and take measures to reduce, collect and recycle liquor
spills.
Paper mills. The BPT and NSPT rules apply also to paper mills. The BOD
and TSS limits are quite lenient. Limits for two types of chlorinated phenols
are valid at mills using chlorophenolic type biocides.
Emissions to air
Bleached kraft. Dust emission limits as total specific values of 1.5-2.5
kg/t, are within or slightly above the ranges of the other countries, where
such limits can be identified. For the other countries this range is
approximately 1-2.5 kg/t. Total sulphur limits are relatively high, 2-6 kgS/t.
NOx limits are medium to relatively high, 1.5–4 kg/t. TRS limits can be on
quite low levels, comparable with the lowest European standard.
Power boilers. Variations in limit values are extensive. In some cases
quite low limits can be applied, comparable to the lowest European
standards.
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6.4
The Significance of Environmental Issues for the Pulp
and Paper Industry
Environmental issues are increasingly important for the pulp, paper and
board industry. This is true both in terms of cost - as expenditure in
equipment, training and research - and as a competitive factor in the
marketplace. The driving forces of this development can be found among
all stakeholders of the industry, e.g. among clients, general public
(including NGOs), financiers and authorities alike.
Environmental performance of the Western European pulp, paper and board
industry as a whole is clearly better than that of the competing regions.
Significant investments in environmental protection have been carried out
in Western Europe. In many other parts of the world standards in
environmental management, production facilities, and enforcement of
environmental legislation are on a much lower level.
In an assessment of environmental issues, the whole environmental life
cycle should be covered. The life cycle begins from the forest and extends
via production all the way to end use and final disposal of products. In Fig.
2-46, one key factor is chosen from each of the major life cycle stages.
Development of forested area is related to raw material procurement.
Wastewater discharges are the main issue in the production stage. Recovery
rate is an indicator of final disposal and waste management.
These factors related to environmental issues and competitiveness are
presented in the group map below. The area of the bubble is proportional to
the pulp, paper and board production in each region, whilst colour coding is
used to highlight effluent discharges. Green means lowest discharges per
ton produced, yellow and orange are the following categories, and red
signifies the largest discharges.
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Figure 6-1
Group Map on Environmental Issues and Competitiveness
55
50
Europe
Colour of the
bubble = waste
water discharges
45
Paper
recovery
rate, %
40
North America
35
Latin America
30
Size of the bubble
= production
Asia, excl. Japan
25
20
-12
-10
-8
-6
-4
-2
0
2
4
6
Change in forested area (1980-1995), %
Note: Change in forested area from all causes, both natural and directly influenced by man. Human
induced changes include clearing for agriculture, urban development and infrastructure as well as
afforestation and deforestation from forestry activities.
The high environmental know-how and awareness, high environmental
performance and the developed forest management and protection in
Europe, are environmental competitiveness assets for the European forest
industry. However, some national restrictions (with hidden costs) and
impaired competitiveness against for example non-Kyoto bound developing
countries can be seen as a threat to the European companies. Still,
globalisation can make the situation more even, if the same high
environmental standards are implemented world wide on imports, exports
and production.
(Source: Competitiveness of the European Pulp, Paper and Board Industries. Survey
conducted by Jaakko Pöyry Consulting to former EU DG III)
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7
CONCLUSIONS FOR ANALYTICAL OVERVIEW –
THE SWOTS
From the general background a grade-specific focus and SWOTs have been
processed.
Figure 7-1
General to Grade-specific to SWOTs
General
to
Grade-specific
to
Grade SWOTs
WLC
WLC/containerboard
General
General
background
background
O
S
W
T
Kraft pulp
Copy
Copypaper
paper
Technology distribution
Current environmental regulation
Differences in environmental performance
The strengths and weaknesses in the following three SWOTs by grade refer
to the present status of the European industry in comparison to nonEuropean producers/producing countries in the same grade. The threats and
opportunities relate to the potential development in the future. There are
major differences even within European countries and between the
producers within any European country. Therefore, some of them do not
have the same strengths and weaknesses as the majority. Also, each of them
is likely to view the threats and opportunities in a slightly different way and
would have a different view as to which are the most important ones from
their own perspective.
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7.1
Bleached Kraft Pulp
High productivity and an integrated industry structure together with links to
other branches of the forest industry cluster are vital for the future
production of kraft pulp in Europe. New, efficient and environmentally
adapted mills in Europe have so far been able to compete with imports.
However, the situation may well change. Further consolidation and
restructuring, wood imports and lower pulpwood prices are needed to
maintain the current role of kraft pulp production in Europe. For
information behind the SWOTs see for example chapters Structure and
Performance (3), Trends (5) and The Current Environmental Regulation in
European Countries and Their Key Competitor Countries (6).
Figure 7-2
OPPORTUNITIES
- further consolidation
- R&D and possible
technological
breakthroughs in closed
water cycle mills
- softwood pulpwood surplus
in Europe
- increasing environmental
pressure on competitors
-market growth of specialty
paper grades
STRENGTHS
- high productivity
- high energy efficiency
- high integration level
- co-operation in R&D
between producers and
machinery suppliers
- grade/quality mix
- high environmental
standards
WEAKNESSES
THREATS
-high wood costs
-high labour and social costs
-small older mills in Central
Europe
-high taxes, and capital costs
at newer mills
- higher wood costs
- higher labour and social
costs
- subsidised wood markets
- growing low price imports
- exaggerated
environmental requirements
- loose and flexible
enforcement of the cluster
rules in the US.
-hardwoord shortage in
Western Europe
-insufficient hardwood resources (esp. Nordic area)
The loose and flexible enforcement of the environmental regulations
mentioned as a threat refers to both the possibility that Europe will have
more stringent regulations than some of the competing countries (and,
therefore higher capital and/or production costs) and to the possibility that
whatever the regulations are, some of the legislators/officials allow, in
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practice, more flexibility than in Europe in order to e.g. alleviate the
unemployment problems of a remote region. Similarly, the exaggerated
environmental regulations mentioned as a threat to Europe, refers to more
stringent regulations and/or time-table for environmental criteria in Europe
than in its competing countries leading to a substantial loss of
competitiveness.
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7.2
Copy Paper
In uncoated woodfree paper production, Europe has been forced into a
defensive position by low cost producers in South America. Co-operation
between European and Asian or Latin American producers could be
considered one way of maintaining the viability of European production.
For information behind the SWOTs see for example chapters Structure and
Performance (3), Trends (5) and The Current Environmental Regulation in
European Countries and Their Key Competitor Countries (6).
Figure 7-3
OPPORTUNITIES
- further integration of pulp
and paper production
- consolidation
- development of
intermodal cargo carriers
and TENs
- co-operation between
European and Asian
producers
- niche products
STRENGTHS
-eucalyptus plantations in
Portugal
-high level of integration in
the Nordic countries
-functional Nordic pulp
injection to Central Europe
-production know-how,
quality, specialisation
-high environmental standards and logistics
-growing European market
-closeness to market
(world’s largest)
WEAKNESSES
THREATS
- high wood costs
- high labour costs
- high chemical costs
- high taxes (notably VAT)
and social costs
- fragmentation of the sector
- growing imports
- higher wood costs
- higher labour and social
costs
- exaggerated
environmental requirements
- loose enforcement of
environmental regulations in
competing regions
The loose and flexible enforcement of the environmental regulations
mentioned as a threat refers to both the possibility that Europe will have
more stringent regulations than some of the competing countries (and,
therefore higher capital and/or production costs) and to the possibility that
whatever the regulations are, some of the legislators/officials allow, in
practice, more flexibility than in Europe in order to e.g. alleviate the
unemployment problems of a remote region. Similarly, the exaggerated
environmental regulations mentioned as a threat to Europe, refers to more
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stringent regulations and/or time-table for environmental criteria in Europe
than in its competing countries leading to a substantial loss of
competitiveness.
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7.3
White-lined Chipboard
White-lined chipboard has a dominant position among cartonboard grades
in continental Europe, due to high primary fibre costs and good availability
of recovered paper. Asia is also a major producer of WLC.
One of the main functions of cartonboards is market communication, an
attractive outlook of a product to back up brand image. However, there is
considerable pressure to eliminate secondary packaging, and cartonboards
are used usually in secondary packaging combined with primary packed
glass, aluminium or plastics. For information behind the SWOTs see for
example chapters Structure and Performance (3), Trends (5) and The
Current Environmental Regulation in European Countries and Their Key
Competitor Countries (6).
Figure 7-4
OPPORTUNITIES
STRENGTHS
-new products/applications
eg fast food
- export to Eastern Europe
-WLC technological edge in
Europe
- high recovery rate
WEAKNESSES
THREATS
-periodically high recovered
paper costs
-general trend to reduce
packaging volumes and
weight of cartonboards
- fragmentation of the sector
-growing imports from Asia
-loose enforcement of
environmental regulations in
competing regions
- deteriorating recovered
paper quality
The loose and flexible enforcement of the environmental regulations
mentioned as a threat refers to both the possibility that Europe will have
more stringent regulations than some of the competing countries (and,
therefore higher capital and/or production costs) and to the possibility that
whatever the regulations are, some of the legislators/officials allow, in
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practice, more flexibility than in Europe in order to e.g. alleviate the
unemployment problems of a remote region.
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8
THE ENVIRONMENTAL REGULATION ARISING
FROM IPPC
In the following text current emission limits described in Chapter 6 The
Current Environmental Regulations in European Countries and Their Key
Competitor Countries are compared to the reference values given in the
BAT BREF. All EU countries must have ratified the IPPC Directive by
October 1, 1999. This means that every country must adapt their
environmental laws and local guidelines to the Directive but it does not
mean that all the European pulp and paper mills would have the same
threshold limits as the reference values given in the BAT BREF.
