SCP Evidence Base: Sustainable Commodities Case...

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SCP Evidence Base: Sustainable Commodities Case Studies Case Study CONIFEROUS LUMBER, CONIFEROUS/NON-CONIFEROUS PULP AND PAPER December 2006

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SCP Evidence Base: Sustainable Commodities Case Studies Case Study

CONIFEROUS LUMBER,

CONIFEROUS/NON-CONIFEROUS PULP AND PAPER

December 2006

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

TABLE OF CONTENTS

EXECUTIVE SUMMARY ......................................................................................... IV

1 COMMODITY OVERVIEW (CONIFEROUS LUMBER)....................................15

2 COMMODITY OVERVIEW (PULP AND PAPER) ............................................18

3 SUPPLY AND DEMAND STATISTICS AND TRENDS....................................20

4 POLICES AND INITIATIVES............................................................................26

5 SUPPLY CHAIN ANALYSIS ............................................................................28

6 IMPACT ASSESSMENT. .................................................................................42

7 CASE STUDIES – LATVIA AND ESTONIA.....................................................57

8 SUMMARY .......................................................................................................70

9 BIBLIOGRAPHY ..............................................................................................78

10 SEARCH TERMS .........................................................................................82

List of Figures

Figure 1: Growth in UK per capita consumption of paper and paperboard .............. vii Figure 2: Growth in UK per capita consumption of paper and paperboard ..............19 Figure 3: UK Softwood Lumber Trade Statistics (Source UN Comtrade).................20 Figure 4: Forest related statistics for top UK trade partners (Source: FAO State of

the World’s Forests 2005) .........................................................................21 Figure 5: Overview of supply chain for softwood lumber..........................................28 Figure 6: Pulp production overview diagram............................................................34 Figure 7: Overview of emission in pulp and paper production and use....................37 Figure 8: Contaminants by processing stage...........................................................38 Figure 9: Overview of impacts related to pre-harvest activities ................................42 Figure 10: Overview of impacts of harvesting stage ................................................48 Figure 11: Typical forest lifecycle fertilisation consumption .....................................51 Figure 12: Typical forest costs and energy consumption—base and alternate case51 Figure 13: Overview of impacts from milling process...............................................54 Figure 14: Air emissions from planed dry lumber production ...................................55 Figure 15: Latvia land cover.....................................................................................57 Figure 16: Latvia main tree species .........................................................................57 Figure 17: Latvia international trade in forest products ............................................60 Figure 18: Estonia land cover ..................................................................................64 Figure 19: Estonia main tree species.......................................................................64 Figure 20: Growth of timber production from public and private lands in Estonia ...65 Figure 21: Estonia international trade in forest products..........................................66 Figure 22: Top Bleached Hardwood Producing Countries, BRACELPA. .................73 Figure 23: Growth of Bleached Hardwood Production, BRACELPA. .......................74 Figure 24: Pulp and paper trade statistics for Brazil.................................................75 Scott Wilson December 2006 ii

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

List of Tables

Table 1: Top global imports and exporters................................................................ iv Table 2: Top UK Trade Partners ................................................................................v Table 3: Contaminants by processing stage ............................................................. xi

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

Executive Summary

Background

Forest products including coniferous lumber and coniferous/non-coniferous based pulp and paper products represent major UK commodity imports with significant potential environmental and social impacts depending on the nature of their production.

Coniferous (softwood) lumber is widely used in residential and commercial construction in the UK. It is also used to manufacture products including windows, doors, decorative mouldings, furniture, shipping boxes, pallets, railway ties, bridge timbers, decking and artistic products. By-products of softwood milling such as sawdust and wood chips are used to produce engineered materials including multi-density fibreboard, particle board, oriented strand board, and glue laminated beams. Wood chips and pulp grade logs are also used to produce pulp and subsequently paper products.

The softwood lumber, pulp and paper industries are characterised by high barriers to entry in the form of large fixed capital costs for harvesting, milling and manufacturing equipment. Property rights to forest resources must be secured through timber licences for a significant period of time if capital investments are to produce reasonable returns. Many companies exhibit a high level of vertical integration, owning timber licences, harvesting operations, lumber mills, and secondary manufacturing mills.

Economies of scale have led to the concentration of production capacity within a group of large multinational companies that have operations, investments and timber licences in many parts of the world. Smaller companies are present in lumber milling and paper manufacturing, but less so in pulp making. Smaller companies usually service domestic markets or produce speciality products for international trade. Global Production Table 1: Top global imports and exporters

Top global exporters

Value of export (US$) Top global importers Value of imports(US$)

Canada 8,611,284,023 USA 9,670,494,601

Sweden 2,781,825,272 Japan 2,633,838,402 Finland 1,827,213,403 UK 1,822,919,588 Austria 1,558,252,254 Italy 1,342,113,303 Russian Fed. 1,467,690,769 Germany 972,319,000

UK Consumption

The UK is the world’s third largest importer of softwood lumber. The total value of UK softwood lumber imports for 2004 was US$1,822,919,588. The same year the

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. UK imported $9,211,253,190 of paper and paperboard products and a further $882,700,357 of pulp to support domestic paper making operations. Table 2 below provides data on the UK’s main trade relationships in coniferous lumber, pulp and paper products.

Table 2: Top UK Trade Partners

Trade Partner Value of import (US$) % of total UK imports of lumber

Coniferous Lumber Sweden 60,234,915 33 Finland 361,437,039 20 Latvia 323,297,135 18 Russian Fed. 119,148,378 7 Estonia 71,361,397 4 Other Countries 34,533,724 19 Total 1,822,919,588 Paper and paper board Germany 1,664,190,879 18 Finland 1,436,227,726 16 Sweden 1,184,726,347 13 France 952,923,347 10 Netherlands 599,699,269 7 Other countries 3,373,485,595 36 Total 9,211,253,190 Pulp and Waste Paper Canada 16,455,2574 19 Brazil 135,882,477 15 USA 124,920,239 14 Sweden 117,897,146 13 Finland 65,842,598 8 Other Countries 273,605,323 31 Total 882,700,357

Uses Coniferous Timber

Construction industry

Coniferous lumber is widely used in residential and commercial construction. Milled in standard dimensions (2 x 4, 2 x 6, 2 x 8, 4 x 4 etc.) and in rough and finished grades, it exhibits consistent strength characteristics and can be easily cut, shaped, glued, nailed, screwed, joined and painted. It is easy to work with compared to non-wood substitutes such as steel studs, concrete, brick and composite materials. Different softwood species exhibit different qualities that make them suitable for specific applications. For example, Douglas fir is strong with few knots making it preferable for framing and mouldings; cedar is aromatic and contains natural

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. preservatives useful in exterior applications; spruce and pine are light and relatively inexpensive making them practical for mouldings, panelling and furniture.

Secondary Manufacturing

Coniferous wood is used in the manufacturing of many products. Rough lumber undergoes secondary milling and shaping for use in windows, doors, and decorative mouldings. Many other items are produced from softwood (coniferous) lumber including furniture, boats, shipping boxes, pallets, railway ties, bridge timbers, decking and artistic products. By-products of softwood milling such as sawdust and wood chips can be used to produce multi-density fibreboard, particle board, oriented strand board, wood pellets, cement board, engineered beams, pulp and other products. Wood Pulp

Pulp is an intermediate product used to make paper products. There are many different types of pulp derived from various fibres methods of production. There are substantially more types of paper. Paper is used in magazines, books, stationary, office paper, boxes, packaging, tissues, and labels. It can be coated with a wide variety or materials including tar for weather proofing buildings or chemicals for printing photographs. There are pressure sensitive papers, heat sensitive papers, light sensitive paper and so on. Paper manufacturing and use is an ever expanding realm that is limited largely by imagination.

In 2004 the UK was the 12th largest per capita consumer of paper products in the world. On average, each person consumed about 204kg of paper and paperboard. This was about half way between the European average (129kg) and the North American average (309kg). The global per capita consumption of paper and paperboard is 52kg and is expected to rise. The following figure illustrates the rise in consumption that has occurred over the last four decades within the UK .

Trends Current

For the three commodities assessed, each has its own current trend. For Pulp and waste paper, 2005 consumption is lower than that from 2001, after a dip in 2002-2003.

For paper and paper board, consumption per capita has increased since the 1960s with a corresponding increase in total imports of paper and paper board relative to 2001.

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UK Paper and paperboard consumption per

200

1998

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Kgs

of p

aper

and

pap

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Figure 1: Growth in UK per capita consumption of paper and paperboard

Future

With current demand for paper for printing and office function, in addition to use in the building trade.

Supply Chain Overview

Softwood Lumber

The stages of production of lumber include pre-harvest forest management, harvest, transportation, milling, secondary manufacturing, trading and transportation.

Given the high degree of competition in international lumber markets, most of the product entering into international trade is produced by large forestry companies. These companies use high volume, capital intensive mills that employ advanced technological processes optimised to produce specific wood products at the lowest price possible. The costs of constructing or retrofitting a mill are enormous – in the hundreds of millions of dollars. As such, the choice of technology a mill locks into is a critical decision that will affect its cost structure and competitiveness for many years.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

Pulp and Paper

The main stages in pulp and paper manufacturing consist of the preparation of the raw materials (debarking and chip making), producing raw pulp, bleaching the pulp, and manufacturing paper.

Most pulp is produced by the chemical pulping method – cooking wood chips under pressure in a sulphite or sulphate mixture to remove the lignin that binds together the cellulose wood fibres. This method produces high quality pulp that maintains the long fibre length and hence gives paper high tear strength. However, the yield of pulp from each tonne is low, about 43% of the weight of wood chips entering the process. It is also become brown from the chemical process and requires bleaching for many uses.

Pulp is also produced by mechanical means—grinding the wood up into very small bit with the lignin still intact. This process breaks up much of the wood fibre and consequently results in paper with lower tear strength and a slightly dull colour that may yellow over time. The mechanical method produces a very high yield per tonne of input wood chips. The resulting pulp is well suited to making newsprint for newspapers.

Alternatives of the mechanical pulping process are, thermo-mechanical pulping that steams the wood chips before they are ground, and chem.-thermomechanical which uses pre-treats the wood chips with chemicals and steam before grinding.

Paper is made when a dilute suspension of pulp and other fillers are deposited in layers on a very fine moving screen. The mixture is pressed and dried through a series of heated hollow rollers. Chemical additives and pigments may be included to impart specific properties and to add colour.

Key Nodes Impacts

Environmental impacts occur at each stage of production: pre-harvest forest management activities, harvesting, transporting, milling, secondary manufacturing and transporting. The magnitude of the impacts depends on the characteristics of the initial forest and the methods of harvesting and milling.

Pre-harvest forest management

Environmental impacts related to proactive establishment of a commercially viable forest can include the following: air pollution and damage from use of fire; changes in soil stability; water pollution from chemical herbicides, pesticides and fertilisers; and changes in carbon stocks. The magnitude of impacts needs to be considered from the context of changes in the landscape conditions.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. For example, reforesting a previously deforested area into a commercial forest will reduce soil erosion, sequester carbon and provide wildlife habitat. However, if the original forest had been in an old growth state prior to being cut, then the reforested land will provide diminished ecosystem services and will exhibit less biological diversity then the reforested land, particularly if reforestation activities are intended to promote the emergence of specific high commercial value trees and discourage the emergence of low value tree species.

As forest management moves along a progression from natural regeneration processes to actively managed plantation process, the forest becomes more homogeneous with fewer species that are closer to the same age. These conditions will provide favourable habitat for some plants and animals while not supporting others. Given the enormous scales at which forest landscapes are manipulated, the cycle of deforestation and reforestation has the potential to significantly alter the biological diversity.

Chemical runoff associated with fertiliser and herbicide application can also contribute to surface and ground water contamination. Usually, fertilisers and herbicides are applied by aerial spraying which increases the likelihood of contamination of surface water and also increases exposure related health risks to nearby communities as a result of conveyance of chemicals by wind.

Harvesting

In broad terms, harvest related impacts can include loss of wildlife habitat, changes in soil stability, soil erosion and compaction, sedimentation of surface water, damage to fish spawning rivers, air pollution, and changes in carbon stocks. The magnitude of the impacts are directly related to the size of the cut block, the amount of residual trees left standing, and the intensity of mechanisation in the extraction process. The most significant environmental impacts occur where very large areas of forest are clear cut using heavy machinery, no residual trees are left standing, and logs are transported a long distance to the processing point.

Harvesting results in soil erosion, soil structure breakdown and loss of soil nutrient value. The soil structure is damaged in the process of cutting down trees and building the network of roads to access the cut blocks. Soil erosion and soil compaction also occur as a result of heavy machinery driving back and forth between the cutting area and the landing area where logs are loaded onto trucks for transport to the processing area. Erosion is exacerbated if the logs are dragged (skidded) over the ground to the landing site. Sediment is deposited on shallower grades and into streams and other water courses. Sedimentation of rivers and streams can be very detrimental to fish and other aquatic biodiversity.

Commercial scale harvesting activities employ a range of heavy machines that produce emissions during their operation. Emissions are directly related to the level of mechanisation of the harvesting activities and the distance that the logs must be transported between landing areas and processing points.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. Harvest activities result in sizable step level changes in carbon stocks. As trees grow they sequester carbon in their crown, stem, roots and soil. When trees are cut down this sequestration process stops. Carbon continues to remain stored within the stem which is turned into lumber and pulp products. However, roots, tree limbs and foliage that is left in the forest decay and become sources of greenhouse gases, especially CO2.

Social and economic impacts

Social impacts related to pre-harvest activities include land rights, employment, access to the forest for traditional activities, and the consequences of environmental degradation.

Impacts related to land rights are usually country and location specific but generally involve the displacement of local people in advance of logging activities. In many cases this involves forest companies or private landowners forcing indigenous or aboriginal people away from lands that they have historically occupied but of which they do not have formal ownership. In most cases this type of displacement occurs in virgin or primary forests. Displacement of indigenous people can have profound negative impacts on their wellbeing since their traditional activities, sources of food, livelihoods, culture and spirituality are closely related to the primary forest. When these forests are cut down indigenous people must relocate, either to other remaining primary forests or to urban areas. This can be a source of conflict with other groups and can lead to a breakdown of traditional social structures within the indigenous population. Their relative poverty when removed from the forests that have sustained them makes them an especially vulnerable population.

Milling

Environmental impacts associated with lumber milling are closely related to the technology used. In general terms, the main environmental impacts of milling relate to electricity and fuel use, water consumption, emissions to air, and solid emissions.

Electricity is used to operate saws and conveyors, drying kilns, boilers, planing machines, and mill lighting. Boilers generate steam used to dry the green wood prior to planing. Boilers are fuelled primarily by natural gas or by wood based fuels that are derived from the by-products of the milling process. Combustion of wood based fuels in boiler operations produce emissions of the following substances, CO2, CO, acetaldehyde, formaldehyde, phenol, NOx, SOx, particulates, and inorganic material.

Water is mainly used to wet the logs prior to cutting. It is also used to produce steam that is used in the drying process. Water used in milling operations is usually recycled or evaporated and not discharged. This may not be the case in some developing countries. Water use in milling operations has been estimated to be between 250-600kg to produce about 2 cubic meters of dry planed lumber depending on the production process.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

Manufacturing

The primary environmental impacts associated with the production of pulp and paper products relate to the forest management practices that generate the raw material (wood chips or pulp wood) and the impacts associated with producing pulp and making common paper products.

The table below highlights some of the main contaminants associated with producing pulp, bleaching it and turning it into paper.

Table 3: Contaminants by processing stage

Pulping Bleaching PapermakingSodium Hydroxide Residues Hydrogen Peroxide Waste sludgeSulfuric/Sulfurous Acid Elemental Chlorine Bleaching and pulping cHydrochloric Acid Chlorinated Compounds SVOCs (in coatings)Hydrogen Sulfide Sodium Hydrosulfite VOCs (in coatings)Ammonia Polychlorinated Biphenyls (PCBs) SlimicidesLead Dioxins and Furans Chlorinated phenolsCyanide Some aminos, and quaterZinc compoundsChromium Some organosulfur compResin Some silver compoundsUnnatural Fatty Acids and Chlorinated Analogs Titanium residues

Oil and grease discharges

ontaminants

nary ammonium

ounds

collected in sedimentsPolychlorinated biphenyls

Source: US Environmental Protection Agency

The most significant environmental impacts of pulp and paper making related to the pulping and bleaching processes. Of particular concern are liquid and air emissions.

Liquid effluent

Specific effluent composition and its consequent environmental impact depend both on the method of production and the level of waste water treatment. Wastewater discharge varies from 20-250 cubic metres per metric ton (m Vt) of air dried pulp (ADP) depending on the process used. The primary liquid effluent concerns centre around the pulping and bleaching processes. Liquid effluent discharges of concern include: • Organic pollution and suspended solids: these impose a negative impact by

removing oxygen from natural ecosystems as they degrade. Common organic pollutants in liquid effluent from pulp mills include cellulose fibre, carbohydrate, starch and hemi-cellulose. Effluent also contains high levels of suspended solids which can increase water opacity; cover the tops of rivers and lakes. Further the suspended solids can absorb resin, fatty acids, and heavy metals which persist and bio-accumulate in the environment

• Chlorinated organic compounds: The presence of these compounds depends on the pulping and bleaching process used. These compounds can include dioxins, furans and other adsorbable organic halides. The introduction of elemental chlorine free bleaching methods has resulted in a significant decrease in these

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emissions although many older mills still use elemental chlorine bleaching. Concerns have been raised about the adequacy of the current AOX measure to predict toxicity.

Dioxins are highly toxic, persistent, bio-accumulative and present significant health risks to humans, fish and other animals. The exact effects and maximum safe exposure levels are the subject of considerable debate. Furans are also toxic but to a lesser degree than dioxins. Dioxins and furans can be found in the pulp itself as well as in liquid effluent, raising concerns about the levels at which they may occur in finished paper products in addition to wastewater treatment sludge that is land filled or incinerated.

Air emissions

Emissions to air are dependent on the method of production and pollution abatement technologies employed. Emissions to air from pulp and paper manufacturing are high relative to other industries, but are generally considered to be less of a concern than those in liquid effluent.

Mills that employ the Kraft or sulphate method of pulping (the majority of mills), produce highly malodorous emissions of reduced sulphur compounds including hydrogen sulphide, methyl mercaptan, dimethyl sulphide, and dimethyl disulfide. Other potential emissions include carbon monoxide, particulate matter, sulphur oxide, nitrogen oxides, and volatile organic compounds from black liquor oxidation. Sulphite process mills emit sulphur oxides. Mechanical and thermomechanical pulping processes generate significantly lower quantities of air emissions.

