Wood product manufacturing facilities byproducts – chips, sawdust, shavings – are absolutely essential feedstocks and have been procured for many years by the North American composite panel industry through an established, competitive and sustainable free market. Composite panel manufacturers also use post-consumer construction and other wood waste and recycle that material into panels for use in new products. Free market access to wood fiber is a chief public policy priority of the CPA.
CPA believes federal and state alternative energy policies must be balanced against both economic (jobs) and environmental considerations. CPA has consistently pressed for government biomass energy policies in both Canada and the U.S. that do not disrupt this functioning, free market and result in unnecessary harm to a sustainable and economically important industry in North America.
COMPOSITE WOOD PANELS – A CARBON STORY
Composite wood panels represent a remarkable sustainability story, providing significant carbon-sequestering benefits. In fact, composite panels produced in North America contain more sequestered carbon than the amount expended in their manufacture and transport. These carbon benefits are at significant risk in both the United States and Canada thanks to mandates and/or subsidies that would divert wood product manufacturing byproducts to energy production. In Europe, mandates and subsidies have driven large coal-fired power plants to convert to biomass, with a significant majority of the wood pellets being sourced from the southeastern United States and Eastern Canada. While these efforts may be well-intentioned, they are economically and environmentally bad policy.
A. Environmental Risks
Composite wood panels are primarily constructed utilizing sawdust, shavings and other byproducts from wood product manufacturers such as sawmills, planer mills and plywood plants, ensuring that what were once considered waste materials and either landfilled or burned are now put to productive, higher value use. By putting these residuals to good use, 97% of the entire harvested log is utilized, storing that carbon for the life of the product and contributing to reducing climate change impacts. Moreover, the manufacture of composite wood panels is clean and highly efficient, leaving very little waste behind and utilizing 99% of all raw material inputs in production. Composite panels produced in North America contain more sequestered carbon than the amount expended in their manufacture and transport.
Recent U.S. Department of Energy research has also confirmed that the use of woody biomass to produce composite wood products has much higher environmental, and in particular carbon reduction benefit, than converting the material to liquid fuel. In a project, entitled “Carbon Cycling, Environmental & Rural Economic Impacts of Collecting & Processing Specific Woody Feedstocks in Biofuels,” researchers performed a life-cycle assessment to compare the “environmental consequences” of using wood byproducts to produce liquid fuel (ethanol) versus composite wood panels. The results, summarized below, make a compelling environmental case for preserving the use of wood byproducts for the composite panel industry.
- It is up to 50% more efficient (mass of feedstock to mass of product) to use wood byproducts to produce composite wood panels than ethanol.
- Less carbon is emitted during the production and use of composite wood panels than with ethanol for biofuel.
- Using wood byproducts for composite wood panels and not to produce ethanol for biofuel provides the greatest displacement of carbon emissions.
The study also found that both particleboard and MDF would displace (i.e., carbon not emitted) 7.8 kg/kg and 5.3 kg/kg of carbon respectively, as compared to 0.4 kg/kg for ethanol.
B. Economic Harm
Subsidies and mandates raise the cost of the critical raw materials the composite panel industry relies on to make value-added products. The North American composite panel industry simply cannot operate in an increasingly competitive global marketplace without access to a free market of readily available wood byproducts and may suffer irreparable harm if governments establish mandates and subsidies that diverts biomass to energy use. The loss of the composite panel industry would have devastating effects, as plants throughout North America operate as large employers in regions that depend on stable, long-term employment with good paying jobs.
In the U.S. in 2015, CPA members operated thirty-seven composite panel plants with sales of $2.3 billion and employed 4,500 people with wages of $330 million. In Canada, twelve plants had sales of C$1.34 billion, employed 2,200 workers with wages of C$179 million. The economic impacts of composite panel manufacturing go beyond just the direct effects – there are also important indirect and induced effects that further spur economic growth, particularly in hard-hit rural areas. When looking at combined impacts, the total impact of U.S. CPA member companies on the U.S. economy were $7.05 billion in output, employment of over 22,500 and wages of $1.45 billion. The Canadian composite plants’ impact on the Canadian economy totaled C$3.41 billion of output, employment of almost 11,500 and C$724 million in wages. To put this into further context, when compared to the use of wood in making pellets for energy use, forest products like composite wood panels create nine times more jobs, according to a 2010 analysis of the U.S. market produced by RISI, an international consulting firm specializing in this sector.
CPA BIOMASS ENERGY POLICY
CPA strongly advocates the following positions on biomass energy policy:
- CPA opposes government policies that distort the market for wood byproducts and believes strongly that market forces should determine all uses of these byproducts for renewable energy.
- Policies that have the direct effect of diverting biomass supply to subsidized energy should be avoided.
- Within carbon accounting frameworks, the composite panel industry’s use of wood residuals to make long-lived products should be treated as a higher value use than energy recovery and prioritized accordingly to ensure optimal environmental outcomes.
- The use of biomass to create composite wood panels that serve as carbon sinks should be formally recognized in any carbon calculations that might be referenced in a future carbon economy.
CPA urges governments to recognize the climate benefits derived from utilizing wood byproducts to make composite wood panels. These benefits should be considered, along with the potentially significant economic harm, when developing future biomass energy policy.
For a full copy of CPA’s Position on Biomass Energy Policies Impacting Wood Fiber Supply, please click here.
LEGISLATIVE AND REGULATORY ACTIVITY
CPA has actively engaged with federal regulators in both Canada and the U.S. on policies and regulations related to biomass and energy.
- Affordable Clean Energy Rule: CPA continues to follow this proposed regulation closely and has commented on the initially proposed emissions guidelines, advocating that EPA let market forces govern the price and availability of wood residuals and not foster policies that would push these materials to energy production.
- Clean Power Plan: CPA supported through comments and in-person meetings provisions in the regulation that distinguished the composite panel industry’s use of wood byproducts from other residuals that might qualify for credits under the regulation.
- Biomass Crop Assistance Program (BCAP): CPA led in 2009 an advocacy effort that called for removal of potentially harmful subsidies intended to expand domestic energy opportunities but that would have directly impacted the composite panel industry’s access to wood product manufacturing byproducts.
- Clean Fuel Standard: CPA is advocating that Environment and Climate Change Canada (ECCC) remove woody biomass – or at least wood byproducts derived from wood products manufacturing – from consideration as an accepted “eligible fuel” under any final Clean Fuel Standard.
- Framework for Carbon Pollution Pricing System: CPA supports inclusion of the composite panel industry in the output-based pricing system and encourages the ECCC to avoid policies that alter the existing free (and fair) market for wood byproducts from wood products manufacturing. CPA is also urging ECCC to consider an approach similar to the one proposed for the Clean Fuel Standard that would carve out wood product manufacturing byproducts from any planned alternative energy subsidies or mandates.
- Proposed Ontario Industrial Emission Performance Standards: CPA is advocating that Ontario’s Ministry of Environment, Conservation and Parks establish standards that account for the potentially significant competitive disadvantage and high potential for leakage imposed by the proposed tax. CPA is also urging the Ministry to carve out wood product manufacturing byproducts from any planned alternative energy subsidies or mandates under the standards.