Please note that as in the Chapter 6, this analysis is based on the national
emission limits. The emission limits set by the national authorities and the
actual emissions are not always comparable between countries and regions:
− There are mills, which do not follow or reach the national emission
regulations for one reason or another.
− The variations and differences in methods of analysis complicate the
comparison of actual emissions.
− In several countries the local environmental circumstances must be
taken into account in environmental permitting process, and this is why
some mills might have more strict emission limits than others inside one
country.
− In several countries the mills operate better than what the regulatory
emission limits require.
− A company, which operates in a sustainable way, should act according
to the same principles in all the countries its mills are located.
Austria: The Austrian limits for emissions to water could probably be
adjusted, if required, to the BREF levels without serious problems.
Proposed total sulphur limit for kraft mills reaches BREF value for new
mills. Proposed NOx limit for kraft mills is higher than BREF values.
Finland: The Finnish authorities are probably approaching the BREF levels
in their permitting. Limits for dust and NOx are comparable to other
countries, but both are usually higher than BREF values. Total S and TRS
limits seem to be approaching BREF.
France: It seems that France in general has more lenient standards,
compared to other European countries and compared to the EU/BREF.
Germany: Particularly the COD and P limits for paper mills would have to
be sharpened a bit to get closer to BREF. The toxicity limit means legally a
stricter regulation than what is applied in the other European countries. The
limits for emissions to air are relatively similar to Austrian limits. The dust
limit is low compared to most other countries. Limits for sulphur, both SO2
and TRS, are also relatively low.
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Italy: Italian legislation will require an extensive revision, in order to
become adapted by the IPPC system.
Portugal: The situation is similar to France, i.e. more lenient standards,
compared to other European countries and BREF. The Portuguese
regulations obviously need to be adapted to the IPPC system.
Spain: Spain has adapted the legislation to the IPPC system. Some
emission limits are, however, rather lenient compared to the BREF levels.
The COD limit for bleached kraft can be regarded as rather strict. Reaching
this COD level is relatively expensive and will most likely also reduce the
TSS and AOX emissions below the given limits. As far as we have found,
the Spanish air emission regulations are not yet adapted to the IPPC system,
in contrary to the regulations concerning emissions to water.
Sweden. Our conclusion is that the Swedish authorities are clearly
approaching the BREF levels when giving new permits. Dust limits are
similar to other countries, but higher than BREF. Limits for total sulphur,
TRS and NOX are approaching BREF.
Brazil: The individual limit setting obviously results in quite large
variations, similar to what is the case in Finland and Sweden. The lowest
values clearly approach or reach the BREF levels, while other values are
considerably higher. No nitrogen or phosphorus limits seem to be set, in
contrary to e.g. Sweden and Finland. When it comes to emissions to air, in
some cases the European standard limits can obviously be applied, in other
cases even stricter.
Canada: The limits for the conventional parameters can be regarded as
rather lenient compared to some of the other countries, and very lenient
compared to the BREF levels.
Indonesia: Both concentrations and specific emissions are regulated, but it
is not clear if both must be fulfilled simultaneously. The COD limit for
bleached kraft is rather strict. Reaching a strict COD level is relatively
expensive and will most likely also reduce the BOD and TSS emissions
below the given limits. This situation is similar to Spain. The COD, BOD
and TSS limits for paper mills must be regarded as very lenient. The
Indonesian limits for emissions to air are in general quite lenient compared
to the other countries, and particularly to the BREF values. However, the
actual emissions of some of the newer mills in Indonesia are probably much
lower than the limits.
USA: As long as no COD limits have been set, the limits for the
conventional parameters (now only BOD and TSS) can be regarded as
rather lenient compared to some of the other countries, and very lenient
compared to the BREF levels. For bleached kraft the basic AOX limit is not
very strict, but the Tier 2 and Tier 3 limits are comparable to BREF. No
limits for nitrogen and phosphorus are given, which can be regarded as very
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lenient compared to some of the other countries. Limits for emissions to air
show large variations between mills. Also relatively low limits can be
applied, comparable with the low European emission levels. The limits are
not reaching the low BREF levels, except in some cases for TRS and for
power boilers dust, SO2 and NOX limits. The MACT 1 rule includes
basically the standard technology for reducing odour emissions applied
today at modern kraft mills. The bleach plant components of MACT 1 for
reducing chlorine/chlorine compound emissions can also be regarded as
standard technology at modern kraft mills.
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Figure 8-1
Comparison between Bleached Kraft Pulp Emission Limit Values in Different Countries
and the BAT BREF Document
For power boiler emissions (used in pulp, paper and board mills), see figure 8-2
EMISSIONS TO WATER
BRA
IDN
FRA
PRT
USA
CAN
SPA GER
FIN AUT
SWE
BAT BREF
limit values
EMISSIONS TO ATMOSPHERE
SPA
PRT
FRA
IDN
USA
CAN
AUT FIN
BRA
GER
SWE
AUT
FIN
GER
SWE
BAT BREF
limit values
TOTAL
IDN
PRT
SPA
FRA
USA
BRA
CAN
BAT BREF
limit values
Figure 8-2
Comparison between Copy Paper and White-lined Chipboard Emission Limit Values in
Different Countries and the BAT BREF Document
EMISSIONS TO WATER
USA IDN
BRA
FRA
SPA
ITA
PRT
GER AUT
FIN
SWE
BAT BREF
limit values
EMISSIONS TO ATMOSPHERE (POWER BOILER)
IDN
SPA
PRT
ITA
BRA
FRA USA SWE
GER AUT
FIN
BAT BREF
limit values
TOTAL
IDN
SPA BRA USA FRA
PRT ITA
GER AUT
FIN
SWE
BAT BREF
limit values
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9
BASIC COSTS FOR INDIVIDUAL BAT MEASURES
In this section, only BAT techniques used to decrease emissions to water
and atmosphere are dealt with. However, according to the integrated
approach generation of solid waste, energy consumption and use of
hazardous chemicals should also be studied. Unfortunately, there are only
little data available on these three subjects and the quality of the data is not
always good. This is why we have excluded these environmental factors
from this study.
We would like to point out, that Jaakko Pöyry Consulting has found in its
earlier studies, that there is a missing or weak link between BAT techniques
described in the BAT BREF and the limit values presented in the same
document. Logically, if a mill uses 95-100 % of the BAT techniques listed
and is well managed otherwise, it should achieve the BAT ranges.
However, this is not the case in reality.
The following investment costs are based mainly on Jaakko Pöyry cost
data. Some of the data presented in the EU BREF document have also been
used. Costs have been given as Euro, at a rate corresponding to the
Euro/USD rate in August 2000, approximately 1.12 Euro/USD.
9.1
Bleached kraft pulp
Figure 9-1 shows a list of “BAT techniques” presented in the BAT BREF
and investment costs for the techniques. All costs shall be regarded as
approximate, typical costs. Costs are given as million Euros. It should be
noted that investment costs depend always on the size of the mill. Costs
presented below are most suitable for a mill size of 1500 ADt/d.
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Figure 9-1
BAT Techniques and Their Investment Costs for Bleached Kraft Pulp Mill
Producing 1500 ADt/d
Dry debarking
Extended / modified cooking
Closed screening
Oxygen delignification
Closed washing and screening
New ECF
New TCF
Bleach plant water system closure
Scrubbers for recovery boiler
Scrubbers for lime kiln
Scrubbers for power boiler
Increased black liquor evap.
Black liquor spill coll. and rec.
Condensate treatment
Coll. of strong malod. gases
ESP, recovery boiler
ESP, lime kiln
ESP, bark boiler
NOx control, recovery boiler
NOx control, lime kiln
Million Euro
NOx control, bark boiler
Coll. of weak malod. gases
0
10
20
30
40
50
Comments:
Dry debarking: new dry debarking plant
Extended or modified cooking:
•
Modification of existing system 5–6 M Euro
•
The above with extended washing 8–11 M Euro
Closed screening:
•
Closed screening can be regarded as a standard installation in any new mill.
•
Closed screening installed in existing mill 7–9 M Euro
Oxygen delignification: 2-stage oxygen delignification plant
Closed washing and screening or reduced carry-over of COD to bleach plant:
costs are very site specific. Costs presented are for installation in an existing
plant.
New ECF plant, for example QZ PO D D, including ozone and chlorine dioxide
plants.
New TCF plant, for example Q OP QZ PO including ozone plant
Bleach plant water system closure: the cost is very site specific. Measures can
include just simple rearrangement of piping, pumps etc. to more or less extensive
changes of equipment. So cost variations can be extensive.
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Installation of scrubbers for SO2 removal for recovery boiler, lime kiln and power
boiler are presented separately. Note that if bark is fired, power boiler does not
normally need a scrubber.
Increased black liquor evaporation: dry solids increase from 63 to 75 %.
Black liquor spill collection and recovery: the cost is very site specific and would
be higher at an existing compared to a new mill.
•
New mill, approx. 2 M Euro
•
Additional investment in evaporation may be required in some cases, approx.
5 M Euro
Condensate treatment: turpentine recovery and steam stripping
Collection and incineration of concentrated (strong) malodorous gases: collection
of gases and incineration in separate burner with a scrubber.
•
New mill 3–4 M Euro
•
Cost for an existing mill would be higher.