There has been some debate whether the sequestration by forests offset the emissions of greenhouse gases from the production, transportation and disposal of pulp and paper products. A recent study by the International Institute for Environment and Development (IIED) commissioned by the World Business Council on Sustainable Development concluded that the full paper cycle is a contributor of greenhouse gases, emitting around 450 million CO2 equivalents per year.

Energy use

A significant amount of energy is consumed in the production of pulp and paper—between 2000-6500 kWh per tonne of dried pulp. Chemical pulping is more energy intensive, although much of the energy is produced by burning waste by-products to produce steam.

Worldwide environmental performance

Environmental performance in the pulp and paper industry exhibits considerable variation across different regions. Asia tends to have the highest average emission and effluent levels, while North America and Europe have the lowest. China and India have particularly high effluent loads that are associated with non-wood based pulp production. There are considerable differences between mills within regions with some performing better than average and others significantly worse.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. Social and economic impacts

The most significant social and economic impacts relate to: 1) displacement of local people from their lands 2) closing of mills and the subsequent loss of livelihoods for rural populations 3) health related impacts from air and water pollution resulting from pulp and paper

manufacturing. There are a wide variety of toxic chemicals and other pollutants released in the effluent and emissions of pulp and paper plants that are of significant concern to human health. In addition to directly endangering local populations, they are persistent and bio-accumulate in fish and shell fish and as such present a secondary exposure risk through consumption

Conclusions

The impacts for the wood industry have added complexity through the fact that two streams are both related and separate processes. Lumber, it is, clear has direct impacts on biodiversity through the establishment of forestry plantations and deforestation of old growth forest for lumber. This deforestation is exacerbated through the degradation of land through the removal of the raw timber (i.e. through soil compaction, removal of under storey and destruction of habitats.

Pulp production is also dependent on the cultivation and extraction of raw lumber however the processing of pulp for paper and other paper products involves many damaging processes including pulping, bleaching and paper making

The forestry industry is a mature sector, with established initiatives such as the FSC which are underpinned by credible studies. In so far as scientific papers are concerned there is an abundance of robust material. However, in regard to the robustness of the data, there are questions over the reliability of trade figures due to the preponderance of ‘grey’ and black market illegal timber being imported through staging countries such as Russian temporal old growth lumber imported through Finland. Nonetheless the figures aren’t deemed to be significantly skewed.

Reducing harvest related environmental impacts can be effectively achieved through science based forest management practices that seek to understand desirable ecosystem dynamics and then develop strategies to maintain them. Best practices include: • Taking an ecosystem approach to forestry operations that seeks to first

understand local ecosystem dynamics, model their interdependencies, develop indicators that enable ecosystem services and ecological health to be monitored, and track indicators over time to ensure that ecological integrity and biological diversity are not diminished.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. • Replanting recently harvested natural forests with the same natural mix of

species that existed before, especially using cone and seed stock from the original trees.

• Retaining a portion of standing dead snags and also deadfall on the forest floor to provide niche habitats

• Avoiding cutting on steep slope and near riparian zones • Maintaining corridors between cut blocks to allow wildlife to travel between

forested areas and to assist in re-establishing natural plant and animal populations.

• Reducing soil erosion and compaction by reducing the number of times machines drive over the land and using large tires to distribute machine weight.

• Constructing roads with proper grading and water damming features to reduce sediment loads in surface water.

• Undertaking meaningful consultations with affected stakeholders to minimise negative impacts, respect traditions and important site, and provide economic benefits for local populations. Integrating traditional indigenous knowledge of forest ecosystems can also enrich western scientific approaches to forest management.

The pulp and paper manufacturing industry is complex. There are a wide variety of production methods each with associated environmental impacts. As such, specific mitigation measures are beyond the scope of this paper. In general, elemental chlorine free (ECF) and totally chlorine free (TCF) bleaching processes produce far less toxic waste than elemental chlorine bleaching and as such are preferable. The bleaching process itself is a significant contributor to overall environmental impacts and as such, the use of unbleached paper products is preferable, especially in packaging. Modern pollution abatement techniques are necessary and need to be adhered to in order to reduce impacts. Modern technologies can also reduce energy use and increase recycling of production materials within the operations. Reducing paper use and increasing paper recycling are very important measures to reduce the overall impacts of pulp and paper production.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

1 Commodity Overview (Coniferous Lumber)

1.1 Approach 1.1.1 Forest products including coniferous lumber and coniferous/non-coniferous

based pulp and paper products represent major UK commodity imports with significant potential environmental and social impacts depending on the nature of their production. The supply chains for pulp and paper products exhibit some degree of overlap with the supply chain of coniferous lumber. However, since non-coniferous materials are also important inputs into pulp and paper making there are differences that depend on the final product and its method of production. Consequently, for the purposes of this analysis, coniferous forest products and pulp/paper products will be considered distinct commodities with some lifecycle overlap rather than different outputs along the same supply chain. This will allow for a more accurate assessment of market characteristics, and social and environmental impacts.

1.1.2 This paper will begin with an analysis of coniferous lumber including case studies of Latvia and Estonia. This will be followed by an analysis of pulp and paper including a case study of Brazil. Main categories of market pulp will be considered; however, given the hundreds of final paper products such as newspapers, packaging material, hospital gowns, labels, pressure and heat sensitive papers, photographic papers etc. only several of the more common paper products will be included in this analysis.

1.2 Background: coniferous lumber 1.2.1 Coniferous forests extend along a wide band across North America, Europe

and Asia. Common tree species with market value include pine, spruce, cedar, fir, larch, Douglas-fir, hemlock, cypress, redwood and yew. Typically, conifers are evergreen trees or shrubs with linear, needle-like or scale-like leaves and seeds that are contained within cones. Also known as softwoods, they are distinguished from hardwood species by their internal structure which contains only two types of cells: tracheids and parenchyma cells.

1.2.2 There are more than 500 species of conifers distributed worldwide representing some of the smallest, largest and oldest living woody plants known. Although there are exceptions, the wood of most conifers is soft and easy to work, making it an ideal material for construction, millwork (mouldings, doors, windows) and furniture. Conifers are an important input into a variety of pulp and paper products.

1.2.3 While coniferous forests were widely distributed across Western and Central Europe in the past, original forests virtually disappeared over the last few hundred years as agricultural and industrial activity expanded. By the 19th century, only 25% of the forests that once covered most of the land

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

remained. Today, only about 1% of the forests in Western Europe can be considered original. Great efforts have been made to re-establish forest cover in many parts of Europe. In Sweden, forests now cover 68% of the land, while in Germany and France the figures are 31% and 27% respectively. Although the UK has favourable growing conditions, forests have been re-established on only 12% of its landi. A lack of domestic coniferous forests to meet growing demand means that they UK must import significant quantities of coniferous lumber and pulp products from other countries.

1.3 Uses of coniferous lumber

Construction industry

1.3.1 Coniferous lumber is widely used in residential and commercial construction. Milled in standard dimensions (2 x 4, 2 x 6, 2 x 8, 4 x 4 etc.) and in rough and finished grades, it exhibits consistent strength characteristics and can be easily cut, shaped, glued, nailed, screwed, joined and painted. It is easy to work with compared to non-wood substitutes such as steel studs, concrete, brick and composite materials. Different softwood species exhibit different qualities that make them suitable for specific applications. For example, Douglas fir is strong with few knots making it preferable for framing and mouldings; cedar is aromatic and contains natural preservatives useful in exterior applications; spruce and pine are light and relatively inexpensive making them practical for mouldings, panelling and furniture.

Secondary Manufacturing

1.3.2 Coniferous wood is used in the manufacturing of many products. Rough lumber undergoes secondary milling and shaping for use in windows, doors, and decorative mouldings. Many other items are produced from softwood (coniferous) lumber including furniture, boats, shipping boxes, pallets, railway ties, bridge timbers, decking and artistic products. By-products of softwood milling such as sawdust and wood chips can be used to produce multi-density fibreboard, particle board, oriented strand board, wood pellets, cement board, engineered beams, pulp and other products.

1.4 Market structure 1.4.1 The softwood lumber industry is characterised by high barriers to entry in

the form of large fixed capital costs for harvesting and milling equipment. Property rights to forest resources must be secured through timber licences for a significant period of time if capital investments are to produce reasonable returns. Many companies exhibit a high level of vertical integration, owning timber harvesting licences, harvesting operations, lumber mills, and secondary manufacturing mills for engineered products

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such as micro-laminated beams or pulp and paper. Often the forestry company owns and operates timbre licences and the lumber, pulp and paper mills but contracts out the harvesting and transportation operations to drive costs down.

1.4.2 Knowledge of market conditions among the producers of lumber, pulp and paper products is very high. For example, a lumber or pulp/paper exporter will know where 95% or more of its product is going and will directly control the trade of around 75% of its products. Trading companies will control the remaining share, with the knowledge of the producer. As such, changes in market conditions are quickly internalised.

1.4.3 Significant non-industry actors include environmental groups, government agencies (often with competing interests, i.e. environmental protection vs. revenue generation), aboriginal groups, wood and paper retailers, and certification organisations.

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2 Commodity overview (Pulp and Paper)

2.1 Background: Pulp and paper 2.1.1 Pulp refers to material derived from wood and other inputs and prepared by

chemical or mechanical means for use in making paper and cellulose products. Globally, the vast majority of pulp (90%) is derived from wood, with the remainder (10%) originating in straw, bamboo, bagasse, kenaf, flax, hemp, cotton and other fibresii. Most of pulp produced by developed countries is from a wood base, while about 60% of the fibre used for pulp in developing countries comes from non-wood sourcesiii.

2.1.2 Wood pulp is an intermediate product. It is the output of chemical and mechanical processes, and is an input into paper product manufacturing. Market pulp is an internationally traded commodity that is derived from softwood trees such as spruce, pine, fir, larch and hemlock. Hardwoods such as eucalyptus and birch are also usediv. At a cellular level, these trees exhibit different qualities that make them useful for diverse applications.

2.1.3 Wood fibre, the main component of paper products, is composed of cellulose which makes up the plant cell walls. The structure and shape of the cellulose wood fibres varies among different tree species. The fibre characteristics are the main determinants of the properties of the finished paper. The two most important fibre characteristics are the length of the wood fibre and the thickness of the fibre wallsv. Longer fibres, such as those found in South yellow pine, increase the tearing strength of paper. These fibres are used in packaging papers and paperboardsvi. Short fibres, from trees such as birch or aspen, produce smooth low strength printing and photocopying papers. Trees that have thick cell fibre walls, such as Douglas fir, produce paper with high tearing resistance and low bursting and tensile strength, desirable properties for filters and absorbent products like tissuesvii. Fibres with thin cell walls, such as spruce and western red cedar, produce smooth papers with low porosity but high tensile strength. They are often blended with other fibres to make magazine and bible papers, and can also be used to produce cloth like papers such as surgical gownsviii.

2.1.4 Pulp can be produced by chemical and mechanical methods. In 2004, about 93% of market pulp was produced by chemical processes, and the remaining 7% by mechanical processes. Even within these processes, there is a wide variety of technologies employed using a diversity of inputs. This complexity limits this research paper to an analysis of the most common methods and their primary environmental, social and economic impacts.

2.1.5 In the UK, 25% of the wood pulp used to produce paper and paper board is imported. While there is a small mechanical pulping industry in the UK, the vast majority (68%) of fibre used in the UK paper industry is recoveredix.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 2.1.6 There are three domestic paper mills in the UK that produce their own wood

pulp and turn it into paper products. Between them they produce and use 6% of the raw material requirements of the paper industryx.

2.2 Uses 2.2.1 Pulp is an intermediate product used to make paper products. There are

many different types of pulp derived from various fibres methods of production. There are substantially more types of paper. Paper is used in magazines, books, stationary, office paper, boxes, packaging, tissues, and labels. It can be coated with a wide variety or materials including tar for weather proofing buildings or chemicals for printing photographs. There are pressure sensitive papers, heat sensitive papers, light sensitive paper and so on. Paper manufacturing and use is an ever expanding realm that is limited largely by imagination.

2.2.2 In 2004 the UK was the 12th largest per capita consumer of paper products in the world. On average, each person consumed about 204kg of paper and paperboard. This was about half way between the European average (129kg) and the North American average (309kg). The global per capita consumption of paper and paperboard is 52kg and is expected to rise. The following figure illustrates the rise in consumption that has occurred over the last four decades within the UKxi.

UK Paper and paperboard consumption per

200

1998

1995

1992

1989

1986

1983

1980

1977

1974

1971

1968

1965

1962

Kgs

of p

aper

and

pap

erbo

ard

capita

0

50

100

150

200

250

20041

Figure 2: Growth in UK per capita consumption of paper and paperboard

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3 Supply and demand statistics and trends

3.1 UK trade data for coniferous lumber 3.1.1 Figure 3 below provides data on the UK’s main trade relationships in

coniferous lumber. The UK is the world’s third largest importer of softwood lumber. The total value of UK imports for 2004 was US$1,822,919,588. UK sources most of its lumber from Sweden, Finland, Latvia, Russia and Estonia. Of these countries, Latvia and Estonia are the most heavily dependent on the UK as an export partner.

Coniferous LumberCommodity Description Lumber, sawn, planed, etc. ConiferCommodity Code SITC Rev.1 2432Data Year 2004Source UN Comtrade

Total Global Lumber Exports $23,653,454,410

Top Importers Top ExportersUSA $9,670,494,601 Canada Japan $2,633,838,402 Sweden United Kingdom $1,822,919,588 Finland Italy $1,342,113,303 Austria Germany $972,319,000 Russian Federation

Total UK imports of lumber $1,822,919,588% of global import market 8%

To

$8,611,284,023$2,781,825,272$1,827,213,403$1,558,252,254$1,467,690,769

p UK lumber import partners Value of imports US$ Net weight (kg) % of total UK imports of lumber33%20%18%7%4%

ports to UK represent % of this countr

Sweden $602,341,915 1,283,899,900Finland $361,437,039 769,941,682Latvia $323,297,135 902,600,390Russian Federation $119,148,378 406,713,606Estonia $71,361,397 183,494,030

Top UK lumber import partners cont. Exy's export market

22%20%64%8%

31%

mber exports are % of total exports 2%3%

12%1%4%

Sweden Finland Latvia Russian Federation Estonia

Top UK lumber import partners cont. total lumber exports total exports of all commodities luSweden $2,781,825,272 $122,994,380,448Finland $1,827,213,403 $60,850,372,713Latvia $504,164,966 $4,378,604,037Russian Federation $1,467,690,769 $181,633,800,000Estonia $229,128,254 $5,539,660,877

Top UK lumber import partners cont. Top five lumber export partners for this countrySweden UK, Denmark, Japan, Norway, GermanyFinland UK, Japan, France, Germany, NetherlandsLatvia UK, Japan, Germany, Ireland, USARussian Federation Japan, Egypt, UK, Germany, FranceEstonia UK, Germany, Netherlands, Denmark, USA

Figure 3: UK Softwood Lumber Trade Statistics (Source UN Comtrade)

3.2 Forestry statistics for top five UK trade partners 3.2.1 Figure 4 below provides data on forest characteristics, production and

employment for each of the UK’s top five coniferous lumber trade partners.

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Forestry Statistics for Top 5 UK Import Partners

Total Land Area (ha) 41,162,000 30,447,000 6,205,000 1,688,850,Total Forest Area (ha) 27,528,000 22,500,000 2,941,000 808,790,Percent Forest Cover 67% 74% 47%

Breakdown of forest types, 2005 Primary forest (the most biodiverse forest type) (ha | %) 4,726,000 17% 1,419,000 6% 14,000 1% 255,470,Modified natural (ha | %) - - - - 2,282,000 78% 536,358,Semi-natural (ha | %) 22,135,000 80% 21,081,000 94% 644,000 22%Production plantation (ha | %) 667,000 2% - - 1,000 0% 11,888,

Change in Forest Cover Total Change 1990-2005 (ha | %) 161,000 0.6% 306,000 1.4% - - -160,

Ownership of forest land, 2000 Public (%) 20% 32% 54% 100%Private (%) 80% 68% 45% 0Other (%) 0% 0% 1%

Designated functions of forest – primary function 2005 Production (%) 73% 91% 79%Protection (%) 0% 0% 6%Conservation (%) 12% 7% 14%

Carbon stock in forest, 2005 Carbon in above-ground biomass (M t) 905 675 178 25,78 Carbon in below-ground biomass (M t) 265 140 52 6,423 Soil carbon (M t) 335 - 184 137,00

Wood removal 2005Industrial roundwood (1000 cubic m) 68,740 59,095 10,580 129,Wood fuel (1000 cubic m) 8,040 5,200 920 50,Total wood removal 2005 (1000 cubic m) 76,780 64,295 11,500 180,Total wood removal 2005 (% of growing stock) 2% 3% 2%

Value of wood and non-wood forest product removal 2005 Industrial roundwood (US$) $2,824,280,000 $2,614,351,000 - $1,811,600,Wood fuel (US$) $149,480,000 $151,450,000 - $166,980,Non-wood forest products (US$) $203,800,000 $154,656,000 - $4,820,Total value (US$) $3,177,560,000 $2,920,457,000 - $1,983,400,Total value ($USD/ha) $115 $130 -

Employment in forestry 2000 Total person years of employment 17,000 24,000 19,000 196,

Sweden Finland Latvia Russian Fe

000 4,239,000000 2,284,000

48% 54%

000 32% 142,000 6%000 66% 1,390,000 61%

- - 751,000 33%000 2% 1,000 0%

000 -0.02% 121,000 6%

38%% 22%

0% 40%

77% 72%9% 22%2% 6%

7 13038

0 356

400 7,502600 2,100000 9,602

- 2%

000 $268,576,000000 $19,601,000000 $4,802,000000 $292,979,000$2 $128

000 9,000

Estoniaderation

Figure 4: Forest related statistics for top UK trade partners (Source: FAO State of the World’s Forests 2005)

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3.3 UK trade data for pulp and paper

1. Total global imports (total amount of the commodity the UK imports globally)

SITC Rev 3 64- Paper and paper board

Period Trade Flow Reporter Partner Commodity Trade Val

PAPER,PAPERBOARD,ETC.

[SITC Rev.3 code 64]

SITC Rev 3 251- Pulp and waste paperNote: SITC Rev 3 251 includes 25112 (waste paper), which is not pulp.

Period Trade Flow Reporter Partner Commodity Trade Val

PULP AND WASTE PAPER[SITC Rev.3 code 251]

2. Top Global producers (the top trade partners that the UK imports the commodit

SITC Rev 3 64- Paper and paper board Period Trade Flow Reporter Partner Code Trade V

2004 Import United Kingdom Germany 64

ue NetWeight (kg)

ue NetWeight (kg)

y from)

alue NetWeight (kg)

$1,662004 Import United Kingdom Finland 64

4,190,879 N/A$1,43

2004 Import United Kingdom Sweden 646,227,726 N/A

$1,182004 Import United Kingdom France 64

4,726,374 N/A$95

2004 Import United Kingdom Netherlands 642,923,347 N/A

$592004 Import United Kingdom Austria 64

9,699,269 N/A$42

2004 Import United Kingdom Italy 642,886,303 N/A

$342004 Import United Kingdom Belgium 64

4,359,476 N/A$34

2004 Import United Kingdom Norway 643,378,859 N/A

$33

SITC Rev 3 251- Pulp and waste paper

Period Trade Flow Reporter Partner Code Trade V

2004 Import United Kingdom Canada 251

4,619,468 N/A

alue NetWeight (kg)

$162004 Import United Kingdom Brazil 251

4,552,574 292,543,253$13

2004 Import United Kingdom USA 2515,882,477 308,940,067

$122004 Import United Kingdom Sweden 251

4,920,239 254,648,928$11

2004 Import United Kingdom Finland 2517,897,146 199,797,197

$62004 Import United Kingdom Chile 251

5,842,598 128,961,140$5

2004 Import United Kingdom Spain 2515,679,713 102,875,970

$52004 Import United Kingdom Portugal 251

3,482,506 101,560,730$2

2004 Import United Kingdom Norway 2519,040,413 57,538,669

$22004 Import United Kingdom Netherlands 251

6,754,374 39,353,911$1

United Kingdom World $88

All data downloaded from UN COMTRADE website the week of July 3, 2006. Queries in SITC Rev 3 coding system, and all are for da2004.

2004 Import United Kingdom World $9,21

2004 Import

7,142,571 31,323,593

N/A

1,710,461,7642,700,357

ta year

1,253,190

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Scott Wilson December 2006 23

3. Top partners global exports of the commodity

SITC Rev 3 64- Paper and paper board

Period Trade Flow Reporter Partner Code Trade V

2004 Export Austria World 64

alue NetWeight (kg)

$4,512004 Export Belgium World 64

2,104,546 N/A$4,92

2004 Export Finland World 646,874,087 N/A

$10,252004 Export France World 64

0,287,982 N/A$7,44

2004 Export Germany World 647,801,080 N/A

$18,012004 Export Italy World 64

7,019,000 N/A$5,74

2004 Export Netherlands World 642,664,363 N/A

$4,662004 Export Norway World 64

5,116,187 N/A$87

2004 Export Sweden World 649,843,636 N/A

$9,06

SITC Rev 3 251- Pulp and waste paper

Period Trade Flow Reporter Partner Code Trade V

2004 Export Brazil World 251

5,716,590 N/A

alue NetWeight (kg)

$1,722004 Export Canada World 251

2,367,893 4,988,790,443$5,61

2004 Export Chile World 2519,293,087 0

$1,212004 Export Finland World 251

2,203,978 2,552,571,338$1,20

2004 Export Netherlands World 2512,046,035 2,480,629,302

$582004 Export Norway World 251

2,450,073 3,082,138,717$22

2004 Export Portugal World 2511,333,516 556,095,022

$462004 Export Spain World 251

1,073,706 1,082,283,766$59

2004 Export Sweden World 2511,883,600 1,280,860,969

$2,023,477,445 3,776,158,7462004 Export USA World 251 $4,621,797,433 18,959,080,164

1

4. The proportion of all exports that the commodity contributes to the export partner's total exports

SITC Rev 3 64- Paper and paper board

Period Trade Flow Reporter Partner Code Trade Value NetWeight (kg)

2004 Export Austria World TOTAL $103,741,586,371 N/A2004 Export Belgium World TOTAL $306,438,248,028 N/A2004 Export Finland World TOTAL $60,915,847,980 N/A2004 Export France World TOTAL $410,699,752,809 N/A2004 Export Germany World TOTAL $916,585,593,000 N/A2004 Export Italy World TOTAL $353,491,959,277 N/A2004 Export Netherlands World TOTAL $290,477,040,439 N/A2004 Export Norway World TOTAL $80,488,778,368 N/A2004 Export Sweden World TOTAL $123,203,653,829 N/A

Reporter Paper and paper board as a % of all exports

Austria 4.35%Belgium 1.61%Finland 16.83%France 1.81%Germany 1.97%Italy 1.62%Netherlands 1.61%Norway 1.09%Sweden 7.36%

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Scott Wilson December 2006 24

SITC Rev 3 251- Pulp and waste paper

Period Trade Flow Reporter Partner Code Trade V

2004 Export Brazil World TOTAL

alue NetWeight (kg)

$95,002004 Export Canada World TOTAL

2,386,723 N/A$316,61

2004 Export Chile World TOTAL1,848,399 N/A

$30,892004 Export Finland World TOTAL

4,495,855 N/A$60,91

2004 Export Netherlands World TOTAL5,847,980 N/A

$290,472004 Export Norway World TOTAL

7,040,439 N/A$80,48

2004 Export Portugal World TOTAL8,778,368 N/A

$35,712004 Export Spain World TOTAL

2,169,560 N/A$182,72

2004 Export Sweden World TOTAL7,198,254 N/A

$123,202004 Export USA World TOTAL

3,653,829 N/A$817,90

Reporter Pulp and waste paper as a % of all exports

Brazil 1.81%Canada 1.77%Chile 3.92%Finland 1.97%Netherlands 0.20%Norway 0.27%Portugal 1.29%Spain 0.32%Sweden 1.64%USA 0.57%

5,426,395 N/A

6. The proportion of the commodity that UK imports represent

Reporter Code Export to World ExportAustria 64

to UK % Export to UK$4,512,104,546 $27

Belgium 647,628,393 6.15%

$4,926,874,087 $46Finland 64

9,988,067 9.54%$10,250,287,982 $1,34

France 645,124,231 13.12%

$7,447,801,080 $95Germany 64

6,495,964 12.84%$18,017,019,000 $1,69

Italy 644,003,000 9.40%

$5,742,664,363 $32Netherlands 64

1,964,181 5.61%$4,665,116,187 $47

Norway 649,769,472 10.28%

$879,843,636 $13Sweden 64

1,428,450 14.94%$9,065,716,590 $1,15

Reporter Code Export to World ExportBrazil 251

4,696,085 12.74%

to UK % Export to UK$1,722,367,893 $

Canada 25148,194,740 2.80%

$5,619,293,087 $151,642,097 2.70%Chile 251 $1,212,203,978 $Finland 251

13,731,865 1.13%$1,202,046,035 $

Netherlands 25168,482,489 5.70%

$582,450,073 Norway 251

$1,423,387 0.24%$221,333,516 $19,713,486 8.91%

Portugal 251 $461,073,706 $Spain 251

27,382,245 5.94%$591,883,600 $

Sweden 25172,221,305 12.20%

$2,023,477,445 $114,844,050 5.68%USA 251 $4,621,797,433 $1

Reporter Code Export to World ExportCanada 248

39,901,418 3.03%

to UK % Export to UK$9,307,274,732 $

Estonia 24876,145,446 0.82%

$275,152,677 $Finland 248

78,056,687 28.37%$1,838,084,913 $361,118,914 19.65%

France 248 $516,283,928 $Germany 248

56,441,816 10.93%$1,545,155,000 $1

Ireland 24806,672,000 6.90%

$75,152,006 $73,985,172 98.45%Latvia 248 $605,246,255 $3

Russian Federation 248

59,649,171 59.42%

$1,542,766,044 $100,230,715

6.50%

Sweden 248 $2,803,123,847 $642,481,393 22.92%USA 248 $2,251,202,506 $78,469,179 3.49%

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7. Land area under production

Country Forest AWS (1000 ha)Austria 3,352Belgium 639Brazil 68,000Canada 125,863Chile 3,900Estonia 1,932Finland 20,675France 14,470Germany 10,142Ireland 580Italy 6,013Latvia 2,413Netherlands 314Norway 6,609Portugal 1,897Russia 525,191Spain 10,479Sweden 21,236USA 694,000

9. National HectaresPaper and Paper Board

Trade Flow Reporter Partner Trade Value NetWeight (kg)Import United Kingdom Germany $1,664,190,879 N/A No estimate posImport United Kingdom Finland $1,436,227,726 N/AImport United Kingdom Sweden $1,184,726,374 N/AImport United Kingdom France $952,923,347 N/AImport United Kingdom Netherlands $599,699,269 N/AImport United Kingdom Austria $422,886,303 N/AImport United Kingdom Italy $344,359,476 N/AImport United Kingdom Belgium $343,378,859 N/AImport United Kingdom Norway $334,619,468 N/A

Pulp and Waste PaperTrade Flow Reporter Partner Trade Value NetWeight (kg) gha/t gha E

Import United Kingdom Canada $164,552,574 292,543,253 2.49 728,433Import United Kingdom Brazil $135,882,477 308,940,067 2.49 769,261Import United Kingdom USA $124,920,239 254,648,928 2.49 634,076Import United Kingdom Sweden $117,897,146 199,797,197 2.49 497,495Import United Kingdom Finland $65,842,598 128,961,140 2.49 321,113Import United Kingdom Chile $55,679,713 102,875,970 2.49 256,161Import United Kingdom Spain $53,482,506 101,560,730 2.49 252,886Import United Kingdom Portugal $29,040,413 57,538,669 2.49 143,271Import United Kingdom Norway $26,754,374 39,353,911 2.49 97,991Import United Kingdom Netherlands $17,142,571 31,323,593 2.49 77,996

Wood Simply Worked - Includes coniferous and non-coniferous species Trade Flow Reporter Partner Trade Value NetWeight (kg) gha/t gha E

Import United Kingdom Sweden $606,630,115 1,293,714,467 0.90 1,168,224Import United Kingdom Latvia $367,788,035 1,067,269,434 0.90 963,744Import United Kingdom Finland $363,170,083 773,125,625 0.90 698,132Import United Kingdom Russian Federation $125,258,649 425,445,386 0.90 384,177Import United Kingdom USA $111,092,406 86,408,935 0.90 78,027Import United Kingdom Canada $92,606,960 75,604,819 0.90 68,271Import United Kingdom Estonia $84,905,638 230,594,349 0.90 208,227Import United Kingdom Germany $83,342,724 158,087,811 0.90 142,753Import United Kingdom Ireland $62,814,197 121,702,897 0.90 109,898

sible without weights.

QF YF nha1.35 1.01 534,2371.35 0.58 982,4531.35 1.97 238,4191.35 2.56 143,9511.35 1.97 120,7421.35 2.51 75,5971.35 1.53 122,4331.35 3.82 27,7821.35 1.87 38,8161.35 3.94 14,664

QF YF nha1.35 2.56 338,0281.35 2.57 277,7761.35 1.97 262,5051.35 0.79 360,2221.35 1.97 29,3391.35 1.01 50,0711.35 2.07 74,5131.35 4.93 21,4491.35 3.34 24,373

Import United Kingdom France $56,045,769 55,998,645 0.90 50,567 1.35 3.58 10,463

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4 Polices and Initiatives 4.1.1 The forest products industry operates within a complex system of national

and international laws, environmental agreements, regulations, sustainability frameworks and certification schemes. They are the subject of a separate report and as such, this report will only highlight the main framework categories and give a few examples of each.

International agreements

• Convention on International Trade in Endangered Species of Wild

Fauna and Flora (CITES) • Convention to combat desertification • Convention on biological diversity • Framework Convention on Climate Change • Kyoto protocol and the Clean Development Mechanism • World Trade Organisation • North American Free Trade Agreement • Canada-US softwood lumber agreement • International trade dispute resolution bodies • European Union Policies on Air, Chemicals, Civil Protection and

Environmental Accidents, Climate Change, Health, Industry, Land Use, Nature and Biodiversity, Noise, Soil, Sustainable Development, Waste and Water.

National and Sub-National Regulations and Policies

• National Park Acts Forestry Laws and R• egulations

• Transportation and road related laws

rograms

(especially for pulp and paper) structure and

• ams

cies

• Health and Safety laws • Employment insurance p• Environmental laws • Waste disposal laws • Capital investment programs (for example infra

technology grants and loans) National climate change progr

• Air and water emission regulations (especially for pulp and paper) • Reforestation programs • Annual allowable cut poli

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• Fisheries related laws (especially for stream protection)

Sust aabitat Directive

rategy

rocurement policy ce (FLEG) Programme

Certi ahip Council (FSC)

Forest Certification Schemes

• Standards Association

• National biodiversity conservation laws and regulations

ain bility Initiatives • European Union H• European Union Bird Directive • European Union Biodiversity St• Natura 2000 network of protected sites• WWF Forests program • IUCN Forests program • UK sustainable timber p• UK Forest Law Enforcement and Governan

fic tion Schemes • Forest Stewards• Programme for Endorsement of

(PEFC) • American Tree Farm Systems

Canadian• Sustainable Forestry Initiative

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper.

5 Supply chain analysis 5.1.1 Figure 5 below provides an overview of the supply chain for coniferous

lumber. As the figure illustrates, lumber is only one of many products that are produced from coniferous trees. Lumber and veneer are the highest value components of a tree and as such, they are usually targeted first. Once the best lumber or veneer has been removed, the remainder of the tree—chips, sawdust, bark, and other waste wood—become inputs for pulp, particle board, wood pellets, fire wood etc. Ultimately, a single tree may become part of many different final products.

Coniferous Lumber Supply Chain – Global Overview

Pre-harvesting

Harvesting

Consumption

Manufacturing

Milling

Furniture and other finishedwood products

Door stock,

window stock, mouldings etc.

Construction

Harvesting of coniferous trees

Lumber –Construction

Grade

Household and commercial uses

Afforestation/Reforestation

Medium Density Fibre Board, Cement Board, Oriented Strand

Board etc.

Coniferous Pulp Mixes

Lumber -RoughResidual wood reclaim

Wood Pellets

Paper products

Household, commercial, industrial paper products

Household, industrial energy production

Peeled veneers

Plywood engineered beams

Grading and harvest planning

Coniferous Lumber Supply Chain – Global Overview

Pre-harvesting

Harvesting

Consumption

Manufacturing

Milling

Furniture and other finishedwood products

Door stock,

window stock, mouldings etc.

Construction

Harvesting of coniferous trees

Lumber –Construction

Grade

Household and commercial uses

Afforestation/Reforestation

Medium Density Fibre Board, Cement Board, Oriented Strand

Board etc.

Coniferous Pulp Mixes

Lumber -RoughResidual wood reclaim

Wood Pellets

Paper products

Household, commercial, industrial paper products

Household, industrial energy production

Peeled veneers

Plywood engineered beams

Grading and harvest planning

Figure 5: Overview of supply chain for softwood lumber

5.2 Production Stages 5.2.1 The stages of production of lumber include pre-harvest forest management,

harvest, transportation, milling, secondary manufacturing, trading and transportation.

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Acquisition of timber licence

5.2.2 Due to the high fixed and variable costs of large scale manufacturing of forest products and the integrated nature of the supply chain, it is important for companies to ensure that they have a secure and uninterrupted supply of raw logs over a period of several decades. This is usually achieved by acquiring the long term rights to harvest trees on public or private land through the purchase of timber licences. Most often, these licences define the area within which the company has the right to cut trees. The annual allowable cut is then determined by a government agency such as a Ministry of Forests that sets conditions regarding the species, size, quantity and quality that the company is able to harvest. They also specify (or additional regulations or management plans will specify) further provisions such as stumpage rates (the royalties that must be paid to the government for each tree cut), allowable harvesting techniques, reforestation requirements, remediation measures for roads, provision of buffers along streams, wind blocks, visual buffers, employment of local people, and other conditions to ensure that the integrity of the forest is maintained and that social and economic benefits are provided to local communities.

Pre-harvesting

5.2.3 Forestry occurs within three main types of forests:

• Primary forests are mature natural forests with a high degree of species diversity that are usually being cut for the first time. This category includes old growth forests which may be many centuries old.

• Semi-natural forests are natural forests that have been cut selectively or in a way that encouraged the regeneration of natural diversity of both species and age. This can include replanting mixed species after harvesting, or leaving a mix of trees to encourage natural regeneration.

• Plantation forests are the outcome of active human intervention through planting and silviculture treatments intended to produce high volumes of desirable tree species in as short a time as possible. They tend to exhibit little diversity of either age or species.

5.2.4 Forests change over time as trees grow and ecological conditions change. Consequently, different activities are undertaken within managed forests to encourage the relative density and rate of growth of desirable tree species. These techniques, known as silviculture, include preparing the site to benefit the growth of desirable species, planting a higher proportion of certain species, using herbicides to reduce competition with other flora, and undertaking spacing, thinning, pruning and fertilising to promote rapid and healthy tree growth. Silviculture activities can have a large impact on

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growth and future yields. For example, a stand managed with all of the above treatments may produce as much as four times the yields of the region wide average of such stands without treatmentxii.

5.2.5 Given the diverse geographic and ecological conditions that can exist within large forests it is necessary for forest companies to conduct surveys to determine the quality and quantity of marketable tree species within their timber licence areas before they begin harvesting. Companies use the results of these surveys in combination with market price projections, the conditions of their allowable cut, and the final products that they will produce, to develop harvesting plans that maximise profits by targeting specific species in particular areas.

5.2.6 The end use of the trees will usually determine the extent to which pre-harvesting activities occur. In forests where trees will undergo secondary milling for high value products such as door and window stock, pre-harvesting activities may be intensive and can include measuring the diameter and height of trees to allow for the selective harvest of only the finest trees. In other instances where construction grade lumber or pulp wood is the end product, pre-harvest surveys may be limited to minimise costs and the preferred harvest method may be to cut large blocks of trees (clear cutting).

5.2.7 Since forest companies demonstrate a high level of integration along the supply chain, harvesting decisions are closely related to the technological options available for extraction, transportation and milling. For example, heavy machinery is optimised for the terrain it operates on, the size of the trees it harvests and the distance from the cutting site to the loading area. Lumber mills may be optimised to produce very low cost dimensional lumber for the building industry, or higher value lumber for use in secondary milling applications such as door and window stock. Typically the costs of changing technology are extremely high.

Harvesting

5.2.8 There are three main dimensions to harvesting: 1) the species of trees that are removed, 2) the number of trees in a stand that are removed, and 3) whether the trees are cut to length on site or at the mill.