Dust control by ESP for a recovery boiler, lime kiln and bark boiler are presented
separately.
Primary and Biological waste water treatment:
•
Investment cost 25–30 M Euro (the share of primary treatment is about 20-25
% of the total investment)
•
Operation cost 3.5–6 Euro/t (the share of primary treatment is about 30 % of
the operational costs)
NOX control: arrangement of burners, special instruments etc for a recovery
boiler, lime kiln and bark boiler are presented separately.
Collection and incineration of diluted (weak) malodorous gases: collection of
gases and incineration in a lime kiln. Costs presented are for a new mill. Cost for
an existing mill would be higher.
Simple cost estimations for different plant sizes are usually made with the
help of a scale coefficient (k). The relation between plant sizes V1 and V2,
and the corresponding investments costs C1 and C2 is as follows:
C1/C2 = (V1/V2)^k
i.e. the ratio between C1 and C2 is equal to the ratio between V1 and V2
raised to the power k.
The coefficient k varies between plant types, equipment types, plant sizes
etc., but is normally < 1.
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Below are estimated costs for the mill size of 1000 ADt/d. All costs shall be
regarded as approximate, typical costs.
Table 9-1 Estimated costs of selected techniques for a kraft pulp mill size of 1000 ADt/d
Dry debarking: New dry debarking plant
Extended/Modified cooking
Modification of existing system
D:o with extended washing
Closed screening:
Closed screening can be regarded as a
standard installation in any new mill.
Closed screening installed in an existing mill
Oxygen delignification: 2-stage oxygen
delignification plant
Closed washing and screening/ Reduced
carry-over of COD to bleach plant: Costs
are very site specific. For installation in an
existing plant the following cost level is
estimated
ECF or TCF Bleaching:
New ECF plant ex. QZ PO D D incl. ozone
and chlorine dioxide plants
New TCF plant ex. Q OP QZ PO incl. ozone
plant
Bleach plant closure: The cost is very site
specific. Measures can include just simple
rearrangement of piping, pumps etc. to
more or less extensive changes of
equipment.
Installation of scrubbers for SO2 removal
Recovery boiler
Lime kiln
Power boiler, if bark is fired, does not normally
need a scrubber. If needed the estimated cost
would be
Increased black liquor evaporation: Dry
solids increase from 63 to 75 % would give
the additional investment
Black liquor spill collection and recovery:
The cost is very site specific. Would be
higher at an existing compared to a new
mill.
New mill, approx.
Additional investment in evaporation may be
required in some cases.
Condensate treatment: Turpentine
recovery and steam stripping
Collection and incineration of concentrated
(strong) malodorous gases: Collection of
gases and incineration in a separate burner
with a scrubber.
New mill.
12 – 16 MEuros
4 – 5 MEuros
6 – 9 MEuros
5.5 – 7 MEuros
14 – 18 MEuros
8 – 12 MEuros
35 MEuros
25 – 30 MEuros
1 – 8 MEuros
3 – 4 MEuros
1 MEuros
2 MEuros
1.2– 2.5
MEuros
2 MEuros
4 MEuros
2 MEuros
2.5 – 3.5
MEuros
Cost for an existing mill would be higher.
Dust control by ESP:
Recovery boiler
5 – 7 MEuros
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Lime kiln
Bark boiler
1 – 2 MEuros
2 – 3 MEuros
Investment costs (the share of primary
treatment is about 20-25 % of the total
investment)
Operation costs (the share of primary
treatment is about 30 % of the operational
costs)
20 – 25 MEuros
Recovery boiler
Lime kiln
Bark boiler
1.5 – 2 MEuros
0.5 – 1 MEuros
0.5 – 1 MEuros
New mill.
Cost for an existing mill would be higher.
0.5 – 1 MEuros
Primary and biological waste water
treatment:
3.5 – 6 Euro/t
NOX control: Arrangement of burners,
special instruments etc.
Collection and incineration of diluted
(weak) malodorous gases: Collection of
gases and incineration in lime kiln:
9.2
Copy paper and WLC board
The figure below shows a list of “BAT techniques” presented in the BAT
BREF and investment costs for the techniques. All costs shall be regarded
as approximate, typical costs, unless stated otherwise. Costs are given as
million Euros. It should be noted that investment costs depend always on
the size of the mill. Costs presented below are most suitable for a mill size
of 1000 ADt/d of paper/board. WLC board is assumed to be based on
recycled, non-deinked fibre. For measures concerning a power boiler, see
bleached kraft pulp.
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Figure 9-2
BAT Techniques and Their Investment Costs for Copy Paper and WLC Mills
Producing 1000 ADt/d
Counter current flow of water
Internal white water treatment
Increased white water storage capacity
Separate waste water collection
Install meters and automation
Minimization of fresh water consumption
Optimization of dryness after press
Pretreatment of coating wastewaters
Primary and biological w.water treat.
Primary and chemical w.water treat.
Million Euro
Substitution of pot. harm. chemicals
Internal treatment of white waters
0
2
4
6
8
10
Counter current flow of water/ maximum recycling of process water: costs are
very site specific. Typical costs cannot be given. One example from a practical
case: 1 M Euro.
Internal white water treatment or reduction of material losses and fresh water use:
costs are very site specific. Typical costs cannot be given. Examples from
practical cases: 1–3 M Euro. The higher figure includes one new disc filter of
about 2 M Euro.
Increased white water storage capacity or reduction of accidental discharges:
costs are very site specific.
Separate wastewater collection: costs are very site specific. Typical costs cannot
be given. Examples from practical cases: 0.5–1 M Euro.
Install meters and automations: measures are usually profitable, payback time
may be 1 year. Costs are very site specific.
Minimization of fresh water consumption: costs are very site specific. Typical
costs cannot be given.
Optimisation of dryness after press or reduction of steam consumption for drying:
installation of a shoe press.
Pretreatment of coating wastewaters for coating colour recovery: We assume
treatment by ultra-filtration. Payback time of investment approx. 1–2 years.
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Primary and biological wastewater treatment: cost will be higher for WLC board,
as the BOD/COD emission is higher than that of copy paper.
Investment costs:
•
Copy paper 5–7 M Euro (the share of primary treatment is 25 %)
•
WLC board 7–9 M Euro (the share of primary treatment is 20 %)
Operation costs:
•
Copy paper 1–2 Euro/t (the share of primary treatment is 58 %)
•
WLC board 1.5–3 Euro/t (the share of primary treatment is 50 %)
Primary and chemical wastewater treatment: investment cost will be
approximately the same for copy paper and WLC board.
Investment costs: 3–4 M Euro (the share of primary treatment is 75 -80 %)
Operation costs
•
Copy paper 1.5–3 Euro/t (the share of primary treatment is 30 %)
•
WLC board 2–4 Euro/t (the share of primary treatment is 45 %)
Substitution of potentially harmful chemicals by less harmful ones: this type of
measure will require very limited or negligible investment costs. Costs for
development work may be characterized as investment costs here. There may be
additional operation costs, if new chemicals are more expensive than older ones.
However, no cost data can be given here.
Internal treatment of white water by membrane filtration (ultra- or nano-filtration) to
facilitate increased recycling of water: following costs assume treatment of
3
10 m /ton paper.
•
Investment costs: 4 M Euro
•
Operation costs: 0.2-0.3 Euro/m
3
Simple cost estimations for different plant sizes are usually made with the
help of a scale coefficient (k). The relation between plant sizes V1 and V2,
and the corresponding investments costs C1 and C2 is as follows:
C1/C2 = (V1/V2)^k
i.e. the ratio between C1 and C2 is equal to the ratio between V1 and V2
raised to the power k. The coefficient k varies between plant types,
equipment types, plant sizes etc., but is normally < 1.
Below are estimated costs for a mill size of 750 ADt/d. All costs shall be
regarded as approximate, typical costs, unless stated otherwise. WLC board
is assumed to be based on recycled, non-deinked fibre.
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Table 9-2 Estimated costs of selected techniques for a copy paper or WLC mill size of 750 ADt/d
Counter current flow of water/maximum recycling of process
1 MEuros
water: Costs are very site specific. Typical costs cannot be given.
One example from a practical case:
1 – 3 MEuros
Internal white water treatment/Reduction of material losses and
The higher figure
fresh water use: Costs are very site specific. Typical costs cannot
includes one new disc
be given. Examples from practical cases:
filter of about 2
MEuros
0.5 – 1 MEuros
Increased white water storage capacity/ Reduction of accidental
discharges: Costs are very site specific. Typical costs, approx.
level:
Separate waste water collection: Costs are very site specific.
0.5 - 1 MEuros
typical costs cannot be given. Examples from practical cases:
Install meters and automations: Measures are usually profitable,
payback time may be 1 year.
Costs are very site specific. Typical costs, approx. level:
0.5 – 1 MEuros
Minimization of fresh water consumption: Costs are very site
specific. Typical costs cannot be given.
Optimisation of dryness after press/Reduction of steam
4 – 9 Meuros
consumption for drying: Installation of a shoe press.
Pretreatment of coating wastewaters for coating colour recovery:
1.5 – 2 Meuros
We assume treatment by ultra-filtration. Pay-back time of
investment approx. 1 – 2 years.
Primary and biological wastewater treatment: Cost will be higher
for WLC board, as the BOD/COD emission is higher than for
copy paper.
Investment costs:
4.5 – 6 MEuros
Copy paper
6 – 8 MEuros
WLC board
Operation costs:
Copy paper
1 – 2 Euro/t
WLC board
1.5 – 3 Euro/t
Primary and chemical wastewater treatment: Investment cost will
be approximately the same for copy paper and WLC board
.
Investment costs
2.5 – 3.5 MEuros
Operation costs:
1.5 – 3 Euro/t
Copy paper
2 – 4 Euro/t
WLC board
Substitution of potentially harmful chemicals by less harmful ones:
This type of measure will require very limited or negligible
investment costs. Costs for development work may be
characterized as investment costs here. There may be additional
operation costs, if new chemicals are more expensive than older
ones. However, no cost data can be given here.
Internal treatment of white water by membrane filtration (ultra- or
nano-filtration) to facilitate increased recycling of water: Following
3
costs assume treatment of 10 m /ton paper.
Investment costs
3 - 4 MEuros
3
Operation costs
0.2-0.3 Euro/m
Combined heat and power plant: Typical costs cannot be given,
Investment costs
45 MEuros
the cost depends of the size of the plant. As an example a plant
of 60 MW:
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10 COST OF COMPLIANCE
This chapter describes the potential impact of BAT on competitiveness of
Europe within the three product groups is reviewed.
Figure 10-1 gives the structure of the following two chapters. Note how the
chapters combine elements from the previous discussion.
Figure 10-1
IPPC/BAT-type Legislation vs. Hypotheses, Cost of Compliance and Competitiveness
Factors
International comparison
WLC/containerWLC/containerboard
board
Verify
hypotheses
H0..H9
Kraft
Kraftpulp
pulp
Copy
Copypaper
paper
Intra-EU comparison
European
pulp and
paper
industry
(the three focus
grades)
The competitors to
the European pulp and
paper industry (the three
focus grades)
Estimate cost
of compliance,
and impacts
of
- specialisation
- R&D
- skills
- innovation
- age of technology
- demand side
on competitiveness
10.1 Factors Influencing the Cost of Compliance and
Competitiveness
Below, a rough listing of the impact of the some factors that have an impact
on the cost of compliance and competitiveness is presented. Bleached kraft
pulp, copy paper and WLC are covered simultaneously, even if there may
be some differences.
Freight costs play a fairly large role in competitiveness as does the size of
the home market. Mills with a large part of their sales to a large, close-by
home market have a competitive edge over those who need to sell their
production in distant markets. Also, it is easier to follow the home market
development for compliance issues than a large number of foreign markets,
which may set standards of their own for imported products. Thus, overall,
“home-market” producers tend to have a competitive edge in general
compliance costs over the “exporters” even if the regulations as such may
appear to be similar for both.
Nordic countries:
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Specialization: increases the cost of compliance and does not improve
competitiveness very much (home markets for specialised products too
small, economies of scale impact low)
R&D: level high, lowers the cost of compliance and improves
competitiveness (further)
Skills: same as R&D
Innovation: same as skills & R&D
Age of technology: in general low thus lowers the cost of compliance and
improves the competitiveness
Demand side factors: as major markets far away and sometimes with a
different set of standards, cost of compliance goes up and competitiveness
is reduced
Continental Europe:
Specialization; increases the cost of compliance. With a large “home”
market for specialized products, it can, however, be worth the while,
particularly for otherwise uncompetitive units, as the increased costs can be
covered by the value added
R&D; level high, lowers the cost of compliance and improves
competitiveness. Should in many cases be directed to improving quality and
to secondary fibre as primary fibre resources insufficient and/or high cost to
be able to compete in primary fibre based bulk products
Skills; level today still varies quite a lot between different countries/regions
of the Continent. Average level high enough to lower the cost of
compliance in most cases
Innovation; same as skills & R&D; to be mainly directed into recovered
paper based or niche products
Age of technology; in general high (although several exceptions found) and
thus increases the cost of compliance compared to e.g. most of the Nordic
sites
Demand side factors; as major markets close by, cost of compliance goes
down and competitiveness is improved
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Brazil:
Specialization; for goods produced for exports, specialization is at present
unnecessary. If done, would increase the cost of compliance and would
deteriorate relative competitiveness
R&D; level in general low compared to Europe, although improving
particularly in pulp. R&D would increase the cost of compliance and reduce
competitiveness in grades produced in large scale
Skills; same as R&D
Innovation; same as skills & R&D
Age of technology; is in general low, particularly for BKP. This lowers the
cost of compliance and improves the competitiveness
Demand side factors; as major markets far away and sometimes with a
different set of standards, relative cost of compliance goes up and
competitiveness is reduced
Indonesia:
Specialization; Potential is low. It would increase the cost of compliance
without improving the presently good cost competitiveness (in pulp and
copy paper) very much (home markets for specialised products are too
small, export market far away or protected (Japan) and economies of scale
impact low)
R&D; level and priority are, at present, in general low. Increased R&D
would increase the cost of compliance and reduce competitiveness
Skills; same as R&D; much of the skills would have to be imported in short
and medium term
Innovation; same as skills & R&D
Age of technology; for export-oriented mills in general low thus lowering
the cost of compliance and improving the competitiveness
Demand side factors; as major markets far away and sometimes with a
different set of standards, relative cost of compliance goes up and
competitiveness is reduced
USA:
Specialization; increases the cost of compliance. With a large home market
for specialized products, it can, however, at many mills be worth the effort,
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particularly for otherwise uncompetitive units, as the increased costs can be
covered by the value added for the specialized products
R&D; level high, lowers the cost of compliance and improves
competitiveness
Skills; same as R&D
Innovation; same as skills & R&D
Age of technology; mixed, for those companies and mills exporting to EU
the age structure is in general low. This lowers the cost of compliance and
improves the competitiveness. For much of the US domestic market based
industry the age of technology is, however, fairly high rendering them less
competitive against imports to the US.
Demand side factors; as major markets at home and some large export
markets not too far away, cost of compliance goes down and
competitiveness is improved. However, export markets are sometimes with
a different set of standards (e.g. the size of a copy paper sheet is different in
the US and Europe). This reduces the positive impact of the demand side
factors.
Canada (market kraft pulp only):
Specialization; Pulp is in principle a commodity product with less
specialisation, hence no major help is available for mills that are
uncompetitive.
R&D; level high, lowers the cost of compliance and improves
competitiveness
Skills; same as R&D
Innovation; same as skills & R&D
Age of technology; for most pulp mills in Eastern Canada and BC age is
high. For mills in Western Central Canada (Alberta, Saskatchewan) mills
new and age of technology low. However, competitiveness of these mills
(outside of North America) is worsened due to high delivery costs.
Demand side factors; Mixed. For some mills large US market can be
considered a home market. For most mills high export share (to Europe,
Asia) is essential. Growing demand for armament (strong) pulps is a
positive demand factor for most Canadian softwood pulps, which are
recognised for their high tear-strenghts.
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10.2 Strategic Impact of BAT Investments
The strategic impact of BAT investments on mill performance has been
analysed for each of the selected grades (bleached kraft pulp, copy paper
and white-lined chipboard) and regions (Europe, North America, Latin
America, Asia). The analysis is based on key mill parameters extracted
from the JPC pulp and paper database and estimates of investment
requirements by pulp and paper industry experts. The analysis provides an
overview of the potential impacts of BAT investment on the
competitiveness of existing mills in Europe relative to mills with similar
environmental performance in other studied regions.
Two sets of complementary analyses are presented. Matrix I divides
existing mills in each region and product category according to their current
environmental and manufacturing cost performance (Figure 10-2), and
estimates current investments needed for indicative mills to reach a
minimum compliance level of 80% of techniques recommended in the BAT
BREF. Matrix II depicts the strategic investment options available to mills
wishing to compete in a post-BAT BREF European market (Figure 10-3),
and the most likely changes in competitive positioning for each grade.
Matrix 1 – Current Situation
The current environmental and manufacturing cost performance of mills
within each grade and region is analysed using 2x2-matrices. Both
categories are divided by the percentage distribution between “good” and
“bad” mills.
Figure 10-2
Analysis Framework for Environmental and Manufacturing Cost
Performance
CURRENT ENVIRONMENTAL
PERFORMANCE
bad
good (low)
good
C
A
D
B
MANUFACTURING
COSTS
bad (high)
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Environmental performance of mills has been evaluated on the basis of a
number of key parameters: number of techniques currently available,
emission levels, technical age and JPC experts’ opinion on mill operations.
Mills with “good” environmental performance meet many, but not
necessarily all, environmental performance standards. Mills with “bad”
environmental performance implement fewer modern environmental
techniques.
Manufacturing cost performance of the mills has been divided into high
cost and low cost categories compared to the world average manufacturing
cost per ton of product (excluding capital charges and cost of delivery). The
addition of capital charges and delivery cost impacts upon the cost
performance depending on the location of the mill relative to markets.
Example mills were selected for each product (bleached kraft pulp, copy
paper and white-lined chipboard) to provide indicative estimates of the cost
impact of implementing BATs depending on the current position of a mill
within the matrix. A background description of each example mill was
compiled, based on the information in the JPC database. Investments
needed to reach 80% implementation of techniques recommended in the
BAT BREF were determined by industry experts and investment costs
estimated. In order to maintain anonymity, no exact values are given and
the country of mill location has been excluded.
Tables describing the example mill characteristics and figures illustrating
the impact of environmental investments on the mills theoretical revenue
are provided for each particular grade produced. Not all quadrants of each
matrix are necessarily filled because some categories are not relevant for
certain regions or grades. Some quadrants may also be blank due to lack of
sufficiently comparable data.