5.2.9 Depending on the objectives of the harvest plan, trees are either cut selectively or en mass. Selective logging may involve, for instance, targeting certain species such as cedar or fir for use in particular high value applications such as ornamental mouldings, doors and windows, large exposed structural beams etc. Selective logging in some instances involves choosing high value trees from within a remote forest, cutting them with a chain saw and removing them with a helicopter. Less selective logging on the other hand may target multiple species or different sizes that will be transported out of the forest and later sorted and graded for use in a variety of different products.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 5.2.10 Where clear cutting is the preferred method of harvesting, the harvesting

plan will specify the shape and size of the block of trees that will be removed from the larger stand. Given the potential environmental impacts of large scale clear cutting, regulations usually dictate the size of the blocks and the number of residual trees that should be left standing. The regulations may also include provisions for buffer zones along rivers and streams, or around threatened ecosystems. Harvesting of steep slopes may be prohibited since it can precipitate soil erosion and landslides.

5.2.11 In addition to deciding on the target species and number of trees that will be removed, harvest plans also provide direction on whether the trees will be cut to length on site or at the mill. The possibilities include shortwood, tree-length and full-tree.

5.2.12 Shortwood (also known as cut-to-length): Trees are felled, delimbed (branches removed), and bucked (cut) to individual product lengths directly in the stump area and then transported to the landing or roadside. Primary transportation is usually by a forwarder (carries logs off the ground), although cable skidders (drags the logs on the ground) are sometimes used. This harvesting method works best with smaller trees intended for use in pulpwood operations. Premium sawlogs are usually cut and moved to market in longer lengths (10-12 metres). Longer lengths give the mill more flexibility in to produce different combinations of common lengths of construction grade lumber (8, 10 and 12 foot lengths) depending on the inventory requirements of the sawmill.

5.2.13 Tree-length: Trees are felled, delimbed, and topped directly in the stump area and then transported to the landing. Transportation from the stump to the landing is usually by a skidder (cable or grapple). At the landing, the tree length sections are processed into individual products or hauled as is to a central processing yard or mill. Since bucking errors can be very costly for high value wood, the decisions are often delayed as long as possible along the processing chain.

5.2.14 Full-tree: Trees are felled and transported to the landing with the branches and top still intact. Transport to the landing is usually by a skidder (cable or grapple). At the landing, the full trees are processed into shorter lengths or hauled as full trees to a central processing yard or mill.

5.2.15 To facilitate access to the harvest areas and to allow cut logs to be transported from the forest to the mill requires the construction of road networks. Road construction usually involves the creation and maintenance of permanent all season main roads across a large area in addition to smaller access roads to individual cut blocks. Logging roads are usually constructed using a coarse gravel base.

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Transportation

5.2.16 Transportation in the initial stages of production involves moving logs from the forest to a landing area, then to a grading and sorting area, and finally to a mill or processing plant. Depending on the terrain and location of facilities, logs are transported overland by truck or over water by tug boat and log raft.

Milling

5.2.17 Given the high degree of competition in international lumber markets, most of the product entering into international trade is produced by large forestry companies. These companies use high volume, capital intensive mills that employ advanced technological processes optimised to produce specific wood products at the lowest price possible.

5.2.18 Lumber mills consist of a series of conveyor systems, sawing equipment, planning equipment, drying and treating facilities. Logs are sorted and graded prior to milling. Some high value logs, such as those suitable for veneers, are separated and sent to secondary processors. Cull logs are removed for pulp and firewood. The remaining logs are cut into timber (large squared wood for use as beams etc.), cants (logs with one or more square sides) and lumber (smaller squared wood). Lumber is graded and separated, then stacked and kiln-dried. In some cases it is dipped or pressure treated with antifungal preservatives before being bound and packaged for market.

5.2.19 Since lumber mills are usually owned by the same company that controls access to the fibre supply through timber licences, harvesting and milling decisions are interdependent. Mills tend to be optimised to produce specific products such as dimensional construction lumber, veneer, or higher value products such as mouldings, door stock etc. The costs of constructing or retrofitting a mill are enormous – in the hundreds of millions of dollars. As such, the choice of technology a mill locks into is a critical decision that will affect its competitiveness for many years. In general, modern mills are able to produce wood products at a lower variable cost than older mills. However, the fixed capital costs of upgrading a mill or changing the product for which it is optimised are so high that large changes occur infrequently.

5.2.20 In order to keep costs as low as possible, great attention is paid to controlling inventory to avoid downtime. This involves monitoring market conditions to anticipate changes in demand, for instance brought about by changes to housing starts. It also involves managing inventories on a seasonal basis. Mills try to reduce inventory in the spring because logs can spoil in the summer. Sapwood can be stained by bacteria, and fungi and wood boring insects can degrade logs. In the fall, mills will increase log inventory to prepare for poor logging conditions associated with heavy rain or snow. This depletes timber inventory.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 5.2.21 Forest companies are constantly looking for new ways of cutting costs and

adding value to their products. Milling decisions begin with a focus on taking the choicest parts of the tree and using them to produce the highest value products, for instance veneers, exposed beams etc. The residual material is then used to create the next highest value product, perhaps dimensional lumber, with the residual from that used to produce other products. Finally, the remaining wood chips and saw dust become inputs into the production of engineered products such as particle board, oriented strand board etc. This process not only generates valuable products from waste materials, it also avoids the costs of disposing of large volumes of wood waste. Due to the specialised nature of mill operations, secondary products such as these are usually produced at a different mill.

Transportation

5.2.22 Transportation in the later stages of production involves moving finished goods to market or by-products such as wood chips to secondary manufacturing facilities. Large volumes of materials necessitate low cost methods of transportation of such as tug boats with barges, freighters, railcars and trucks.

Trading

5.2.23 Due to high transportation costs, simple wood products become increasingly uncompetitive with local substitutes the farther they have to travel. This is one of the main reasons that the UK sources most of its wood from European countries, while the US sources most of its wood from Canada. Since there is a high degree of substitutability for dimensional lumber produced from common tree species, the international market is highly competitive and very well informed of supply and demand conditions.

5.3 Supply chain analysis 5.3.1 Pulp and paper mills can be classified into the following categoriesxiii.

• Integrated Mills - These mills produce their own pulp and use it to produce paper products within their own facilities.

• Non-integrated Mills- These mills manufacture paper products but do not produce their own pulp. They rely on imported or domestically produced pulp.

• Market Pulp Mills - These mills produce and sell pulp to other facilities (non-integrated mills) where paper is made.

• Converting Facilities - These facilities use paper and paperboard produced by other mills to manufacture finished products like envelopes and stationary, corrugated paperboard boxes, napkins, tissues, paper towels and other speciality goods.

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• De-inking Pulp Mills - these plants remove ink and other impurities from recycled paper and produce pulp that is blended with virgin pulp to form paper.

Primary pulp manufacturing processes

5.3.2 Figure 6 provides an overview of the pulp manufacturing stages including inputs and environmental impacts. The main stages in pulp and paper manufacturing consist of the preparation of the raw materials (debarking and chip making), producing raw pulp, bleaching the pulp, and manufacturing paper.

5.3.3 The first stage of pulping involves breaking down the wood. Wood consists of approximately 50% cellulose and 30% lignin, a chemical that bonds the fibres togetherxiv. The pulping process frees the wood fibres from the lignin so that they can be used to manufacture paper products. The wood fibres can be separated from the lignin by chemical or mechanical methods. The following section describes the primary processes used to produce paper grade pulp.

Manufacturing- Pulp

Water

Chemical and Mechanical Pulp manufacturing

Chemical paper grade pulp

Emissions to air

Softwood chips

Chemicals

Energy

Labour

Hardwood chips

Financing

Equipment

Emissions to waterHigh yield an

paperd Mechanical

grade pulp

Inputs Outputs ImpactsInputs Outputs Impacts

Solid waste

Recycled paper pulp

Figure 6: Pulp production overview diagram

Chemical Pulping – Sulphate Process (Kraft)

5.3.4 The most widely used pulping method is the sulphate or Kraft chemical method. The Kraft process involves cooking the wood chips under pressure in a digester with sodium hydroxide and sodium sulphide to remove the

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lignin and separate the cellulose fibres from each other. It produces a high quality pulp that has long fibres which provide strength to the resulting paper productsxv. Most Kraft mills recover and reuse 95-98 percent of the chemicals used in the processxvi. The Kraft process has a low yield however, only about 43% of the original wood is turned into pulpxvii.

Chemical Pulping – Sulphite Process

5.3.5 The sulphite process is similar to the sulphate process but cooks the wood chips in sulphite based liquor which is produced by mixing sulphuric acid or hydrogen sulphite with a metal base of calcium, magnesium or sodiumxviii. The pulp that results from the sulphite process is also strong and of a lighter colour than sulphate pulp. The sulphite yield is low and compares to the Kraft process. The recovery and reuse of chemicals is lower than the Kraft processxix.

Mechanical Pulping

5.3.6 Mechanical (or “groundwood”) pulping involves pressing wood chips or debarked logs against a grinder to physically separate the fibres. This process breaks many of the fibres into smaller pieces and leaves much of the lignin attached. This result in a lower quality pulp that is weak and discolours easily when exposed to lightxx. The process is energy intensive but results in a high yield—about 95% of the original volume of wood is turned into pulpxxi.

Thermomechanical (TMP) and Chemo-Thermomechanical Pulping (CTMP)

5.3.7 Thermomechanical (TMP) and Chemo-Thermomechanical Pulping (CTMP) are two variations of the mechanical process that produce stronger pulp and use less energy. TMP pulp steams the wood chips prior to grinding while CTMP saturates the wood chips with sulphur based chemicals prior to softening them with steam. The addition of the chemicals removes some of the lignin and produces superior pulp to strictly mechanical processes.

Washing

5.3.8 After the wood is turned into pulp by chemical or mechanical processes, the pulp is washed to remove dissolved lignin and chemicals. The pulp is passed through a series of washers and screens at a high temperature.

Bleaching

5.3.9 Chemical pulping turns the wood pulp brown in colour. This is acceptable for paper bags and packing materials, but is less desirable for use in printing and other applications where white paper is preferred. To achieve a bright white colour, the pulp must be bleached to remove colour associated with remaining lignin. There are three general methods of bleaching:

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• Elemental Chlorine bleaching uses chlorine and hypochlorite to brighten pulp.

• Elemental Chlorine Free (ECF) bleaching uses chlorine dioxide, oxygen and hydrogen peroxide.

• Totally Chlorine Free (TCF) bleaching brightens pulp with oxygen and hydrogen peroxide.

5.4 Paper manufacturing 5.4.1 Paper is made when a dilute suspension of pulp and other fillers are

deposited in layers on a very fine moving screen. The mixture is pressed and dried through a series of heated hollow rollers. Chemical additives and pigments may be included to impart specific properties and to add colourxxii.

5.4.2 The combination of available pulps and complex secondary production processes allow for the creation of a vast array of paper products from newsprint and stationary, to packaging material, tissues, labels, heat sensitive and pressure sensitive papers, glossy photo papers and so on. The diversity of paper products has an equally diverse set of production processes and potential environmental impacts. As such, analysis in this paper is constrained to three main categories of paper products: newsprint, printing and writing, packaging and industrial uses, and household and sanitary uses.

Newsprint

5.4.3 Newsprint is relatively inexpensive compared to other papers. It has high recycled fibre content, and little or no additives, and low tear strength. Newsprint does not need to be very bright and as such, requires little bleaching.

Printing and writing

5.4.4 This category encompasses a wide variety of papers from stationary and copier paper to magazine paper. Desirable characteristics include strength, opacity, brightness, reduced ink blotting and in some cases water repellent properties. These characteristics are produced by adding compounds and by treating the finished product. Opacity is usually achieved by adding China clay, although chalk and titanium oxide are also used. Water repellence and reduced ink blotting can be increased by adding starch, rosin and alum, gelatine, latex or synthetic agents to coat the cellulose fibrexxiii. Antistatic properties can be achieved by adding saltxxiv.

Packaging and industrial paper

5.4.5 Packaging materials and industrial papers encompass a broad range of products. They include unbleached Kraft pulp based papers such as brown paper bags and brown paperboard, but also more complex bleached and

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coated paper products. Common plastic coatings include Polyvinyl Chloride (PVC) and Polyvinylidene Chloride (PVDC)xxv.

Household and sanitary paper

5.4.6 usehold and sanitary tissue papers are

5.5 Impacts of pulp and paper manufacturing

Environmental impacts

5.5.1 al impacts associated with the production of pulp

5.5.2 ry lifecycle impact assessment paper and

Figure 7: Overview of emission in pulp and paper production and use

Desirable characteristics for hoabsorbency and wet strength. Achieving these properties usually requires bleaching the pulp to remove resins that inhibit absorbency and using synthetic additives to increase wet strengthxxvi.

The primary environmentand paper products relate to the forest management practices that generate the raw material (such as soil erosion, biodiversity loss, changes in carbon stocks as described under the coniferous lumber impacts section), energy use and emissions to air, water and soil as described earlier in the paper. This section provides a summary of the environmental impacts associated with producing pulp and making common paper products. The most significant environmental impacts of pulp and paper making related to the pulping and bleaching processesxxvii.

Figure 7 was taken from an industprovides a useful overview of the main stages of production and usexxviii.

Source: LCA Graphic Paper and Print Products (Part 2)xxix

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Figure 8: Contaminants by processing stage

Pulping Bleaching PapermakingSodium Hydroxide Residues Hydrogen Peroxide Waste sludgeSulfuric/Sulfurous Acid Elemental Chlorine Bleaching and pulping cHydrochloric Acid Chlorinated Compounds SVOCs (in coatings)Hydrogen Sulfide Sodium Hydrosulfite VOCs (in coatings)Ammonia Polychlorinated Biphenyls (PCBs) SlimicidesLead Dioxins and Furans Chlorinated phenolsCyanide Some aminos, and quaterZinc compoundsChromium Some organosulfur compResin Some silver compoundsUnnatural Fatty Acids and Chlorinated Analogs Titanium residues

ontaminants

nary ammonium

ounds

Oil and grease discharges collected in sedimentsPolychlorinated biphenyls

Source: US Environmental Protection Agencyxxx

Contaminants by waste stream

Liquid effluent

5.5.3 Specific effluent composition and its consequent environmental impact depend both on the method of production and the level of waste water treatment. Wastewater discharge varies from 20-250 cubic metres per metric ton (m Vt) of air dried pulp (ADP) depending on the process usedxxxi. The primary liquid effluent concerns centre around the pulping and bleaching processes. Liquid effluent discharges of concern are outlined below.

Organic pollution and suspended solidsxxxii

5.5.4 Organic pollutants are measured by Biological Oxygen Demand (BOD) and Chemical Oxygen Demand (COD) which measure the negative impact that these organic materials impose by removing oxygen from natural ecosystems as they degrade. Common organic pollutants in liquid effluent from pulp mills include cellulose fibre, carbohydrate, starch and hemi-cellulosexxxiii. Liquid effluents are high in BOD at 10-40kg per tonne of air dried pulpxxxiv, and high in COD at 20-200kg per tonne of air dried pulpxxxv,xxxvi. Effluent also contains high levels of suspended solids (10-50kg per tonne ADPxxxvii) which can increase water opacity; cover the tops of rivers and lakes. Further the suspended solids can absorb resin, fatty acids, and heavy metals which persist and bio-accumulate in the environmentxxxviii.

Acidic Compounds

5.5.5 Liquid effluents can contain abietic and dehydroabietic acids from the natural resins found in softwoods. They are more concentrated in mechanical and chemo and thermomechanical pulp effluents where they can be found in concentrations of 96-98mg/litrexxxix.

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Chlorinated organic compounds

5.5.6 The presence of these compounds depends on the pulping and bleaching process used. These compounds can include dioxins, furans and other adsorbable organic halides which can be found in concentrations of up to 4 kg per tonne as measured by AOXxl. The introduction of elemental chlorine free bleaching resulted in a significant decrease in AOX emissions. Older mills that use elemental chlorine bleaching produce between 5-10kg AOX per tonne of pulp, while newer mills using alternative bleaching may emit less than 0.2kg AOX per tonnexli. Concerns have been raised about the reliability of the AOX measure to predict toxicity.

5.5.7 Chlorophenolics result from chlorine pulp bleaching (both elemental and chlorine dioxide based processes) and can be found in concentrations of up to 70g per tonne in softwood effluentsxlii. They are toxic, persistent and bio-accumulative and can transform into other toxic substances. As a group these compounds are among the most hazardous chemicals in pulp and paper mill effluent due to the concentrations at which they can occurxliii.

5.5.8 Dioxins are highly toxic, persistent, bio-accumulative and present significant health risks to humans, fish and other animals. The exact effects and maximum safe exposure levels are the subject of considerable debate. Furans are also toxic but to a lesser degree than dioxins. Dioxins and furans can be found in the pulp itself as well as in liquid effluent, raising concerns about the levels at which they may occur in finished paper products in addition to wastewater treatment sludge that is land filled or incineratedxliv.

5.5.9 Chloroform is a non-persistent, non-bioaccumulative toxin that is a suspected carcinogen. Chloroform results from the bleaching process and can be found in pulp and paper mill effluent. There are concerns about human exposure to chloroform through drinking water and air.

Air emissions

5.5.10 Emissions to air are highly dependent on the method of production and pollution abatement technologies employed. However, compared to other industries the level of emissions from pulp and paper manufacturing is considerably higher, although these emissions are considered to be less of a concern than those in liquid effluentxlv.

5.5.11 Mills that employ the Kraft or sulphate method of pulping (the majority of mills), produce highly malodorous emissions of reduced sulphur compounds including hydrogen sulphide, methyl mercaptan, dimethyl sulphide, and dimethyl disulfide at a rate of between 0.3 and 3kg per tonne of pulpxlvi. Other potential emissions include carbon monoxide, particulate matter (75-150kg/toinne), sulphur oxide (0.5-30 kg/tonne), nitrogen oxides (1-3kg/tonne), and volatile organic compounds (15kg/tonne) from black liquor oxidationxlvii. Sulphite process mills emit sulphur oxides at rates ranging

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from 15-30+kg/tonnexlviii. Mechanical and thermomechanical pulping processes generate significantly lower quantities of air emissionsxlix.

Carbon dioxide

5.5.12 There has been some debate whether the sequestration by forests offset the emissions of greenhouse gases from the production, transportation and disposal of pulp and paper products. A recent study by the International Institute for Environment and Development (IIED) commissioned by the World Business Council on Sustainable Development concluded that the full paper cycle is a contributor of greenhouse gases, emitting around 450 million CO2 equivalents per yearl,li.

Energy use

5.5.13 A significant amount of energy is consumed in the production of pulp and paper—between 2000-6500 kWh per tonne of dried pulplii. Chemical pulping is more energy intensive (6350kWh/h tonne Kraft, 5400 kWh per tonne sulphite), although much of the energy is produced by burning waste by-products to produce steamliii. Mechanical pulping consumes about 2000 kWh per tonne of pulp. Elemental Chlorine Free (ECF) bleaching requires 4.0 kWh/kg and Totally Chlorine Free (TCF) bleaching requires between 1.0-2.0 kWh/kgliv.

Worldwide environmental performance

5.5.14 Environmental performance in the pulp and paper industry exhibits considerable variation across different regions. Asia tends to have the highest average emission and effluent levels, while North America and Europe have the lowest. China and India have particularly high effluent loads that are associated with non-wood based pulp production. There are considerable differences between mills within regions with some performing better than average and others significantly worselv.

Social and economic impacts

5.5.15 The most significant social and economic impacts relate to 1) displacement of local people from their lands, 2) closing of mills and the subsequent loss of livelihoods for rural populations, and 3) health related impacts from air and water pollution resulting from pulp and paper manufacturing. There are a wide variety of toxic chemicals and other pollutants released in the effluent and emissions of pulp and paper plants that are of significant concern to human health. In addition to directly endangering local populations, they are persistent and bio-accumulate in fish and shellfish and as such present a secondary exposure risk through consumption.

5.5.16 Lesser impacts are light and noise pollution associated with the 24 hour operations of pulp and paper mills.

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Mitigation/options for improvement

5.5.17 The pulp and paper manufacturing industry is complex. There are a wide variety of production methods each with associated environmental impacts. As such, specific mitigation measures are beyond the scope of this paper. In general, elemental chlorine free (ECF) and totally chlorine free (TCF) bleaching processes produce far less toxic waste than elemental chlorine bleaching and as such are preferable. The bleaching process itself is a significant contributor to overall environmental impacts and as such, the use of unbleached paper products is preferable, especially in packaging. Modern pollution abatement techniques are necessary and need to be adhered to in order to reduce impacts. Modern technologies can also reduce energy use and increase recycling of production materials within the operations. Reducing paper use and increasing paper recycling are very important measures to reduce the overall impacts of pulp and paper production.

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6 Impact Assessment.

Pre-harvest

Pre-harvesting Afforestation or Reforestation

Inputs Impacts

Biodiversity Impacts (+/-)

Soil Erosion (+/-)

Chemical Inputs (Fertilizers, Herbicides and Pesticides)

Establishment of commercial forest

Water pollution (Chemical)

Financing

Labour

Energy

Carbon Sequestration Impacts (+/-)

Machinery

Tree seedlings

Recreationopportunities

(+/-)

Social / Economic Impacts (+/-)

Pre-harvesting Afforestation or Reforestation

Inputs Impacts

Biodiversity Impacts (+/-)

Soil Erosion (+/-)

Chemical Inputs (Fertilizers, Herbicides and Pesticides)

Establishment of commercial forest

Water pollution (Chemical)

Financing

Labour

Energy

Carbon Sequestration Impacts (+/-)

Machinery

Tree seedlings

Recreationopportunities

(+/-)

Social / Economic Impacts (+/-)

Figure 9: Overview of impacts related to pre-harvest activities

6.1.1 Pre-harvest activities can result in a range of potential environmental, social and economic impacts. Figure 9 provides an overview of the primary inputs and impacts associated with pre-harvest activities.

Environmental impacts

6.1.2 Environmental impacts related to pre-harvesting activities can include the following: air pollution and damage from use of fire; changes in soil stability; water pollution from chemical herbicides, pesticides and fertilisers; and changes in carbon stocks. The magnitude of impacts needs to be considered from the context of changes in the landscape conditions. For example, reforesting a previously deforested area into a commercial forest will reduce soil erosion, sequester carbon and provide wildlife habitat. However, if the original forest had been in an old growth state prior to being cut, then the reforested land will provide diminished ecosystem services and will exhibit less biological diversity then the reforested land, particularly if reforestation activities are intended to promote the emergence of specific high commercial value trees.

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Fire

6.1.3 During the establishment of a commercial forest, prescribed fire may be used to promote conditions favourable to the growth of target species. Prescribed burning describes the purposeful burning of forest fuels on a specific land area under selected weather conditions to accomplish predetermined, well-defined management objectiveslvi. Most often the management objectives are removing deadwood that could fuel future forest fires, stimulating the natural regeneration of certain coniferous species that require fire to promote seed germination, and reducing hardwood species that compete with the coniferous trees and impede their rate of growth.

6.1.4 Fire is an important part of natural ecosystems processes that is neither innately destructive nor constructive: it simply causes changelvii, lviii. Whether these changes are viewed as desirable or not depends upon their compatibility with the objectives of forest management. Many large parks allow naturally started fires to burn as part of normal ecological process. The use of prescribed fire is generally accepted as a forest management tool that allows reduction of fuel loads and competitive species without the environmental impacts of chemical herbicides or mechanical removal methodslix. Nonetheless, the use of fire to establish commercial forest produces air pollution and releases CO2. This can contribute to respiratory problems for nearby populations, and if improperly controlled can cause excessive forest damage, biodiversity loss, and loss of life and property.

Herbicides and Fertiliser

6.1.5 Establishing a commercial forest also involves manipulating natural processes to promoting the growth desirable species. The most direct way in which this occurs is by planting saplings of the desired species and promoting their growth by applying fertilisers while simultaneously impeding the growth of competing species by applying herbicideslx. Application of fertilisers and herbicides can pose risks to wildlife depending on dosage and exposure. A second potential risk is damage to populations of endangered plants. Herbicides are typically applied early in the process to reduce competition for desirable species when they are young. Fertilisation usually takes place in intervals of between 4-15 years depending on the tree species and the intensity of management. Fertilisers are usually nitrogen, potassium and phosphorus. Chemical runoff associated with fertiliser and herbicide application can also contribute to surface and ground water contamination. Usually, fertilisers and herbicides are applied by aerial spraying which increases the likelihood of contamination of surface water and also increases exposure related health risks to nearby communities as a result of conveyance of chemicals by wind. There are also emissions (including CO2) attributable to fertiliser production and airplane operation.

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Soil Erosion

6.1.6 Pre-harvesting activities can contribute to or reduce soil erosion. Use of heavy machinery to create road networks, thin tree stands, and reduce fuel loads and undesirable species results in soil erosion and soil compaction. On the other hand, reforestation generally has the effect of mitigating soil erosion by reducing the impact speed of rain since as it is filtered through leaves and branches. As well it binds the soil within the root structure, and slows the speed with which water travels across the forest floor thereby reducing the amount of sediment it can carry. The positive effects of reforestation are likely to far outweigh the negative effects of erosion from heavy machinery use except under unusual circumstances.

6.1.7 Research has shown that soil erosion by sediment detachment decreases within a decade following reforestation, however, recently reforested sites have soils with significantly less organic matter and have higher runoff rates than forests more than 50 years oldlxi. Low infiltration rates persist for many years suggesting that where the upper soil horizons and the biological health of the soil have been lost, restoration of the hydrologic function of a landscape by reforestation may require centurieslxii.

CO2 impacts

6.1.8 Within a forest ecosystem complex processes result in both CO2 emissions and sequestration. CO2 is produced by roots and the micro-organisms responsible for decomposition in soils. The ability of roots and micro-organisms to produce CO2 can vary with time of year and is dependent on temperature and moisture conditionslxiii. CO2 sequestration occurs through photosynthesis in the leaves of the tree canopy. On the whole, a landscape tends to sequester significantly more CO2 in a forested state. Reforested areas are a net sink for CO2 compared to alternative land uses including agriculture, fallowed land, or deforested conditions. Numerous studies have suggested that sequestration rates are significantly higher in young forests than in old growth forests. The rationale has been that younger trees grow more quickly and have consequently higher levels of photosynthetic activity. This research suggested that old growth forests were likely to be in carbon equilibrium due to slower tree growth and an accumulation of degrading biomass on the forest floor. However, recent research has contradicted these conclusions and suggests that old growth forests are net carbon sinks and compare to younger forests under most climatic conditions lxiv.

Forest complexity

6.1.9 Old growth forests tend to exhibit the highest degree of biodiversity, the greatest selection of tree species and also the largest trees. Managed forests that were cut in the past and reforested are usually more homogeneous with smaller trees. Plantations exhibit the least amount of diversity. For example, in Canada where 53 percent of the forests are

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primary or old growth, the three most common tree species account for only 32% of the total growing stock. However, in Sweden where only 17% of the forests remain in a primary state, the three most common species account for 92% of the total growing stock. This reflects the fact that managed forests replanting usually favours the species that have the highest market value.

6.1.10 Globally, most of the remaining old growth forests occur in Canada, USA and the Russian Federation. The UK’s top import partners (Sweden, Finland, Latvia and Estonia) derive most of their coniferous lumber products from reforested land.

Biodiversity

6.1.11 The net change in biological diversity associated with pre-harvest activities such as afforestation or reforestation needs to be considered relative to previous land cover conditions. For example, afforestation on a landscape that was previously used for agriculture or was in a recently deforested state could result in a net increase in biological diversity as the forest matures. However, it is likely to exhibit significantly less biological diversity than the same area in an old growth or primary forest state. In general, establishing a commercial forest involves a range of silviculture activities intended to promote the rapid and healthy growth of specific commercially valuable trees species, and discourage the growth of non-desirable species. This results in a more homogeneous forest with fewer species that are close to the same age. These conditions will provide favourable habitat for some plants and animals while not supporting others. Given the enormous scales at which forest landscapes are manipulated, the cycle of deforestation and reforestation has the potential to significantly alter the biological diversity. Many species of plants, animals and insects have evolved to fill niches that are present in old growth forests but absent in younger forests. As such, landscape level changes associated with forestry operations result in significant net changes in biological diversity and can endanger species that are not well suited to the new conditions.

Social impacts

6.1.12 Social impacts related to pre-harvest activities include land rights, employment, access to the forest for traditional activities, and the consequences of environmental degradation.

6.1.13 Impacts related to land rights are usually country and location specific but generally involve the displacement of local people in advance of logging activities. In many cases this involves forest companies or private landowners forcing indigenous or aboriginal people away from lands that they have historically occupied but of which they do not have formal ownership. In most cases this type of displacement occurs in virgin or primary forests. Displacement of indigenous people can have profound negative impacts on their wellbeing since their traditional activities, sources

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of food, livelihoods, culture and spirituality are closely related to the primary forest. When these forests are cut down indigenous people must relocate, either to other remaining primary forests or to urban areas. This can be a source of conflict with other groups and can lead to a breakdown of traditional social structures within the indigenous population. Their relative poverty when removed from the forests that have sustained them makes them an especially vulnerable population.

6.1.14 Many forested areas in Canada, particularly within British Columbia are subject to unresolved land claims by aboriginal tribes. Pre-harvest and harvest related forestry activities in ‘traditional land areas’ have led to social conflict, road blockades, violence, vandalism of heavy machinery and other problems. In addition to the problems for native populations, this also creates considerable economic uncertainty for forestry companies and imposes additional operational costs and delays. Aboriginal groups and environmental organisations have been quite successful in mounting post harvest boycotts of wood that originated in old growth forests or areas of unresolved land claims, imposing further costs on forestry companies—even those unrelated to the conflict. These boycotts have been particularly effective in European markets for Canadian wood and have led to positive changes in forestry practices within Canada.

6.1.15 Even in areas where aboriginal title to land has been extinguished for several generations, logging in traditional land use areas can lead to conflict since native groups often enjoy special privileges to hunt, trap, collect non-wood products and practice their spirituality within wide areas of forested lands that they do not own.

6.1.16 Progressive forest companies have begun to establish partnerships with aboriginal communities that promote local employment, and avoid logging in ecologically sensitive areas or areas of historic (archaeological sites) or spiritual importance. These partnerships have the potential to improve forest management practices by combining western scientific knowledge with traditional ecological knowledge, promoting employment for local people while reducing uncertainty and economic losses for forest companies.

Recreation

6.1.17 Pre-harvest activities have the possibility of increasing recreational activities by providing access through road networks to remote areas. However, recreational activities on the other hand may also be negatively impacted by the construction of roads, loss of special places etc.

Employment

6.1.18 Pre-harvest activities support a small economy based on tree planting, thinning, fertilising, inventorying, and harvest planning. This economy is considerably enlarged if the additional employment related to forestry

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research, government policy making and regulation are included. Collectively these activities form an important source of livelihood for many people.

Mitigation/Improvement options

6.1.19 Reducing pre-harvest related environmental impacts can be effectively achieved through science based forest management practices that seek to understand desirable ecosystem dynamics and then develop strategies to maintain them. These management practices are especially important in primary and semi-natural forests, and include replanting with a diverse mix of species that replicates previous natural forest characteristics in the same area, cautious use of fertilisers and herbicides especially near surface water and communities. Exotic tree species should be avoided in natural environments and where they will consume excessive amounts of water. Positive social benefits can be achieved (or serious negative effects mitigated) through meaningful consultation with indigenous groups and other stakeholders. This can allow for the development of selective logging plans within traditional areas that avoid historic and sacred sights. Providing sustainable economic benefits for local indigenous people is an important objective.

Harvest

6.1.20 Harvest activities can result in a range of potential environmental, social and economic impacts. Figure 10 provides an overview of the primary inputs and impacts associated with harvest activities.

Environmental impacts

6.1.21 Environmental impacts resulting from industrial harvesting activities can be substantial. The specific impacts and the extent to which they negatively impact ecosystem services depend on local forest characteristics and the method of extraction. It is important to note that natural forests undergo drastic state changes as a result of natural processes such as forest fires, pest infestations and other factors. These events can affect huge areas–-tens of thousands of hectares in size. The resilience of forests and their associated biodiversity to such events depends on many factors include the composition of species present, the topography of the area, climatic conditions, and other stressors. Similarly, forests will exhibit differences in their resilience to harvesting techniques such as clear cutting. As such, the magnitude of environmental impacts associated with harvesting needs to be considered within the context of local landscape conditions and the degree to which local ecosystem services are disrupted and biodiversity effectedlxv. Nonetheless, there are some general observations about the environmental impacts of harvesting activities that are common to most situations.

6.1.22 In broad terms, harvest related impacts can include loss of wildlife habitat, changes in soil stability, soil erosion and compaction, sedimentation of

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surface water, damage to fish spawning rivers, air pollution, and changes in carbon stocks. The magnitude of the impacts are directly related to the size of the cut block, the amount of residual trees left standing, and the intensity of mechanisation in the extraction process. The most significant environmental impacts occur where very large areas of forest are clear cut using heavy machinery, no residual trees are left standing, and logs are transported a long distance to the processing point.

Harvesting

Biodiversity Impacts (-)

Soil Erosion

Financing

Mixed or Coniferous Forest Harvesting

Coniferous and non-coniferous Logs and residual wood

Labour

Soil

CO2 Emissions Impacts (-)

Energy

Water Pollution (Sedimentation)

Machinery (cutting, clearing, road buildintransporting by road/water/air, log moving

g, etc.)

Inputs Outputs ImpactsInputs Outputs Impacts

Un-reclaimed wood waste

Social / Economic Impacts (+/-)

RecreationaImpacts (+/-)

l

Figure 10: Overview of impacts of harvesting stage

Soil Erosion

6.1.23 Harvesting results in soil erosion, soil structure breakdown and loss of soil nutrient value. The soil structure is damaged in the process of cutting down trees and building the network of roads to access the cut blocks.

6.1.24 When the trees are removed over a large area, the roots systems no longer absorb water. During periods of heavy precipitation the rain impacts the soil at a higher speed since it is not slowed by the presence of a canopy. The rain quickly saturates the soil and runs over the surface at a quicker rate than when the land was covered with trees and other vegetation. This rain water picks up soil and other nutrients and carries them down the land grade. Sediment is deposited on shallower grades and into streams and other water courses. Steeper slopes experience increased erosion in the absence of a vegetative cover and are more prone to slippage and land slides.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 6.1.25 Soil organic matter content influences aeration, water holding capacity, soil

micro-organisms, decomposition and nutrient cycling processeslxvi. Collectively these attributes contribute to soil productivity and support the successful emergence of replanted trees. After harvesting, soils can be left exposed to sun, wind and rain for several years before new forests emerge leaving them vulnerable to erosion and loss of soil organic matter.

6.1.26 Soil erosion and soil compaction also occur as a result of heavy machinery driving back and forth between the cutting area and the landing area where logs are loaded onto trucks for transport to the processing area. The magnitude of soil damage relates to the number of times a machine drives over the soil, the weight of the machine and the size of its tires.

6.1.27 Soil erosion also depends on whether the logs are being picked up at the cut site and carried off the ground to the loading area by a forwarder, or dragged from the cutting site to the loading area by a skidder. Skidding logs over the ground increases soil damage and can also damage the trunks of other standing trees that are hit by the limbs of the felled tree as it is dragged though the forest.

6.1.28 Sedimentation of rivers and streams can be very detrimental to fish and other aquatic biodiversity. Most fish and are extremely sensitive to changes in water conditions including turbidity, temperature, speed and chemical composition. Excessive sediment can reduce water quality, damage suitable egg laying areas, cover eggs with silt, and reduce oxygen levels in the water. Since deforestation increases runoff during periods of heavy precipitation, streams levels can suddenly increase and wash away eggs or young fish. Fish area also very sensitive to chemicals that leach into surface water from the wood residue, sawdust and bark mulch that accumulate near landing areas where cutting and loading occur. If trees are harvested right to the riparian zone, then additional slash and deadfall waste can clog the waterway and prevent fish from moving up or down the river.

Biodiversity Impacts

6.1.29 Loss of habitat is another significant impact of harvesting. Changes in landscape state produce changes in habitat conditions that are favourable to certain species that prefer open areas and the plants that emerge after cutting. However, deforestation disadvantaged other species that rely on enclosed forest spaces and old growth environments. Many species of animals, for example bald eagles and owls, require large areas of untouched forests to find sufficient food. Large scale forestry activities can both diminish the existing food sources for these animals and force the animals into closer proximity to each other which can lead to territorial conflicts. In other cases, deforestation reduces niche habitats for plants, animals and insects that rely on very specific conditions that are present in small areas with old growth and natural forests. Over time, landscape level

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changes brought about through forestry activities have the potential to endanger biodiversity that is dependent on niche environments.