Matrices are shown for each region separately. Kraft pulp and copy paper
mills have been examined in three geographical areas: Europe (Western
European producers), Latin America (Chile, Brazil) and Asia (mostly South
East Asia). The WLC sample includes European and Asian mills. North
America is an important producer in kraft pulp and copy paper but it has
been excluded from the analysis of specific mills because of the dynamic
state of flux resulting from the current implementation of the Cluster Rule.
Many North American mills are currently undertaking large environmental
investments, thus it is very difficult to determine the current position of
these mills. In the case of WLC both Americas have been excluded because
the grade is typically a European and Asian product that has very few
producers in North America and Latin America.
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Matrix II – Potential Impact
The principle strategies available to producers to comply with BAT are
shown in Figure 10-3. The strategy adopted will depend on the mill specific
circumstances (e.g. competitive position, current environmental
performance). In addition to (or as part of) capital investment or operations
improvement, a wide variety of other measures can be necessary to achieve
desired outcomes (such as selection of personnel, training, change of
particular chemical, etc.).
Figure 10-3
Principle Strategies to Implement Techniques Recommended in the BAT BREF
and Create Value
Good
A
C
Seek Alternative
Markets
and/or
Reposition
with Investment
Manage for
Cash,
Invest for
Growth
COST
Capital Investment
and/or operations
improvement
Bad
Substantial Investment
Required
or
Exit Business
D
Bad
Operations
Improvement
Required
ENVIRONMENT
B
Good
Capital Investment and/or
operations improvement
Mills currently positioned in quadrants C and D must take action to
improve their environmental performance if BAT BREF recommendations
are strictly implemented. It would be desirable for mills to also capture cost
advantages through concurrent investments or operations improvement to
enhance cost competitiveness where possible. The goal for many producers
would be to reposition themselves into quadrant A, where the mill would
have the greatest earnings potential.
Mills under the greatest threat are those positioned in quadrant D. These
mills face substantial investment requirements to meet acceptable
environmental and operating performance levels. Some mills in this
category may be forced to exit the business either through changing product
grade, or by ceasing operations.
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Alternative markets with less stringent environmental performance
requirements may enable mills from competing regions in quadrant C to
maintain their cost advantage without investing in BATs. This may
negatively impact on the competitiveness of European producers in nonEuropean markets.
10.3 Sample Analysis and Methodology
This section gives a brief overview of the basis of the bar charts included in
the following sections. In this chapter “environmental investment” means
the total investment required by a mill to obtain at least 80 % of the
techniques recommended in the BAT BREF unless stated otherwise.
The comparison between mills and across regions was done using the
concept of “theoretical annual revenue”. “Theoretical annual revenue” is
calculated by multiplying the capacity of the mill by the trend price for the
studied product. This defines the maximum economic potential of the mill
for the particular grade.
The price used is a trend price for each selected product in the year 1999.
The European trend price for pulp, copy paper and WLC was applied under
the assumption that all the producers would be selling their products to
Europe. For all these grades the real price trend shows gradual decline. As
for the capacity, the total production capacities of kraft pulp, uncoated
woodfree paper and WLC were used regardless of the share of market pulp
out of total pulp or copy paper out of total uncoated woodfree paper
capacity.
The following formula was used for calculating the impact percentage of
environmental investments required for a certain mill:
Impact % =
Total Environmental Investments Required (€)
* 100 .
Grade Capacity * Trend Price of the Product (€)
The impact percentage shows the proportion of theoretical revenue required
for the environmental investment. The results of the impact calculations are
shown in the following sections for the respective grades and regions.
10.4 Results
10.4.1 Bleached Kraft Pulp
The example mills have been briefly described using capacity, technical age
and manufacturing costs as shown in Table 3-1. Manufacturing costs
include fixed and variable costs of production but exclude capital costs and
delivery. Manufacturing costs have been divided into two categories in
order to separate high cost and low cost producers.
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Table 10-1
Bleached Kraft Pulp Classification Parameters
Parameter/Classification
Low
Capacity (1000 tons)
< 250
Technical age (years)
< 10
Manufacturing costs (€/ton)
≤ World average
Average
250-500
10-20
-
High
>500
> 20
> World average
Investment requirements for mills in Europe to achieve a minimum of 80%
of techniques recommended in the BAT BREF are shown in Figure 10-4.
Quadrant D represents an unsustainable position for mills wishing to
continue operating should the BAT BREF recommendations be
implemented. In addition to not meeting the BAT BREF recommendations,
such mills are under immediate threat from competitors in other regions.
Figure 10-4
Environmental Investment Requirements and Characteristics of Selected
European Bleached Kraft Pulp Producers
CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
Good
C
Good (Low)
A
Capacity: Average
Capacity: High
Technical age: Average
Technical age: Low
Potential environmental
investment (€/ton): 25-44
Potential Environmental
Investment (€/ton ): 2-4
MANUFACTURING
COSTS
Capacity: Low
Capacity: Average
Technical age: Average
Technical age: Average
Potential Environmental
Investment (€/ton): 45-65
Potential Environmental
Investment (€/ton): 6-11
Bad (High)
D
B
There is a wide gap between the necessary investments for category A
“sample” mill compared to category D “sample” mill. In the case of these
examples, the best mills are large producers and the worst mills are small
ones. Mills with poor cost competitiveness have to make larger investments
per ton than mills with similar environmental performance already on the
lower cost side. This indicates that under some circumstances BAT
investments may widen the gap between competitive mills and those in less
favourable positions. However other investments may be done concurrently
with the BAT investments and this may improve the mills competitive
position.
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Figure 10-5 shows the magnitude of the environmental investment as a
proportion of the theoretical revenue. In the case of Western European pulp
producers, the example mills A and B are required to invest a significantly
smaller share of their revenue to the BAT or similar environmental
measures than mills C and D.
Figure 10-5
Impact of the Environmental Investments on Theoretical Revenue
Selected Bleached Kraft Pulp Mills - Western Europe
12
10,9
10
Impact %
8
7,3
6
4
1,8
2
0,5
0
Mill A
Mill B
Mill C
Mill D
Example mill
These changes are reflected in the likely movements in competitive
positioning of European bleached kraft pulp mills as a result of BAT
investments, as shown in Figure 10-6. Percentage figures represent the
approximate proportion of existing capacity for each category. Arrow size
represents the proportion of mills likely to move in a particular direction.
The majority of mills are expected to maintain their relative cost positions
after BAT investments, although a small proportion can be expected to lose
their cost advantage, in some cases leading to business exit. Some mills
may leapfrog from quadrant D to quadrant A through concurrent
investments in cost reducing processes. This is most likely to happen when
a new owner purchases a mill at a low price permitting substantial
investment without excessive capital burden.
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Figure 10-6
Potential Impact of BAT BREF Recommended Investments on the
Competitiveness of Bleached Kraft Pulp Producers within Europe
ENVIRONMENT
Bad
Good
C
A
Good (Low)
5%
60 %
10 %
25 %
COST
Bad (High)
D
B
In Latin America the manufacturing costs are lower than the world average
for all bleached kraft pulp mills (Note: Capital costs are excluded). Thus
only the upper half of the matrix has been filled. The selected mills have
similar manufacturing costs but their environmental performance is
different. The required investment per ton is comparable to European mills
in corresponding categories.
Figure 10-7
Environmental Investment Requirements and Characteristics of Selected
Latin American Bleached Kraft Pulp Producers
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CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
Good
C
A
Capacity: High
Capacity: High
Technical age: Average
Technical age: Average
Environmental investments
required (€/ton): 21-33
Environmental investments
required (€ /ton): 1-3
Good (Low)
MANUFACTURING
COSTS)
Bad (High)
D
B
Figure 10-8 shows the magnitude of the environmental investment as a
proportion of the theoretical revenue. In the case of Latin American pulp
producers, the example mill A is required to invest a significantly smaller
share of its revenue to the BAT or similar environmental measures than the
one in category C.
Figure 10-8
Impact of the Environmental Investments on Theoretical Revenue
Selected Bleached Kraft Pulp Mills - Latin America
6
5,3
5
Impact %
4
3
2
1
0,5
0
Mill A
Mill C
Example mill
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Several kinds of mills can be found among the Asian pulp producers. Most
of the capacity in the examined producer countries is however located on
the lower cost side. The high cost mills included in these examples are
already among the better environmental performers.
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Figure 10-9
Environmental Investment Requirements and Characteristics of Selected
Asian Bleached Kraft Pulp Producers
CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
Good
Capacity: Average
C
Capacity: High
Good (Low)
MANUFACTURING
COSTS
A
Technical age: Low
Technical age: Low
Environmental investments
required (€/ton ): 3-7
Environmental
investmentsrequired (€/ton ):
20-35
Capacity: Average
Technical age: Average
Bad (High)
Environmental investments
required (€/ton): 7-13
D
B
Again the impacts on revenue are similar for Asian and European mills in
corresponding categories.
Figure 10-10
Impact of the Environmental Investments on Theoretical Revenue
Selected Bleached Kraft Pulp Mills – Asia
5,8
6
5
Impact %
4
3
2,1
2
1,1
1
0
Mill A
Mill B
Example mill
Mill C
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The capacity distribution of bleached kraft pulp mills for each region is
shown in Figure 10-11. The distribution illustrates differences in
environmental performance and cost competitiveness of different regions.
North American estimates are less certain due to substantial current
investment to meet Cluster Rule requirements.