Emissions

6.1.30 Commercial scale harvesting activities employ a range of heavy machines to improve efficiency and to enhance safety for workers. These machines consist of harvesters, forwarders, skidders, cable yarders, loaders and trucks to bring the logs to the processing point. Chain saws are also used to cut on steep terrain, to delimb trees, and to buck trees into shorter lengths. In addition to soil compaction and other localised damage associated with operating heavy machines, there is also the lesser impact of emissions from engine combustion. The primary fuel source for heavy machines is diesel, while gasoline is used in the vehicles used to transport crews to and from the cut site and to operate chain saws. Emissions are directly related to the level of mechanisation of the harvesting activities and the distance that the logs must be transported between landing areas and processing points.

6.1.31 Harvest activities result in sizable step level changes in carbon stocks. As trees grow they sequester carbon in their crown, stem, roots and soil. Although the dynamics of sequestration are complex, living trees are a net sink for carbon. When trees are cut down this sequestration process stops. Carbon continues to remain stored within the stem which is turned into lumber and pulp products. However, roots, tree limbs and foliage that is left in the forest decay and become sources of greenhouse gases, especially CO2.

6.1.32 Figures 11 and 12 below provide data on energy and fertiliser consumption associated with typical coniferous forest lifecycle scenarios in the Southeast and Pacific Northwest Regions of the United States. Trees in the Southwest example are used for both lumber and pulp while those in the Northwest example are used exclusively for lumber (only the residual from milling goes to pulp). The lifecycle includes the production and planting of seedlings, thinning and stand management activities, harvest and transportation to a mill. The figures provide information on a standard base scenario and an alternative scenario exemplifying more intensive management. Although this data will not be identical to forest scenarios in other countries, provides a useful illustration of the magnitude of energy and fertiliser inputs associated with a stand rotation age of 25 years in the Southeast the 45 years in the Pacific Northwestlxvii.

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Figure 11: Typical forest lifecycle fertilisation consumption

Figure 12: Typical forest costs and energy consumption—base and alternate case

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Transportation of logs to processing point by rafting

6.1.33 In some circumstances, logs are moved from the forest to the sorting and storage areas by water. This involves tying the logs together into rafts (25 meters wide by 170 meters long) and dragging them with tug boats either in wide slow moving rivers, or for short distances over the ocean. Log rafting and storing can affect water quality and benthic ecologylxviii. Common tree species transported by this method include hemlock, yellow and red cedar, and spruce. Investigations of the water and benthic environment around these log rafting sites indicates that they logs leach chemicals into the water that in high concentrations can be harmful to salmon fry and presumably other marine animals. The second problem associated with these activities is the accumulation of bark and other wood material on the bottom which covers natural habitat.

Social and Economic Impacts of Harvesting

6.1.34 Negative social and economic impacts are most prevalent in developing countries where land owners and small scale forest companies displace local indigenous people from their lands, and employ ecologically harmful production and harvesting methods, without adequate safety provisionslxix. For indigenous communities that remain in the region, access to traditional sources of food and other non-wood products is limited. Further, they may suffer the most directly from soil degradation, wildlife displacement, fire and other impacts associated with harvesting activities.

6.1.35 Many indigenous cultures place great importance on the non-timber values of the forest. This can include medicinal herbs and plants, hunting and trapping of local wildlife, accessing sites of spiritual and archaeological importance and using the forest for recreation. These values tend to be negatively affected by harvesting operations. These negative impacts are not confined to aboriginal groups. Deforestation results in reduced recreational and tourism opportunities related to hiking, sightseeing, camping and other wilderness activities for the larger population.

6.1.36 Other economic impacts are associated with damage to fish spawning rivers and the related reduction in fish stocks. This has a consequent impact on the commercial and sports fishing industries.

Illegal logging

6.1.37 Harvesting timber illegally causes damage where ecologically sensitive techniques are not employed, replanting is not undertaken and only the most valuable trees are harvested. Illegal logging costs governments billions of dollars in lost revenue, and is closely associated with corruption and organised crimelxx. It has a direct negative economic impact on legitimate forest operations in both exporting and importing countries because it undermines their competitiveness. At the same time it can be the source of social problems since it occurs in contravention to local

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property rights and without adequate stakeholder consultation. Illegal logging often targets threatened tree species or occurs within protected areas. It results in significant negative environmental, social and economic impacts, particularly in developed countries.

Mitigation/options for improvement

6.1.38 Forestry practices in many countries have evolved considerably over the last two decades to reduce ecological impacts associated with harvesting and reforestation activities. Best practices include:

• Taking an ecosystem approach to forestry operations that seeks to

first understand local ecosystem dynamics, model their interdependencies, develop indicators that enable ecosystem services and ecological health to be monitored, and track indicators over time to ensure that ecological integrity and biological diversity are not diminished.

• Replanting recently harvested natural forests with the same natural mix of species that existed before, especially using cone and seed stock from the original trees.

• Retaining a portion of standing dead snags and also deadfall on the forest floor to provide niche habitats

• Avoiding cutting on steep slope and near riparian zones • Maintaining corridors between cut blocks to allow wildlife to travel

between forested areas and to assist in re-establishing natural plant and animal populations.

• Reducing soil erosion and compaction by reducing the number of times machines drive over the land and using large tires to distribute machine weight.

• Constructing roads with proper grading and water damming features to reduce sediment loads in surface water.

• Undertaking meaningful consultations with affected stakeholders to minimise negative impacts, respect traditions and important site, and provide economic benefits for local populations.

Milling

6.1.39 Figure 13 provides an overview of the primary inputs into the lumber milling process and the associated environmental, social and economic impacts. The three main stages of the milling process are sawing the raw logs, drying the rough lumber, and planing the lumber to a finished construction grade. Alternative milling processes are used to produce veneers for plywood. These consist of soaking the wood, removing the bark, peeling the wood, drying the veneer, and gluing it together under heat and pressure. Secondary milling uses wood chips, sawdust and other by-product materials

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to produce particle board, oriented strand board, multi-density fibreboard and other specialty products. These secondary manufacturing processes are complex and product specific. The environmental impacts investigated for this paper related to lumber milling and do not investigate impacts associated with veneer production and secondary manufacturing (with the exception of pulp and paper).

Milling

Lumber (Rough)

Labour

Milling

Lumber (Finished)

Air P(CO

Chemic

ollution 2, als)

Coniferous and Non-Coniferous Logs

Machinery

Energy (wood based fuels, ga

s, electricity)

Water Pollution (Chemicals,

organic matter)

Water

Chemical solvents and glues

Inputs Outputs ImpactsInputs Outputs Impacts

Solid Waste

Peeled Veneers

Waste Wood Reclaim

Social / Economic Impacts (+/-)

Figure 13: Overview of impacts from milling process

6.1.40 The main species used to produce lumber are mainly spruce, pine, Douglas fir and hemlock.

Environmental impacts

6.1.41 Environmental impacts associated with lumber milling are closely related to the technology used. In general terms, the main environmental impacts of milling relate to electricity and fuel use, water consumption, emissions to air, and solid emissions. They are considered separately below.

Energy use

6.1.42 Electricity is used to operate saws and conveyors, drying kilns, boilers, planing machines, and mill lighting. Electricity used in the sawing process represents around half of total electricity use in the milllxxi. The drying kilns use about one quarter of mill electrical demand, with boiler, planing and other operations using the remainder. Environmental impacts associated

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with the production of this electricity (i.e. coal, hydro, nuclear) are outside of the scope of this analysis.

6.1.43 Boilers generate steam used to dry the green wood prior to planing. Boilers are fuelled primarily by natural gas or by wood based fuels that are derived from the by-products of the milling process. Wood based fuel comes from bark, hog fuel (unprocessed mix of barks and wood fibre) and sawdustlxxii. Combustion of wood based fuels in boiler operations produce emissions of the following substances, CO2, CO, acetaldehyde, formaldehyde, phenol, NOx, SOx, particulates, and inorganic material.

6.1.44 Log and lumber handling equipment, such as forklifts and loaders, operate on diesel or propane and have associated emissions to air.

6.1.45 Figure 14 below provides data on airborne emissions associated with the production of 1.624 m3 (one thousand board feet of 2x6 lumber) of planed dry lumber from logs. The figures are based on typically production processes in the north-western and south-eastern US. While they may not compare exactly to lumber mills in other countries, they are illustrative of the order of magnitude of the various emissions.

Figure 14: Air emissions from planed dry lumber production1

1 Source: Gate to Gate Lifecycle Inventory of Softwood Lumber Production, Wood and Fibre Science, 2005

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Water use

6.1.46 Water is mainly used to wet the logs prior to cutting. It is also used to produce steam that is used in the drying process. Water used in milling operations is usually recycled or evaporated and not discharged. This may not be the case in some developing countries. Water use in US milling operations is estimated to be between 250-600kg to produce about 2 cubic meters of dry planed lumber depending on the production processlxxiii.

Social and economic impacts of milling

6.1.47 People working in lumber milling within developed countries are likely to receive moderate pay, comparing favourably to alternative livelihood earnings in the same regionlxxiv. Since forest operations take place in remote areas removed from urban centres, they often form a main source of employment for small rural communities. This is especially true of small towns where a lumber, pulp or paper mills operate and support (directly or indirectly) a large number of jobs. These rural communities become heavily dependent on the harvesting, milling and transportation related employment and as such become highly vulnerable to mill closures that result from changing market conditions. Mills tend to operate in all or nothing states, employing many people if they are profitable or laying off everyone and closing if they become uncompetitive. As such, social impacts related to employment in forest operations often occur quickly and affect many people. Government and company programs to help people find new jobs have not shown widespread success.

Transportation

6.1.48 Environmental and social impacts of lumber transportation depend on the distances that the commodity is shipped and the method of its transportation (rail, boat, truck etc.). The wide range of distances and methods of transportation made an investigation difficult. No research addressing this specific topic was found. Generally, emissions related to fossil fuel use will increase with distance travelled regardless of the method of transportation. Other environmental impacts are likely to include, chemical and organic water pollution related to cleaning boat holds.

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7 Case Studies – Latvia and Estonia

7.1 Latvia lumber case study

Overview

7.1.1 Latvia regained its independence in 1991 after being part of the Soviet Union since 1940. It moved quickly to modernise its economic, social, environmental and political structures and over the last decade has integrated itself into global markets. In 1999, Latvia became the first Baltic country to join World Trade Organisation lxxv, and in 2004 it joined the European Union.

Latvia tree species

Pine39%

Spruce20%

White alder6%

Birch29%

Aspen3%

Black alder2%

Oak, Ash1%

7.1.2 Although Latvia is a small country (64,589 sq km), nearly half of it (29,230sq km) is covered in forest lxxvi. The forest products sector is a major component of national economic activity, representing the primary natural resource industry and the main export product. In 2004, forest product exports totaled $834,925,536 and accounted for 19% of all of Latvia’s exports.

Forest cover and type

Figure 15: Latvia land cover Figure 16: Latvia main tree species2

Latvia Land cover type (2004)

Non-forests 3,435,900km2

(54%)

Natural forests 2,780,000km2

(44%)

Plantations 143,000km2

(2%)

2 Source: World Resources Institute for land cover and FAO for tree species

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Market Structure

7.1.3 After achieving independence, the new Latvian government set out to renew the traditional rural lifestyle by returning the land that had been held in publicly owned collective farms to its original owners or their next of kin lxxvii. Today, half of Latvia’s forest had been returned to private ownership with the state retaining ownership of the other half lxxviii. This process resulted in over 164,000 private landowners with an average parcel size of about 1 hectare lxxix.

Regulatory Structure

7.1.4 As part of its efforts to establish a market based economy, the state-owned forests have been corporatised, with a mandate to achieve economic self-sufficiency lxxx. The Ministry of Agriculture oversees the Department of Forest Policy, the Department of Forest Resources, and the State Forest Service. The State Forest Service implements forest policies, monitors and inventories habitats, establishes micro-reserves, and ensures that norms and laws are obeyed lxxxi. The public forest lands are administered by LVM Ltd. (“Latvian State Forests”) a state owned corporation for which the ministry of Agriculture controls all shares. LVM Ltd. manages eight regions, which are run as independent economic units.

7.1.5 Although it had revised its forest laws in 1996, the government found that they reflected former Soviet practices and were not well suited to emerging market based activities lxxxii. With the help of the UN and FAO the government of Latvia initiated a technical cooperation project to strengthen the institutional capacity of the Latvian forest authority. The outcomes of this initiative included a National Forest Program and a draft set of revised forest laws. In 2000, the government adopted the Law “On State Forest Service” and the Forest Law. These laws now govern forest activities for both public and private forest lands lxxxiii.

Production

7.1.6 Private logging companies acquire access to timber through contract auctions for felling-rights in the public forests lxxxiv. They gain access to privately owned timber by participating in auctions for felling-rights on private land or by purchasing whole forest properties that are advertised in Latvian newspapers lxxxv.

7.1.7 The total volume of trees felled by all logging companies in 2005 was 11.26 million cubic meters lxxxvi. Harvesting in public forests accounted for the majority of this volume, although production from private holdings is significant. Although more recent figures were not immediately available, 45 percent of timber production in Latvia originated from private lands in

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1998 lxxxvii. This suggests that small property size has not presented an insurmountable obstacle to expansion of overall forest production.

7.1.8 In an effort to secure long term supply of raw materials, several logging companies have become sizable private landholders. The high rate of logging on private land has led some companies to predict that there will be a shortage of productive timber on private lands in the next few years lxxxviii.

7.1.9 Forestry in Latvia provides wood for lumber and for pulp. Wood for lumber is milled domestically. There is some integration of operations with companies owning both the cutting and milling operations. Pulp wood is either shipped in a rough form as raw pulp logs or chipped domestically and then exported. The UK is the primary market for finished lumber, while Sweden is the primary trade partner for rough wood and for pulp wood and chips.

Foreign Investment

7.1.10 Latvia offers relatively low production costs, abundant and high-quality raw materials, close proximity to European markets, a reliable transport network with ice-free ports, and an educated and multilingual workforce. These factors have attracted considerable foreign investment into the Latvian forest product sector. The biggest investments have been made in timber producing enterprises and were led by the UK, Germany and Finland. The USA and Finland have invested heavily in pulp and paper manufacturing enterprises, while investment in furniture manufacturing has been led by Germany, Denmark, Sweden and USA lxxxix. This reflects trends in international trade as described in the next section.

Trade statistics

7.1.11 The figures below illustrate Latvia’s major trade relationships in forest related products. Latvia’s largest export commodity is lumber (mostly coniferous). The UK is by far the largest trade partner, representing 61% of Latvia’s export market for coniferous lumberxc. Heavy dependence on a single export partner is also reflected in Latvia’s relationship with Sweden which imports most of Latvia’s wood chips (for pulp) and rough wood (for pulp and furniture). Sweden represents 77% of Latvia’s export market for these two commoditiesxci. Globally, Latvia is the 10th largest producer of coniferous lumber, the 8th largest producer of wood chips, and the 10th largest producer of rough wood.

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$-

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

Wood chips Wood rough Wood simplyworked

Pulp andwaste paper paperboard

Paper and

Latvia International Trade in Forest Products (2004)

ImportsExports

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

UnitedKingdom

Japan Germany Ireland USA Otherpartners

Latvia coniferous lumber exports (2004)

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

Sweden Denmark Finland Estonia Norway Otherpartners

Latvia exports of wood chips and rough wood (2004)

Rough woodWood chips

Figure 17: Latvia international trade in forest products

Environmental Issues

Deforestation and habitat degradation

7.1.12 Between 1990 and 2005 forest cover increased by 6% or about 166,000 hectaresxcii. This would suggest that Latvia’s national forest policies and regulatory structure are not resulting in unsustainable harvest rates.

7.1.13 Latvia’s forest regulations require logging companies to apply for permits in order to fell trees; build or reconstruct drainage systems that could affect the forest; build forest roads; harvest forest reproductive material; or apply mineral fertilisers and pesticides in forestxciii. Latvia has also established laws to protect riparian zones around waterwaysxciv, and has strict regulations on the allowable size of a clear cut. These cut blocks are limited to 5-10 hectares in size, a mere fraction of what is allowed in countries such as Canada. Further, at least 40 seed trees per hectare must be left on sitexcv. In Latvia, reforestation is required by law within three years on both public and private lands, with required stocking levels being determined for different forest regionsxcvi.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 7.1.14 These regulations have reduced the magnitude of primary environmental

impacts associated with harvesting, especially soil erosion, habitat degradation and fragmentation, and loss of tree diversity.

Biodiversity

7.1.15 Latvia has established legislation for the protection of endangered species and their habitatsxcvii, and has also prepared an Environmental Action Plan which includes measures to ensure the maintenance of present levels of biodiversity xcviii. Latvia has also taken measures to coordinate its conservation measures with European Union efforts.

7.1.16 Collectively, Latvia’s forestry and environmental laws provide a firm foundation for sustainable forest resource management and have limited the extent of environmental degradation and loss of biodiversity that is associated with industrial forest operations in many other countries. This record of sound environmental management resulted in Latvia receiving Forest Stewardship Certification for all of its publicly held forests in 2004.

7.1.17 Perhaps the most pressing environmental issues relate to the high level of fragmentation of Latvia’s privately held forest land. Although in theory small ownership can create desired variability across the forested landscape, in practice the economic constraints of small-scale forestry may sometimes serve as disincentives for maintaining forest cover on small propertiesxcix. Extensive timber harvesting on small privately held pieces of land may lead to excessive forest fragmentation and preclude effective landscape-level planningc. Having over 150,000 individual forest land owners also increases the difficulty of reaching common agreement among different interests regarding forest management practices. Further, the high costs of Forest Stewardship Certification combined with a lack of domestic demand for FSC timber, reduces the incentive for private land owners to meet the high standardsci.

7.1.18 Other recurrent issues relate to a lack of regulatory follow up to ensure that forest areas destined for tending in forest management projects are actually tended. As well, the domestic market for small-size timber and waste wood is limited, so the material is often left lying in cutting areas. In small quantities this provides habitat for niche biodiversity. However, at excessive levels it poses some risk of forest pests increases, presents an obstacle to soil cultivation prior to artificial forest regeneration, and decreases fire resistancecii.

Social and Economic Issues

7.1.19 Social and economic issues in the Latvian forestry sector primarily related to economic returns, working conditions, health and safety standards, and illegal logging.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 7.1.20 Available figures for employment in Latvia’s forest sector are somewhat

dated. In 1996, there were about 50,000 employed in forestry related jobs (cutting, milling etc.) and a further 9000 in related pulp and furniture industriesciii.