Figure 10-11
Regional Distribution of Capacity – Bleached Kraft Pulp
Western Europe
Asia
ENVIRONMENT
Good
(Low)
Bad
Good
5%
60 %
10 %
25 %
COST
Bad
(High)
ENVIRONMENT
Bad
Good
(Low)
Bad
(High)
Bad
(High)
40 %
15 %
10
5%
North America
ENVIRONMENT
ENVIRONMENT
Bad
Good
COST
45 %
COST
Latin America
Good
(Low)
Good
70 %
30 %
Bad
Good
(Low)
Good
10 %
10 %
65 %
15 %
COST
Bad
(High)
The potential impact of BAT BREF recommendations on the competitive
position of European producers becomes more apparent when considering
the relative size of the best environmental and cost performers in competing
regions, with the worst environmental and cost performers in Europe
(Figure 10-12). The approximate capacity of the best performing mills in
competing regions is 7 million ADt/a, compared to approximately 8.2
million ADt/a for mills with lower cost competitiveness in Europe. Not all
of the production from the most competitive mills in other regions would be
directed to European markets, but some of the higher cost producers in
Europe may experience additional financial hardship should the
introduction of BAT BREF recommendations further erode their financial
position. Some may even succumb to the financial pressures and exit the
business.
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Figure 10-12
Potential Competitive Threats to Western European Bleached Kraft Pulp Producers from
Other Regions – Proportion of Capacity (ADt/a)
Europe
ENVIRONMENT
bad
good
Good
(Low)
5%
60 %
COST
Bad
(High)
10 %
25 %
(2.4 million)
(5.8 million)
External Competition
Asia
Good
(Low)
Latin America
45 %
40 %
(2.2 million)
10
15 %
%
5%
North America
30 %
(2.1 million)
70 %
10 %
10 %
(2.7 million)
COST
Bad
(High)
bad
65 %
good
bad
ENVIRONMENT
good
ENVIRONMENT
bad
15 %
good
ENVIRONMENT
Europe
ENVIRONMENT
bad
good
Good
(Low)
60 %
5%
COST
Bad
(High)
10 %
25 %
(2.4 million)
(5.8 million)
External Competition
Asia
Good
(Low)
North America
Latin America
45 %
40 %
(2.2 million)
70 %
30 %
(2.1 million)
10 %
10 %
(2.7 million)
COST
Bad
(High)
15 %
bad
65 %
good
ENVIRONMENT
bad
good
ENVIRONMENT
bad
15 %
good
ENVIRONMENT
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10.4.2 Copy Paper
The parameters used to describe the example mills are similar to those
selected for the pulp mills except for capacity. Paper and board mills are, on
average, considerably smaller than modern pulp mills.
Table 10-3
Copy Paper Classification Parameters
Parameter/Classification
Low
Capacity (1000 tons)
< 50
Technical age (years)
< 10
Manufacturing costs (€/ton)
≤ World average
Average
50-140
10-20
-
High
>140
> 20
> World average
It is more difficult to estimate the required environmental investments for
paper mills than for pulp mills. One reason is the complexity associated
with mill integration. In the case of copy paper, sufficient environmental
performance data could only be identified for good environmental
performers in Europe and Latin America. The mills are shown in Figure 1013 for Europe and in 10-14 for Latin America. All the example producers
have large capacities and low/average technical age.
Figure 10-13
Environmental Investment Requirements and Characteristics of Example
European Copy Paper Producers
CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
C
Good
Capacity: High
A
Technical age: Average
Good (Low)
Environmental investments
required (€/ton ): 0,5-2
MANUFACTURING
COSTS
Capacity: High
Technical age: Average
Environmental
investments required
(€/ton): 2-5
Bad (High)
D
Figure 10-14
B
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Environmental Investment Requirements and Characteristics of Example
Latin American Copy Paper Producers
CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
C
Good
Capacity: High
A
Technical age: Low
Good (Low)
Environmental investments
required (€/ton ):6-10
MANUFACTURING
COSTS
Bad (High)
D
B
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Figure 10-15 shows the effect of the required investments on the revenue of
the particular mills. European and Latin American producers are displayed
in the same picture. Please note that all the effects are small because these
mills are already good environmental performers.
Figure 10-15
Impact of the Environmental Investments on Theoretical Revenue
Copy Paper Example Mills - Western Europe + Latin America
1
1
Impact %
0,8
0,6
0,4
0,4
0,2
0,1
0
Mill A/WE
Mill B/WE
Mill A/LAm
Example mill/ Region
The most significant strategic response by copy paper producers likely to
arise from the introduction of the BAT BREF recommendations would be
to move to higher margin grades that can support the necessary BAT
investments (Figure 10-16). Repositioning within the European copy paper
industry resulting from BAT investments is likely to see similar proportions
of mills in quadrant C maintain their cost position compared to those that
would lose their favourable cost position. The direction of movement will
depend on the magnitude of the required investments and the mill’s original
cost position, as described above.
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Figure 10-16
Potential Impact of BAT BREF Recommended Investments on the
Competitiveness of Copy Paper Producers within Europe
ENVIRONMENT
Bad
Good
C
A
Good
(Low)
10 %
45 %
COST
COST
Bad
(High)
10 %
D
35 %
B
The high likelihood of some mills with high costs and bad environmental
performance exiting this sector does not necessarily mean that the
mill/machine will be permanently closed. It may be converted to produce
another, higher value added “niche” product or could be sold to another
region where the prohibitively high costs (often due to the small size of the
mill) would be lower.
The distribution of copy paper capacity to each region is shown in Figure
10-17. As for bleached kraft pulp, the North American estimates are less
certain due to substantial current investment to meet Cluster Rule
requirements.
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Figure 10-17
Regional Distribution of Capacity – Copy Paper
Asia
Europe
ENVIRONMENT
bad
good
Good
(Low)
10 %
45 %
COST
Bad
(High)
ENVIRONMENT
bad
good
Good
(Low)
10 %
35 %
Bad
(High)
Bad
(High)
10 %
15 %
North America
ENVIRONMENT
bad
good
ENVIRONMENT
bad
good
COST
45 %
COST
Latin America
Good
(Low)
30 %
60 %
40 %
Good
(Low)
70 %
10 %
COST
Bad
(High)
20 %
The threat posed by good performing copy paper mills in other regions is
similar to that for bleached kraft pulp mills. However, competition from
other regions is more likely to hasten the transition of poorer European
performers to other grades. Figure 10-18 shows that the entire capacity of
the worst performing European mills (quadrant D) could be replaced by
producers in competing regions, even if the limitations to direct competition
from North American sheeted copy paper producers due to differing sheet
sizes are considered.
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Figure 10-18
Potential Competitive Threats to European Copy Paper Producers from Other Regions –
Proportion of Capacity (ADt/a)
Europe
ENVIRONMENT
bad
good
Good
(Low)
45 %
10 %
COST
Bad
(High)
10 %
35 %
(0.9 million)
(2.5 million)
External Competition
Asia
Good
(Low)
North America
Latin America
30 %
45 %
(0.8 million)
60 %
40 %
(0.5 million)
70 %
10 %
(1.2 million)
COST
Bad
(High)
10 %
bad
15 %
good
ENVIRONMENT
20%
bad
good
bad
good
ENVIRONMENT
ENVIRONMENT
10.4.3 White-lined Chipboard
The parameters used to describe the example mills are similar to those
selected for the pulp mills except for capacity (Table 10-5). The average
size of board mills is considerably smaller than the size of modern pulp
mills.
Table 10-5
White-lined Chipboard Classification Parameters
Parameter/Classification
Low
Capacity (1000 tons)
< 50
Technical age (years)
< 10
Manufacturing costs (€/ton)
≤ World average
Average
50-140
10-20
-
High
>140
> 20
> World average
It is more difficult to estimate the required environmental investments for
board mills than for pulp mills. One reason is the complexity associated
with mill integration. Another reason, especially in the case of WLC, is the
quality of the product, which may vary considerably between mills.
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The WLC analysis includes mills in Europe and Asia only. The example
mill characteristics and required investments to meet BAT BREF
recommendations are shown in Figures 10-19 and 10-20 respectively. The
gap between the necessary investments is several times smaller than for
pulp mills. This reflects the integrated nature of most WLC mills, meaning
that investment in common facilities (e.g. wastewater treatment) may be
shared on one site between a pulp mill and board mill producing several
other grades in addition to WLC.
Figure 10-19
Environmental Investment Requirements and Characteristics of Selected
European White-lined Chipboard Producers
CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
C
Good
Capacity: High
A
Technical age: Low
Good (Low)
MANUFACTURING
COSTS
Environmental investments
required (€/ton ): 0,5-2
Capacity: Low
Technical age: High
Bad (High)
Environmental
investments required
(€/ton ): 9-15
D
B
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Figure 10-20
Environmental Investment Requirements and Characteristics of Selected
Asian White-lined Chipboard Producers
CURRENT
ENVIRONMENTAL
PERFORMANCE
Bad
C
Good
A
Capacity: High
Good (Low)
MANUFACTURING
COSTS)
Technical age: Low
Environmental investments
required (€/ton ):17-28
Capacity: High
Technical age: High
Bad (High)
Environmental investments
required (€/ton): 13-22
D
B
Figure 10-21 shows the magnitude of the environmental investment as a
proportion of the theoretical revenue. In the case of Western European
WLC producers the example mill A is required to invest a smaller share of
their revenue to the BAT or similar environmental measures than the mill
D. From Asian WLC mills only mills from the “bad” environmental side
have been included in the sample due to lack of suitable data for mills in
categories A and B.
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Figure 10-21
Impact of the Environmental Investments on Theoretical Revenue
Selected White-Lined Chipboard Mills - Western Europe + Asia
3,5
3,3
3
2,6
Impact %
2,5
2
1,8
1,5
1
0,5
0,1
0
Mill A/WE
Mill D/WE
Mill C/ASIA
Mill D/ASIA
Example mill/ Region
The potential impact of BAT investments on WLC producers in Europe is
shown in Figure 10-22. Relatively even proportions of the poorest
performing mills are likely to maintain and improve their cost positions
following BAT investments. The mills improving their cost performance
are most likely to invest in other aspects of their operations concurrently.
Few mills are expected to experience substantial erosion of their cost
position as a result of BAT investments for the WLC mill alone. The
situation may be different if the required BAT investments across a whole
integrated site are considered.
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Figure 10-22
Potential Impact of BAT BREF Recommended Investments on the
Competitiveness of Producers within Europe
Europe
ENVIRONMENT
bad
good
C
A
Good (Low)
45 %
30 %
15 %
10 %
COST
Bad (High)
D
B
The approximate distribution of white-lined chipboard capacity in Europe
and Asia is shown in Figure 10-23. All Asian WLC producers have
manufacturing costs below the world average.
Figure 10-23
Regional distribution of capacity – White-lined chipboard
Europe
Asia
ENVIRONMENT
bad
good
Good
(Low)
45 %
30 %
COST
Bad
(High)
ENVIRONMENT
bad
good
Good
(Low)
55 %
50
COST
15 %
10 %
Bad
(High)
5%
45 %
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Potential competitive threats to European WLC producers are shown in
Figure 10-24. Perhaps the greatest threat comes from other board grades
with higher quality properties and better price premiums. The nature of the
product limits direct competition from Asian producers in the European
market, despite the large proportion of Asian capacity that could
conceivably compete very effectively against European producers. Eastern
European producers may pose a greater threat than Asian producers in the
future.
Figure 10-24
Potential Competitive Threats to European White-lined Chipboard Producers
from Other Regions – Proportion of Capacity (ADt/a)
Europe
ENVI RONMENT
Good
(Low)
bad
good
45 %
30 %
COST
Bad
(High)
15 %
10 %
(0.6 million)
(0.4 million )
External Competition
Asia
Good
(Low)
COST
55 %
%
50
45
%
45 %
(0.9 million)
Other board
grades
5%
Bad
(High)
bad
good
ENVIRONMENT
10.5 Cost Impact of BAT Investments
The focus of this study is on the competitive position of EU versus other
regions. Information from European industry (e.g. in case of pulp, mills
from all categories) is thus compared to the most relevant competing
regions: for pulp Latin America and Asia, for copy paper Latin America
and for WLC Asia. As suggested in the analysis of potential competitive
threats (Figures 10-12, 10-18 and 10-24) the most likely competitors to
European producers come from the good-good corners of the matrices.
Information about the North American situation has been too scarcely
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available (due to the continuous change caused by implementation of the
Cluster rules) for the region to be included in the mill analysis.
There are some aspects challenging the comparativeness of the results.
Mills do not necessarily produce the same general grade as their main grade
and may also produce products of varying quality within each of the main
grades studied. However, some general remarks over the different aspects
of the economic impacts of BAT investments can be made. They are
discussed briefly in this section.
Most of the environmental investments required were of machinery type.
The few infrastructure investments involved were not separated. The
investments required for each mill were treated in the analysis of the data as
a one-time investment adding all the separate investments together.
However, in real life, a mill with many small investments or a few costly
investments would in most cases try to spread the burden over a longer
period of time instead of making all the investments at once.
It is difficult to judge how the cost is distributed and how it really burdens
the mill. BAT investments in the production process of a certain mill and
for a certain grade are often paid by bigger units e.g. the company or the
whole Group. This is the case especially for copy paper and WLC. Also, in
many environmental investment cases part of the total investment would go
into expanding the mill capacity, in order to have in the future years a larger
volume to recover the money spent. Thus, a cost per ton value for the
environmental investments becomes even more difficult to calculate and
this naturally also effects the comparison between regions.
The actual paying unit would have to be identified in each individual case
separately. Manufacturing costs were used as a basis of dividing the
producers into low cost and high cost producers in the matrix. For the cost
effect estimates, it would be necessary to add also capital costs that are very
mill specific and vary between regions. Furthermore, bookkeeping
legislation and practices in different countries/regions vary, especially in
regard to the depreciation rules. Finally, the situation in world economy has
a big impact on the cost competitiveness of mills in different regions. The
level of the exchange rates has a particularly high relevance.
When calculating the impact of an investment (environmental or other) on
the economic performance of a mill/company, different economic or
mathematical models can be applied. For instance, in calculating the added
costs, the following formula could be used:

r
Total Environmental Investment (€) * 
−a
1 − (1 + r )

Cost added =
Grade capacity (t)



.
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where r is the discount rate and a is the payback period (in this case the
number of years over which the investment is paid by the company).
In order to give a very rough idea of the potential/likely cost, a couple of
numbers can be cited, using as a basis the above-given formula and the
approach where margins (without and with cost added by environmental
investments) are calculated by deducting from the trend price of the product
the costs:
Change % =
Margin 1 - Margin 2
* 100 .
Margin 1
The cost added is calculated applying the formula introduced above with
the following assumptions: r=5 % and a=15 %. For the margin approach
trend prices of the products and total production costs of 1st and 2nd quarters
of 2000 are used. For our sample mills the change % for good
environmental performers that were also cost competitive (category A)
ranged from 0,1-0,5 % in all the regions. For the worst environmental
performers (category D) the change % was up to 3 %. Large and new mills
tend to have an advantage independent of the region they are located in.
This is because the environmental standard at original building phase and
the financial capacity to undertake new investments is relatively good. Still
it should be born in mind that our estimated costs are based on performance
of individual mills and the results should not be hastily extrapolated to any
mill of similar size or age.
10.6 Conclusions for Strategic Impacts and the Costs of
Compliance
For any general conclusions drawn from this study there are exceptions.
The size of the companies varies considerably. Also the age and location
vary a lot. Some companies/mills are export-oriented; some thrive on the
home market demand. Some have proceeded further in meeting tomorrow’s
environmental (and other) needs; some prefer to have waited until the last
minute before investment decisions are made.
Global Similarities
•
Universal Variation - Currently mills of good and bad environmental
performance exist in all the regions and grades studied.
•
Common Performance Gaps - The pattern of investment needs for
good and bad environmental performers is quite standard across Asian,
European and Latin American producers. The range of investments (in
euros) a mill of each category has to spend on achieving 80 % of the
technologies recommended in the BAT BREF or corresponding
technologies does not vary much across the regions.
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•
Mill Specificity - Only very general conclusions can be drawn about the
impact of the cost of compliance, since measures are very
company/mill/country-specific.
There are difficulties in separating environmental investment costs for
integrated paper and board mills. The pulp mill should be accounted for as
the production facilities may share certain techniques such as the
wastewater treatment plant. Having many BAT techniques at the mill does
not necessarily imply that they are efficiently used, let alone that emission
targets are met. (It is not just a matter of what you have, but also how you
use it, which is critical to environmental and cost performance.) Some mills
may have environmental techniques only for a fraction of their capacity.
European Assets and Exposure
European producers in general are blessed with many favourable
conditions, but some producers also suffer considerable exposure to
producers in other regions.
•
Low Cost of Compliance - Low additional costs of compliance, low
average age, large scale of the mills and high R&D, skill and innovation
level of the workforce in the forest product industry are great assets with a positive impact on the cost of compliance
•
Specialisation Potential - For mills with smaller average size and
higher age the ability to specialise is crucial to compensate for a
tendency to higher costs of compliance. Specialisation is enhanced by
high R&D, skill and innovation levels as well as a large home market
•
Raw Material Influence - For Continental Europe, cost of compliance
could easily hurt the competitiveness of virgin-fibre based bulk
products, whilst secondary-fibre products, such as WLC, stand better
chances of remaining cost-competitive even if the cost of compliance is
high
•
Exposure to Competitors - A likely scenario is that some European
high manufacturing cost mills that need to make large environmental
investments (i.e. mills in category D) could be threatened by mills from
other regions that are already competitive. This is common to all of the
studied grades and most likely applicable to other paper and board
grades
Competitor Positioning
•
Workforce Skills Impeding – Latin American and Southeast Asian
companies have, due to lower levels of education and lack of know-how
centres a less skilled workforce than their European counter parts. This
increases the cost of compliance
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•
Competitive Strengths - Most export-oriented mills in Latin American
and Southeast Asian countries are, however, quite large and relatively
new. This lowers the cost of compliance and increases the
competitiveness in virgin-fibre based bulk products
•
Workforce Skills Promoting – North American mills/companies have
mostly skilled people with high R&D and innovation potential. This
lowers the cost of compliance. The large home market helps as well.
•
Home Market Focus - The remoteness of export markets, different sets
of regional standards and the lucrative size of the home market increase
the cost of compliance for some of the best-suited export products in
North America, relative to the cost of compliance for European based
producers. Older/smaller mills with specialization needs tend to do so
with the home market rather than export markets in mind
The conclusions of this study apply, to some extent, in the named
regions/products. They should not be used, as such, to support or to negate
the hypotheses presented in chapter 11, section Hot Spot Analysis. Far too
many examples are found in each country/region and product, which go
against the general description of the state of affairs that the “evidence” for
or against the hypotheses remains inconclusive.
What can be conclusively said is that it does not matter whether a mill is in
Northern or Southern Europe, as long as it has a good strategic position and
effective environmental protection capabilities that enable it to be
competitive.