7.1.21 There is a high degree of subcontracting within the Latvian forest sector. Forest companies that own the felling rights, usually subcontract chain saw operators and may subcontract heavy machinery operators as well. Workers are usually paid by the cubic meter of wood cut or in some cases by the hectareciv. Competition among contractors reduces profit and job security is limited. Most workers are not part of a union or trade associationcv. A typical workweek is 40 hours. There is some opportunity for job rotation within sawmills, but none for the forestry workerscvi. In most companies the machines are operating 24 hours a day. Shifts for harvest operators are between 8, 12 and 24 hours with subsequent time offcvii. There are varying degrees of safety training and safety equipment provided to workers.

7.1.22 Illegal logging in Latvia includes timber theft, logging without a legal felling license or logging with a proper license but ignoring the rules and regulations. In 2003, illegal logging in Latvia was estimated to represent about 0.7% of total harvest, and included about 10,000 cubic meters taken from state lands and 90,000 cubic meters from private landcviii. It causes economic losses to the land holder, reduces tax revenue for the government, and may result in environmental degradation where unsustainable practices are used. Further, unregistered illegal logging enterprises compete unfairly in public and private auctions for felling-rights since they do not pay the 18-20% income tax and are therefore able to outbid legitimate companiescix. While it is hard to provide a complete picture of the extent of illegal logging in Latvia since much of it goes unreported, there is some evidence to suggest it is declining in recent years as a result of improved regulations and enforcement and stewardship certification measurescx.

Economic Issues

7.1.23 Economic issues not covered above generally related to access to forests. The forest road network in Latvia is not sufficiently dense, at 6.5 meters per hectare, to facilitate efficient forest product harvesting and transportationcxi. The fragmentation of private holdings, the emergence of different land uses surrounding private forest lands, and the lack of access roads have made access to timber in some areas difficultcxii.

7.1.24 The growth of the forestry sector has resulted in a shortage of skill lumbermen which has led to a drop in quality and an increase in industrial accidentscxiii. Over the longer term, the quality of future forest stock may be affected by a current shortage of high quality material (seedlings, plants) for forest regenerationcxiv.

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Policy Frameworks and Sustainability Initiatives

7.1.25 Latvia’s desire to become part of the European Union, its centralised government control structures and relatively low forest harvest levels made it possible for Latvia to align its internal policies and conservation initiatives with international effortscxv. Latvia has created new nature reserves to contribute to a Pan-European Ecological Network consistent with the EU’s Species and Habitat Directivecxvi. As of 2003, Latvia had created 541 protected areas that represented 15% of its total land basecxvii.

7.1.26 Latvia has adopted best management practices and received Forest Stewardship Council certification for all of its state forests. It has encouraged private land owners to become FSC certified and has also taken action to promote the Pan European Forest Certification Council standards for private land owners.

7.1.27 National and international environmental organisations such as the World Wide Fund (WWF), Latvian Fund for Nature and the Latvian Ornithology Society have initiated projects and research to positively influence policy. Major companies like IKEA have also been active in ensuring sustainable forest practices are adopted throughout Latvia.

7.2 Estonia lumber case study

Overview

7.2.1 Estonia regained its independence in 1991 after having been part of the Soviet Union since 1940. Like Latvia, Estonia quickly moved to reintegrate itself into European and international markets and political structures. Estonia introduced market oriented reforms and joined the World Trade Organisation shortly after Latvia in 1999. It joined the European Union in 2000.

7.2.2 Estonia is slightly smaller than Latvia at 45,226km2. About 47%, or 20,166 km2, of Estonia is covered with forests. The forest products sector is a major component of national economic activity, representing the primary natural resource industry and the main export product. In 2004, forest product exports totalled $519,209,389 and accounted for 9% of all of Estonia’s exports.

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Estonia land cover (2000)

Plantations 3,050km2

Natural forests, 17,550km2

(39%)

Non-forest land 24,626km2

(54%)

(7%)

Estonia tree species

Birch27%

Spruce25%

Pine39%

Grey alder4%

Others5%

Figure 18: Estonia land cover Figure 19: Estonia main tree species

Forest cover and type

7.2.3 Pine, birch and spruce are the dominant species in Estonian forests followed by grey alder, aspen and others.

Market structure

7.2.4 As in Latvia, privatisation of land started soon after Estonia achieved its independence from the Soviet Union in 1991. By 2002, 37% of forest land had returned to private ownership and another 25% was in the process of being privatisedcxviii. This process has created over 60,000 forest owners with an average property size of approximately 12 hectares-considerably larger than the one hectare average private holding in Latviacxix. Very few of these private landowners are members of a private foresters associationcxx.

7.2.5 Estonia’s move away from state run forests has encouraged the emergence of many small private logging companies. Some of the larger companies are owned by international forest companies, especially from Sweden, Finland and United Kingdom. This reflects a global trend towards agglomeration and integration among the world’s largest forest companies intended to secure long term access to fibre supply and reduce costs between divisions within the larger company. It also occurs because of the high cost of advanced heavy machines such as harvesters, forwarder and trucks which are currently beyond the means of smaller Estonian companies to purchase and operatecxxi. Approximately 10% of Estonia’s forests are owned by foreign investorscxxii.

Regulatory structure

7.2.6 Forest management reform in Estonia progressed after independence and in 1998 a new Forest Act was proclaimed, establishing a revised legal and management structure including the State Forest Management Centre

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(RMK). RMK is a governmental profit-making institution with the responsibility for surveillance and protection of state forests, sale of timber and pulpwood, planting new forest, maintenance of forest roads, hunting management, research and other activitiescxxiii. The forest management department is the largest within RMK and is mandated to generate revenue from the sale of timber from state forests. It does this by selling licences to harvest timber on state lands.

Production

7.2.7 Private logging companies acquire access to timber through contract auctions for felling-rights in the public and private forests. They also purchase private forest holdings to increase the security of their access to timber and to smooth their harvesting operations across seasons and regionscxxiv.

7.2.8 The annual harvest in Estonia has increased rapidly during the last decade, from 2.5 million m³ in 1993 to around 12,000 m³ in 2002. Most of the wood is taken from final fellings, but the volume of wood from thinning operations has also increasedcxxv. Harvesting on state forests represented about 40% of all felling. This illustrates the higher contribution to total timber production that private landholders make. Most of the increase in production over the last decade has occurred on private landcxxvi.

7.2.9 Figure 20 below illustrates the dramatic growth in the production from private lands over the last few years.

Figure 20: Growth of timber production from public and private lands in Estonia 3

3 Source: Draft paper on forest certification in Estonia (http://www.yale.edu/forestcertification/symposium/pdfs/estonia_symposium.pdf )

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 7.2.10 Over the period 1990 to 2000 Estonia’s forests grew in area by about

6%cxxvii. Most of this occurred as a result of natural regeneration on abandoned agricultural land and natural grasslands, a process that is continuingcxxviii.

Trade statistics

7.2.11 The figures below illustrate Estonia’s major trade relationships in forest related products. Estonia’s largest export commodity is lumber (mostly coniferous). The UK is by far the largest trade partner, representing 31% of Estonia’s export market for coniferous lumbercxxix. Estonia is heavy dependent on Sweden and Finland as export partners for wood chips (for pulp) and rough wood (for pulp and furniture). In 2004, Finland purchased 61% of Estonia’s wood chips and 26% of its rough wood. While Sweden purchased 14% of Estonia’s wood chips and 52% of its rough lumber. Globally, Estonia is the 14th largest producer of coniferous lumber, the 14th largest producer of wood chips, and the 15th largest producer of rough wood.

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

Wood chips Rough wood Wood simplyworked

Pulp andwaste paper

International trade in forest products (

Paper andpaperboard

2004)

ImportsExports

$0

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$100,000,000

Finland Denmark Sweden Norway Ireland Germany Otherpartners

Estonia export of wood chips and rough wood (2004)

Rough woodWood chips

$0

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$60,000,000

$70,000,000

$80,000,000

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$100,000,000

United Kingdom Germany Netherlands Denmark USA Other partners

Estonia exports of coniferous lumber (2004)

Figure 21: Estonia international trade in forest products

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Environmental Issues

Deforestation and habitat degradation

7.2.12 The main environmental impacts related to over harvesting and lack of reforestation to regenerate the natural mix. In 2003, the Estonian Minister of Environment indicated that spruce and pine were being excessively logged, particularly on private lands. Their relative abundance compared to aspen and alder was declining swiftly and was undermining the natural diversity of Estonia’s forestscxxx. Spruce forests have declined at a rate of 4% per year, representing a total loss of 15,000 hectares of spruce forests annuallycxxxi.

7.2.13 Although Estonia has strictly limited the size of clear cut blocks to 5 hectares and mandates minimum retention of dead trees. Further they have specified that the clear cut cannon exceed 150 meters in width and must achieve sufficient regeneration before neighbouring stands can be cutcxxxii. While these are important measures to reduce the impact of specific cut sites, the government has not reduced the annual harvest rates which are currently at or above levels of regenerationcxxxiii.

7.2.14 Fragmentation of the forests is occurring due to increasing road density. This reduces the linkages between forest areas and makes natural species regeneration more difficult while also reducing the ability of wildlife to move between forested areascxxxiv.

Illegal logging

7.2.15 Estimates suggest that 10% of all harvested lumber is felled in violation of existing forestry regulationcxxxv. Most of this occurs on private land and includes logging premature stands and excessive thinning. There is a low awareness of ecologically based forest management practices among private landowners who tend to base their decisions on short term profitabilitycxxxvi. Most private forests are regenerated naturally since landowner does not have to pay tax for his forestland until the regeneration is over 1.3 meters highcxxxvii.

7.2.16 Log theft is also a serious problem in Estonia. In 2003, the share of illegal fellings was 0.8% of total volume of private forests fellings and 0.1% of state forest fellings.

Biodiversity

7.2.17 Estonia’s forest include a remarkable variety of ecologically valuable habitats and support an abundance of biodiversity including rare and endangered species such as flying squirrel, European mink, black stork and a variety of plants. Rapid deforestation and fragmentation is putting pressure on local biodiversity. In response, Estonia has expanded the number of protected areas within its borders. Strictly protected forests total

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now about 7.2% of all forests, a figure that is expected to rise to 10% with Estonia’s participation in the Natura 200 processcxxxviii.

Drainage of wet forests

7.2.18 Wetlands cover about 20% of Estonia and have been the focus of many drainage projects since they are difficult to manage and the trees that grow there are not as valuablecxxxix. At least 550,000 hectares of wet forests have been drained to datecxl. This reduced the ecological services of these habitats and impacts biodiversity that depend on them. Limits on new drainage projects are now in effect to mitigate further loss of wet forest ecosystemscxli.

Social Issues

Wages, health and safety

7.2.19 Production in the forest products industry has grown rapidly in Estonia. This has been accompanied by increasing revenue and an upward trend in real wages in the industrycxlii. However, the rapidly growth has also resulted in an increase in less skilled workers entering the industry which reduces average wages and increases the rate of accidents.

7.2.20 Although health and safety related regulations have been established for the forestry sector by the Estonian government, they have not been effectively implementedcxliii. Many companies are unaware of existing regulations and forestry continues to be one of the most hazardous industries in Estonia.

Stakeholder consultations

7.2.21 There is room for improvement in stakeholder consultations to ensure that non-timber forest values including recreational, spiritual and other values are maintained for local people. Harvesting of mushrooms, berries and other non-wood forest products are an important part of the rural Estonian lifestyle and will need to be incorporated into land management decisions.

Economic Issues

7.2.22 Economic issues in the Estonian forest sector includecxliv:

• High costs and low productivity associated with moving heavy machines between small fragmented harvest sites.

• A ban on logging in the spring intended to allow animals to mate undisturbed.

• Neglected silviculture activities which have reduced the productivity of forest stands and increased the costs per cubic meter.

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• A lack of long term contracts for forest companies which reduce their ability to make long term plans and investments and harvest strategically.

• Forest taxes are high and provide an incentive for a black market in the forest sector which increases competition for the law-abiding logging companies.

Policy Frameworks and Sustainability Initiatives

7.2.23 Estonia’s forest industry is subject to a wide range of policies and regulations regarding licensing for felling rights, seasonal harvesting restrictions, conservation restrictions, taxes, and health and safety standards etc. A full account of these measures is beyond the scope of this case study.

7.2.24 There are also a number of sustainability initiatives related to forestry in Estonia.

• National and international projects have been initiated to improve

the condition and improve the natural variety of Estonia’s forests. These include the Estonian Forest Conservation Area Network Project, Estonian Woodland Key-habitats Inventory Project and otherscxlv.

7.2.25 Forest certification has also received considerable attention in Estonia. All of Estonia’s state forests have received Forest Stewardship Council Certification and two private forests have also received it. The industry has also developed a national forest certification scheme and has submitted it the Pan European Forest Council for approval.

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8 SUMMARY 8.1.1 Forest products including coniferous lumber and coniferous/non-coniferous

based pulp and paper products represent major UK commodity imports with significant potential environmental and social impacts depending on the nature of their production.

8.1.2 Environmental impacts occur at each stage of production: pre-harvest forest management activities, harvesting, transporting, milling, secondary manufacturing and transporting. The magnitude of the impacts depends on the characteristics of the initial forest and the methods of harvesting and milling.

8.1.3 The most significant risks relate to poor forest management practices that lead to ecological damage including soil erosion, habitat loss, loss of natural forest ecosystems and their associated biodiversity. Social impacts of great concern are displacement of local and indigenous people from their traditional lands. There are also significant risks associated with pulp and paper manufacturing; most importantly the release of very toxic, persistent and bioaccumulative substance in liquid effluent and air emissions.

Environmental Impacts

Pre-harvest forest management

8.1.4 Environmental impacts related to proactive establishment of a commercially viable forest can include the following: air pollution and damage from use of fire; changes in soil stability; water pollution from chemical herbicides, pesticides and fertilisers; and changes in carbon stocks. The magnitude of impacts needs to be considered from the context of changes in the landscape conditions. Given the enormous scales at which forest landscapes are manipulated, the cycle of deforestation and reforestation has the potential to significantly alter the biological diversity.

Harvesting

8.1.5 In broad terms, harvest related impacts can include loss of wildlife habitat, changes in soil stability, soil erosion and compaction, sedimentation of surface water, damage to fish spawning rivers, air pollution, and changes in carbon stocks. The magnitude of the impacts are directly related to the size of the cut block, the amount of residual trees left standing, and the intensity of mechanisation in the extraction process.

Social and economic impacts

8.1.6 Social impacts related to pre-harvest activities include land rights, employment, access to the forest for traditional activities, and the consequences of environmental degradation.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 8.1.7 Impacts related to land rights are usually country and location specific but

generally involve the displacement of local people in advance of logging activities. Displacement of indigenous people can have profound negative impacts on their wellbeing since their traditional activities, sources of food, livelihoods, culture and spirituality are closely related to the primary forest.

Mitigation/Improvement options

8.1.8 Reducing harvest related environmental impacts can be effectively achieved through science based forest management practices that seek to understand desirable ecosystem dynamics and then develop strategies to maintain them. Best practices include:

• Taking an ecosystem approach to forestry operations that seeks to

first understand local ecosystem dynamics, model their interdependencies, develop indicators that enable ecosystem services and ecological health to be monitored, and track indicators over time to ensure that ecological integrity and biological diversity are not diminished.

• Replanting recently harvested natural forests with the same natural mix of species that existed before, especially using cone and seed stock from the original trees.

• Retaining a portion of standing dead snags and also deadfall on the forest floor to provide niche habitats

• Avoiding cutting on steep slope and near riparian zones • Maintaining corridors between cut blocks to allow wildlife to travel

between forested areas and to assist in re-establishing natural plant and animal populations.

• Reducing soil erosion and compaction by reducing the number of times machines drive over the land and using large tires to distribute machine weight.

• Constructing roads with proper grading and water damming features to reduce sediment loads in surface water.

• Undertaking meaningful consultations with affected stakeholders to minimise negative impacts, respect traditions and important site, and provide economic benefits for local populations. Integrating traditional indigenous knowledge of forest ecosystems can also enrich western scientific approaches to forest management.

Environmental impacts of milling lumber

8.1.9 Environmental impacts associated with lumber milling are closely related to the technology used. In general terms, the main environmental impacts of milling relate to electricity and fuel use, water consumption, emissions to air, and solid emissions.

Environmental impacts of pulp and paper manufacturing

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 8.1.10 The primary environmental impacts associated with the production of pulp

and paper products relate to the forest management practices that generate the raw material (wood chips or pulp wood) and the impacts associated with producing pulp and making common paper products.

8.1.11 The most significant environmental impacts of pulp and paper making related to the pulping and bleaching processescxlvi. Of particular concern are liquid and air emissions, particularly chlorinated organic compounds, dioxins, furans, and other toxic and bio-accumulating substances. Greenhouse gases are also a concern since the paper cycle is a net emitter of greenhouse gases after sequestration of forests is taken into accountcxlvii,cxlviii. Pulp and paper production is a very energy intensive process.

Social and economic impacts

8.1.12 The most significant social and economic impacts relate to 1) displacement of local people from their lands, 2) closing of mills and the subsequent loss of livelihoods for rural populations, and 3) health related impacts from air and water pollution resulting from pulp and paper manufacturing.

Mitigation/options for improvement

8.1.13 The pulp and paper manufacturing industry is complex. There are a wide variety of production methods each with associated environmental impacts. As such, specific mitigation measures are beyond the scope of this paper. In general, elemental chlorine free (ECF) and totally chlorine free (TCF) bleaching processes produce far less toxic waste than elemental chlorine bleaching and as such are preferable. The bleaching process itself is a significant contributor to overall environmental impacts and as such, the use of unbleached paper products is preferable, especially in packaging. Modern pollution abatement techniques are necessary and need to be adhered to in order to reduce impacts. Modern technologies can also reduce energy use and increase recycling of production materials within the operations. Reducing paper use and increasing paper recycling are very important measures to reduce the overall impacts of pulp and paper production.

8.2 Brazil pulp and paper case study

Overview

8.2.1 Brazil is by far the largest and most populous country in South America, with a land base of 8,456,510 sq km and a population of over 188 million people. Brazil established a civilian democracy in 1985 and has actively pursued industrial and agricultural growth, exploiting vast natural resources and a large labor pool to become South America's leading economic power and a regional leader. Although it has made great strides, highly unequal income distribution and rapid deforestation remain pressing problemscxlix.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. 8.2.2 Tropical forests cover 57% of Brazil, for a total area of 4,776,980km2. Of

the total forested area, 87% (4,158,900km2) remains in a primary state, 12% (564,240km2) is in a semi-natural state, and slightly more than 1% (53,840km2) is contained in plantations. The rate of deforestation in Brazil over the period 1990-2005 was 8.14%, which represented a loss of 423,290km2 of forest cover.