For as Deng Xiaoping, former leader of Communist China, once said: ”It
doesn’t matter whether a cat is black or white as long as it kills mice”
11 DIFFERENT PERSPECTIVES
11.1 Hop, Skip, Step or Jump?
Should environmental investments be made in a series of small continuous
steps or in one big jump for cost efficiency?
There are arguments supporting both methods. The nature of the investment
is decisive as well as the type and size of the company making the
investments. Also, the possibility of combining environmental investments
with other investments (e.g. to capacity increase or quality improvement)
plays a major role in determining whether or not a company should invest
in a big single jump or choose the stepwise approach.
As the decisions over the way investments are made are best made case-bycase, the pros shown for each type of an investment in the scale below must
be viewed as only guidance providers.
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Figure 11-1
A big, single jump
!whenever the last phase is decisive
economically
!whenever the last phase is decisive for
environmental or image reasons
!overall production losses limited
!need for outside help restricted to one
time
!if company sound economically
!when time-table tight
!when risk of changes in ruling over time is
low
Small, continuous steps
!whenever first step(s) decisive economically
and impact of the last is limited
!whenever first phase is decisive for image or
environmental reasons
!if company weak economically
!if first phase provides cash or cost savings
(to finance the remainder)
!when time table is loose
!whenever in doubt of the ruling over time,
avoid going too fast as direction might be
wrong
11.2 Endangered Species
This chapter will give a rough estimate of the percentage of European mills
threatened to a lesser or higher degree by proposed BAT levels applied “by
the book”.
When making the estimates, the cost of compliance and competitiveness
factors have been taken into account. Also, the present cost level of the
mills/machines has been considered. With very low costs today, the
“tolerance” of extra costs or drop of competitiveness is higher than at those
mills which may have less compliance costs or difficulties in competing,
but which are so close to the “edge” that they become “endangered species”
even with a small additional cost or loss of competitiveness.
Estimates on the “endangered species” and their share of the total are based
on the number of mills. No volume weighting has been taking into account.
If numbers were volume-weighted the percentage of the endangered species
would be lower. If the total number of mills is low within a region that
raises the percentage even if there was e.g. just one mill in the
“endangered” zone. The time-scale considered here is up to and including
the year 2007 assuming that the compliance is required by that time.
Percentage numbers have been rounded to the nearest 5 %.
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This analysis is based on the information presented in Chapters 3.1
Capacity Distribution, 3.2 Production Costs, 3.3 Technical Age, 8 The
Environmental Regulation Arising from IPPC, 6 The Current
Environmental Regulations in European Countries and Their Key
Competitor Countries, 5 Trends and 7 Conclusions for Analytical Overview
– the SWOTs.
Kraft Pulp
The list of “endangered species” in bleached kraft pulp mills includes some,
which are:
•
too small and/or old (with no major revisions done in recent past)
•
are lacking raw material to enlarge their production
•
still use active (gas) chlorine in bleaching (found only outside Western
Europe)
•
are major net buyers of energy
•
are high consumers of water/ton of pulp
•
are far from the national/local limits of water or air discharges
Estimates have been made on regional basis only (except for the USA) and
for the kraft pulp total without separating the grades. The reason for this is
that the number of mills per grade is so low in some of the countries that the
identification of endangered mills would be too easy.
Percentages of “endangered species” by region:
•
•
•
•
Europe: 15 %
North America: 20 %
Latin America: 5 %
Asia: 15 %
Copy Paper
Also here, estimates have been made on regional basis only (except for the
USA). The reason for this is that the number of mills per grade is so low in
some of the countries that the identification of endangered mills would be
too easy.
The list of “endangered species” in copy paper mills includes some, which
are:
•
too small and/or old (with no major revisions done in recent past)
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•
are lacking raw material to enlarge their production if integrated or
have, long term, higher than average costs of buying raw material if
non-integrated
•
still use active (gas) chlorine in bleaching at the pulp mill in connection
of the paper mill (found only outside Western Europe)
•
are competing with small scale bulk grade production or have too many
low return grades which increase the number of grade changes, reduce
production and lower competitiveness
•
have below average quality and/or service
•
are far from the national/local limits of water or air discharges
Percentages of “endangered species” by region:
•
•
•
•
Europe: 20 %
North America: 20 %
Latin America: 10 %
Asia: 25-35 %, if including paper mills with solely/partly non-wood
pulp based raw material, 10 % if including the machines using
hardwood chemical pulp as their raw material base
WLC
Again, estimates have been made on regional basis only (except for the
USA). The reason for this is that the number of mills per grade is so low in
some of the countries that the identification of endangered mills would be
too easy.
The list of “endangered species” in WLC mills includes some, which are:
•
too small and/or old (with no major revisions done in recent past)
•
are lacking raw material to enlarge their production if integrated or
have, long term, higher than average costs of buying raw material if
non-integrated
•
still use active (gas) chlorine in bleaching at the pulp mill in connection
of the paper mill (found only outside Western Europe)
•
are distant from high volume export markets and are competing with
larger scale FBB or SBS production for the home market production,
which lower competitiveness
•
have below average quality and/or service
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•
are far from the national/local limits of water or air discharges
•
have insufficient/out-dated facilities for stock preparation of the
recycled fibre base
Percentages of “endangered species” by region:
•
•
•
•
Europe: 15 %
North America: 20 %
Latin America: 10 %
Asia: 15 %
11.3 Hot Spot Analysis
The entirety of this study is used as material for verification of the
hypotheses H(i)… H(ix) (which do not originate at Jaakko Pöyry
Consulting, nor does Jaakko Pöyry Consulting endorse them in any way or
fashion). The bullet points below are not intended as our final word on this
subject. They are just a collection of initial thoughts to be reinforced by
further nomination and evidential references (e.g. Chapter 4).
Hypotheses:
(i.) High standards and strict enforcement, although they may represent a
short term cost and burden to the firm, could in the medium and longer term
push firms on to a higher growth path by forcing them to make product and
process changes, which yield higher competitiveness. If this happened it
would represent part of the so-called “double dividend”, i.e. gains in
environmental performance would also be accompanied by increased
economic performance.
•
Commonly used statement that is true in some cases, particularly in
case of technically poor plants where a process improvement almost by
default improves both environmental and financial performance.
Applies better to high-tech products than bulk products.
(ii.) The proportional cost of compliance (relative to turnover) by the firms
is likely to be a negative function of the productivity level (i.e. firms which
in general have the management and other capabilities to produce high
productivity and competitiveness also find it easiest to adapt to the specific
challenge posed by environmental measures).
•
Statement sounds logical and is most likely true. It must be made clear
that progressive companies are being compared with companies in the
same business area. Another way of saying this: if you manage your
company well and conscientiously, environment is one of the things you
manage well.
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(iii.) The proportional cost of compliance is also likely to be a negative
function of the size of plants/firms.
•
This is common sense, in most cases the scale of advantages also
applies in environmental investments.
(iv.) The other characteristics of best practice and strongly competitive
firms are anticipated to include:
(a) Implementation of a relatively large number of environmental
initiatives and reduced emissions through strong process control (i.e.
maintenance)
(b) Management that is more environmentally conscious than the
average.
•
There is no cause-effect relation that can be proven as cost-competitive
and environmental conscious management. However, if the best
practice means the environmental best practice the statement is
probably true in many cases.
(v.) The age of the plant and machinery in each firm is likely to have an
impact on environmental outcomes, costs of compliance and the number of
clean technology initiatives undertaken. The younger the capital stock the
better the environmental outcomes. Plants with very old capital stock may
also be at the point of replacement investment
•
Statement is correct when the term age is used in the meaning of
technical age. Distant start-up year does not mean the unit is
environmentally wise a poor performer. If the unit is upgraded
frequently, it can have as good an environmental performance record as
a greenfield-plant.
(vi.) Plants with a higher proportion of skills, or those with strong R and D
efforts, are more likely to introduce a large number of clean technology
initiatives and be more successful in reducing environmental costs.
•
Again this statement can be considered valid provided certain
conditions are met. Measuring the skill level of a plant is not an easy
task, and too wide-ranging assumptions must not be drawn on the basis
of this parameter. The real crux here is whether the focal areas for
skills and R&D include environmental issues.
(vii.) Where multinational branch plants are sampled in those parts of the
EU with the lower environmental standards/enforcement, they will
generally have higher environmental standards than indigenously owned
plants making similar products.
•
This is a reasonable and generally accepted statement.
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(viii.) Relations within the supply/production chain are likely to be both an
influence upon, as well as being influenced by, the level of environmental
standards, e.g. a manufacturer may find it easier to increase the
environmental standards of its products if it has a reliable and competent
base of suppliers to draw on. A manufacturer may be forced to upgrade
product and process environmental standards by pressure coming from the
customers of plants in the three sectors under study.
•
The statement is reasonable and applies well to the modern world
where the use of subcontractors and special suppliers is common
practice. It is true that the pressure to improve plant’s environmental
performance comes mostly from the customers, but the authorities also
have a strong influence.
(ix.) Location can affect the cost of compliance and adoption of clean
technology. There are important competitiveness differences between
countries in the Community, and underlying these differences are
differences in productivity and skills, the capacity for advanced research
and development and differences in cost of capital (i.e. amount of
supportive subsidies among other things), and since these may be important
factors influencing the ability of a firm to efficiently adapt to regulations,
then there is the potential for environmental policy to differentially
influence the competitiveness of firms between regions and countries.
•
This is probably true in general. However, it is not a generic excuse or
truth, and may even denigrate the commendable efforts in many
companies at a lesser level of productivity and skills.