8.2.3 Forest products are a significant component of the Brazilian economy and are important export commodities. In 2004, forest products exports of wood, pulp and waste paper, paper and paper board, and wood manufactures (not including furniture) totaled $$5,305,675,953 and accounted for 6% of all of Brazil’s exports, and 1.4% of its GDPcl.

Pulp and Paper Production

8.2.4 The pulp and paper industry in Brazil is enormous and growing quickly. Brazil’s is the world largest producer of bleached hardwood pulp. Figure 22 below shows Brazil’s position compared to other bleached hardwood pulp producers in 1990 and 2005.

Figure 22: Top Bleached Hardwood Producing Countries, BRACELPAcli.

8.2.5 Brazil continues to add pulp production capacity at a faster rate than any other country. Figure 23 shows the rate of growth of Brazilian bleached hardwood pulp production over the last five decades.

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Bleached Hardwood

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Figure 23: Growth of Bleached Hardwood Production, BRACELPAclii.

8.2.6 The primary input into Brazilian pulp and paper is eucalyptus, although pine is also used to a lesser degree. All of this wood is grown on plantations. Eucalyptus is a very rapid growing species that can be harvested in cycles of about seven years. During a twenty year period from 1967 to 1986, the Brazilian government allowed companies to invest up to 50% of their income tax in plantationscliii. Today about 70% of the plantations are privately owned. The huge supply of eucalyptus and pine that they are producing is making possible the rapid growth of the overall industry through construction of modern pulp and paper millscliv.

8.2.7 Pine plantations support a large lumber sector, and exports of softwood lumber (mainly pine) have increased significantly. In 1994, Brazil became the main softwood lumber supplier of the US after Canadaclv.

Market Structure and Production

8.2.8 As in other countries, the Brazilian pulp and paper industry is characterised by high barriers to entry in the form of very large fixed costs for building modern facilities. As such there is a high degree of integration between plantations and pulp and paper manufacturing.

8.2.9 Pulp and paper companies in Brazil supplying domestic and international markets. A steady supply of inexpensive raw material, cheap labor and modern pulp and paper mills, make Brazil the world’s lowest cost and highest profit pulp manufacturerclvi. In the global market, Brazil is now 11th in production of paper and 7th for pulp (considering all pulp and paper products). Many analysts see this as still underachieving potential as Brazil has 16% of the world’s forest, and only produces 2 to 4% of total world’s productionclvii.

8.2.10 The Brazilian Pulp and Paper Association indicates that there are 220 companies in the Brazilian pulp and paper sectorclviii. Most of the production capacity is consolidated within a few large companies. Due to the enormous capital investment, time and innovation in planting technology

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and science, small scale and indigenous businesses are not players in this sector. Major producers include: Aracruz Celulose, Norske Skog South America and Celulose Nipo Brasileira (Cenibra).

8.2.11 Brazil’s eucalyptus pulp produces excellent tissue products that are characterised by their softness. As such, most of Brazil’s bleached hardwood pulp is sold to global tissue producing millsclix. Most of Brazil’s pulp and paper trade occurs through large trading houses in Japan, Scandinavia and the US.

Regulatory Structure

8.2.12 Brazil’s Constitution (1988) recognised that citizens have a legitimate right to a clean and healthy environment. It provided a role for public action in protecting the environment by granting more autonomy to states and localities. A Secretary for the Environment (SENAM) was created to serve as a central agency which set standards and institute licensing requirements for polluting activities. The Institute of the Environment and Natural Renewable Resources (IBAMA) is under SENAM’s authority, and houses the Brazilian Forest Development Institute and the Special Environment Bureau.clx.

8.2.13 The federal government controls the regulatory process, standard setting and budgetary allocations. The states are responsible for water pollution control and the municipalities are responsible for solid waste management. The federal government sets minimum standards but state can pass supplementary laws on industrial pollution control, soil and natural resource protection, forestry, hunting, fishing, fauna and conservationclxi.

Trade statistics

8.2.14 Figure 24 below illustrates Brazil’s major export trade relationships in pulp and paper products.

$-

$100,000,000

$200,000,000

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Brazil Exports of Paper and Paperboa

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Figure 24: Pulp and paper trade statistics for Brazil

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Environmental Issues

8.2.15 The most significant environmental issues associated with pulp and paper production in Brazil relate to water and air emissions from manufacturing facilities and water use and chemical inputs in plantations.

Pollution

8.2.16 Water and air pollution are significant environmental impacts associated with pulp and paper mills as described in the body of this report. Although much of Brazil’s production capacity comes from modern mills, there are nonetheless non trivial discharges of toxins and greenhouse gases from these operations. The extent to which Brazilian mills are utilising modern pollution abatement technologies and complying with environmental regulations and emissions permits was difficult to determine in this brief investigation. The potential impacts of non-compliance are considerable. In Chile, a mill that was constructed in 2004 pumped pulp waste water into a globally significant wetland, killing the local aquatic vegetation and leading to the deaths of over 5000 black necked swans and other birds. The mills waste treatment facility dumped dioxin contaminated filter ashes and other potentially toxic waste in an open air site where the wind could disperse them. Such instances raise the question of the stringency of enforcement of regulations in Brazil.

8.2.17 A 1996 World Bankclxii report concluded that although the Constitution required environmental master plans for all municipalities over 20,000, they had not been consistently carried out. In general, while Brazil’s regulations and standards compared to the developed world, enforcement was lax due to shortfalls in funding, personnel and political backing.

8.2.18 Decentraliation of environmental responsibilities had provided state governments the autonomy to tailor standards or economic instruments beyond federal mandates. This produced environmental standards and policy instruments that varied across regions according to social and economic preferences. Consequently, although the federal government defined minimum water quality standards, they were often not enforced since states had other objectives competing with federal mandates, such as creating jobs and cultivating a tax revenue base. One World Bank report noted that state government "face a tradeoff between revenue and environmental quality. the better a state’s enforcement of federal requirements, the less polluted the state is but the lower is the state net revenue. Net revenue is lower because output is cut, at least in the short run as capital has to be diverted from production to pollution control. But net revenue is also lower because monitoring is costly and currently only yields trivial penalty returns. This sort of reasoning may explain why the degree of enforcement of pollution laws is often negotiated between polluter and state "clxiii

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Deforestation and habitat degradation

8.2.19 Industry sources claim that Brazilian eucalyptus and pine plantations have mostly been established on land that was formerly used for agriculture or pasture land and on some native grassland. Further research is needed to determine the validity of this claim, or if deforestation of primary forests is occurring to support new plantations. The Brazilian Pulp and Paper Association implies that plantation forests produce the equivalent (and therefore have preserved) 2.6 million hectares or primary forestclxiv.

Water use and chemical inputs

8.2.20 Eucalyptus plantations have been very successful at producing large volumes of pulp wood in short intervals. However, the rapid growth of eucalyptus requires a large amount of water. Some studies suggest that eucalyptus uses more water than any other tree species, which poses potential problems for local water tables depending on the location of the plantationclxv. Other environmental concerns related to heavy chemical and fertiliser use in plantations.

Social and Economic Issues

8.2.21 The main social impacts related to pulp and paper manufacturing include displacement of local and indigenous people to establish tree plantations, unrealised potential economic benefits for local people, and health risks from water and air emissions.

8.2.22 While most international pulp and paper companies have well developed corporate social responsibility policies, most of the smaller players in the industry do not. As such, there is still considerable displacement of indigenous groups from traditional lands without adequate consultation or compensation.

8.2.23 The Brazilian Pulp and Paper Industry Association claims that the industry directly employed 108,000 people in 2005. While this figure could not be confirmed it is likely to be an overestimate. Previous assertions of widespread jobs resulting from the opening of pulp and paper facilities have not consistently materialisedclxvi.

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Development of the Evidence Base: Sustainable Commodities Final Report Case Study – Coniferous Lumber, pulp and paper. Wade, Dale. D. (1988). A Guide For Prescribed Fire in Southern Forests, USDA Forest Service, http://www.pfmt.org/standman/prescrib.htm. Wikipedia, (On line encyclopedia), Wood Pulp http://en.wikipedia.org/wiki/Wood_pulp. World Business Council for Sustainable Development (WBCSD) (1996). Towards a Sustainable Paper Cycle [on-line executive summary]. http://www.poptel.org.uk/iied/eep/pubs/execsumm/wbcsd0004.html. World Forest Institute (2006). The Forests of Brazil, [on-line information page]. http://wfi.worldforestry.org/WF-braz.htm. World Resources Institute (2006). Forests, Grasslands and Drylands – Latvia. Earth Trends Environmental Information: Country Profiles [on-line]. http://earthtrends.wri.org/pdf_library/country_profiles/for_cou_428.pdf World Resources Institute (2006) Energy and Resources – Resource Consumption: Paper and paperboard consumption per capita [on-line data base]. http://earthtrends.wri.org/text/energy-resources/variable-573.html. World Resources Institute (2006). Biodiversity and Protected Areas - Latvia. Earth Trends Environmental Information: Country Profiles [on-line]. http://earthtrends.wri.org/pdf_library/country_profiles/bio_cou_428.pdf. WWF (2005). The Effects of FSC Certification in Estonia, Germany, Latvia, Russia, Sweden and the UK. [on-line summary report]. http://www.panda.org/about_wwf/where_we_work/europe/where/latvia/news/index.cfm?uNewsID=18510.

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10 Search Terms (Google Search Engine) environmental impacts of forestry forest road construction impacts deforestation and stream deforestation and salmon reforestation and co2 old growth and co2 soil respiration aboriginal social impacts of forestry Canada social impacts of forestry land ownership and forests softwood harvesting techniques softwood economic adjustment softwood tree cutting lumber mill environmental impacts environmental impact saw mill environmental impact lumber production soil erosion reforestation burn before planting forest companies Latvia Latvia environment forest Latvia environment issues Economic analysis forest sector Latvia Cost of large lumber mill Lumber market Forest law enforcement Forest governance and trade Lumber shipping Lumber transport impacts forest certification in Estonia Estonia forest management employment forestry Estonia Estonia forestry problems Estonia forest environment Estonia wto logging companies in Estonia pulp and paper pulp production methods pulp life cycle analysis paper life cycle pulping methods environment pulp environment paper impacts of pulp production impacts of paper production social impacts of pulp and paper social impacts of forestry brazil impacts of pulp and paper Brazil environmental impacts of pulp and paper Brazil pulp and paper process Eucalyptus plantation impacts Eucalyptus plantation environment Brazilian forest cover

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End notes i http://www.paper.org.uk/info/pdfs/Paper_and_the_Forest.pdf ii http://www.pppc.org/en/2_0/2_1.html iii http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf iv http://en.wikipedia.org/wiki/Wood_pulp v http://www.canfor.com/treeschool/library/files/pulp.asp vi Ibid. vii Ibid. viii Ibid. ix http://www.paper.org.uk/info/pdfs/Paper_and_the_Forest.pdf x http://www.paper.org.uk/info/pdfs/Paper_and_the_Forest.pdf xi http://earthtrends.wri.org/text/energy-resources/variable-573.html xii Silviculture Treatments, USDA Forest Service, North Carolina Research Centre http://ncrs.fs.fed.us/fmg/nfmg/fm101/silv/p2_treatment.html xiii http://www.epa.gov/nrmrl/pubs/625r02006/625R02006chap2.pdf xiv http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html xv http://www.canfor.com/treeschool/library/files/pulp.asp xvi http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html xvii http://www.canfor.com/treeschool/library/files/pulp.asp xviii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xix Ibid. xx http://www.epa.gov/ost/pulppaper/jd/fs2.pdf xxi http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxii http://www.cleantechindia.com/eicimage/210602_32/pulp.html xxiii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxiv http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxv http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxvi http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxvii http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xxviii LCA Graphic Paper and Print Product – Canfor etc. xxix LCA Graphic Paper and Print Product – Canfor etc. xxx http://www.epa.gov/nrmrl/pubs/625r02006/625R02006chap2.pdf xxxi http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xxxii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxxiii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxxiv http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xxxv http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxxvi http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xxxvii http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xxxviii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xxxix http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xl http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xli http://www.poptel.org.uk/iied/eep/pubs/execsumm/wbcsd0004.html xlii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xliii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xliv http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. xlv http://www.poptel.org.uk/iied/eep/pubs/execsumm/wbcsd0004.html xlvi http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xlvii http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xlviii http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf xlix http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf l http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. li http://www.poptel.org.uk/iied/eep/pubs/execsumm/wbcsd0004.html lii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. liii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. liv http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. lv http://www.poptel.org.uk/iied/eep/pubs/execsumm/wbcsd0004.html lvi A Guide For Prescribed Fire in Southern Forests http://www.pfmt.org/standman/prescrib.htm lvii ibid lviii US National Parks Service, Yellowstone National Park http://forestry.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=forestry&zu=http%3A%2F%2Fwww.nps.gov%2Fyell%2Ftechnical%2Ffire%2Findex.htm

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lix Prescribed Fire: Controlling a Burn for Ecological Benefits http://forestry.about.com/cs/forestfire/a/prescribe_burn.htm lx Forestry Herbicide Environmental Risks--An EIS Perspective http://www.treesearch.fs.fed.us/pubs/5193 lxi Hillslope Runoff and Soil Erosion Following Reforestation in the Copper Basin, Tennessee, USA Authors: Harden C.P.1; Mathews L.E.2 http://www.ingentaconnect.com/content/bpl/ages/2002/00000040/00000002/art00169;jsessionid=trwm3vxgjxdp.alice lxii Ibid. lxiii http://www.atl.cfs.nrcan.gc.ca/index-e/what-e/science-e/climatechange-e/soilrespiration-e.html Canadian Forest Service, Soil respiration contribution to ecosystem carbon dynamics and its role in ecosystem response to global change M.B. Lavigne, R. Foster, G. Goodine, R. Boutin, G. Robitaill CFS - Fredericton, CFS - Ste-Foy lxiv http://research.eeescience.utoledo.edu/lees/pubs/Pawu04.pdf Carbon Dioxide Exchange Between an Old-growth Forest and the Atmosphere lxv Interview with Michael Bradley, Canfor, July 17th, 2006. lxvi Heaton, Kate, Mitigating Environmental and Social Impacts of Intensive Plantation Forestry. lxvii LIFE-CYCLE IMPACTS OF FOREST RESOURCE ACTIVITIES IN THE PACIFIC NORTHWEST AND SOUTHEAST UNITED STATES lxviii Effects of log dumping and rafting on marine environment of Southeast Alaska. Bruce C. Pease lxix Interview with Michael Bradley, Canfor, July 17th, 2006. lxx http://www.dfid.gov.uk/eupresidency2005/flegt.asp lxxi Gate to Gate Lifecycle Inventory of Softwood Lumber Production, Wood and Fibre Science, 2005 lxxii Gate to Gate Lifecycle Inventory of Softwood Lumber Production, Wood and Fibre Science, 2005 lxxiii Gate to Gate Lifecycle Inventory of Softwood Lumber Production, Wood and Fibre Science, 2005 lxxiv Interview with Michael Bradley, Canfor, July 17th, 2006. lxxv Norström, Daniel and Gustafsson, Kristin (2005) Latvian logging companies. Dept. of Forest Products and Markets, SLU. Examensarbeten / SLU, Institutionen för skogens produkter och marknader vol. 44. http://ex-epsilon.slu.se/archive/00000460/ lxxvi http://earthtrends.wri.org/pdf_library/country_profiles/for_cou_428.pdf lxxvii http://www.unece.org/trade/timber/mis/market/market58/latvia.pdf lxxviii http://www.vmd.gov.lv/?sadala=74 lxxix Latvia. State Forest Service. 2004. What does the Latvian forest owner look like? http://www.vmd.gov.lv/eng/2/24/246/faq_01.htm. lxxx http://www.ifor.ca/docs/Ch5CEE.716.pdf lxxxi http://www.vmd.gov.lv/?sadala=241 lxxxii http://www.unece.org/trade/timber/mis/market/market58/latvia.pdf lxxxiii http://www.unece.org/trade/timber/mis/market/market58/latvia.pdf lxxxiv http://ex-epsilon.slu.se/archive/00000460/ lxxxv http://ex-epsilon.slu.se/archive/00000460/ lxxxvi http://www.vmd.gov.lv/eng/2/24/246/faq_01.htm. lxxxvii Global Environmental Forest Policies: Canada as a Constant Case Comparison of Select Forest Practice Regulations http://www.ifor.ca/docs/Ch5CEE.716.pdf lxxxviii http://ex-epsilon.slu.se/archive/00000460/ lxxxix http://ex-epsilon.slu.se/archive/00000460/ xc UN Comtrade data xci UN Comtrade data xcii http://rainforests.mongabay.com/deforestation/2000/Latvia.htm xciii http://www.vmd.gov.lv/eng/2/24/246/faq_01.htm. xciv “Law on Protected Belts” (05.02.1997 with amendments of law in 2001, 2003) and Regulations of the Cabinet of Ministers No. 284 "Methodology for the Designation of the Protected Belts for Water bodies and Water courses” (04.08.1998.). The “Law on Protected Belts” (Article 7, 35 and 37) defines riparian (“surface water objects”) buffers (“protected belts”) widths and management restrictions. xcv Cabinet of Ministers Regulations No 152 from 09.04.2002: Tree cutting regulations on forestland. xcvi Decision made by the Cabinet of Ministers as mandated in the Nature Protection Regulations in Forest Management (No 189/05.05.2001). xcvii On Protection of Species and Habitats (16.03.2000), On the List of Specially Protected Species and Species with Exploitation Limits (No 396/ 14.11.2000) and On the List of Specially Protected Habitats (No 421/12.05.2000) xcviii http://www.ifor.ca/docs/Ch5CEE.716.pdf xcix http://www.ifor.ca/docs/Ch5CEE.716.pdf c http://www.ifor.ca/docs/Ch5CEE.716.pdf ci http://www.fao.org/DOCREP/004/X4009E/X4009E10.htm cii http://www.fao.org/DOCREP/004/X4009E/X4009E10.htm ciii http://www.fao.org/DOCREP/003/X6823E/X6823E07.htm civ http://ex-epsilon.slu.se/archive/00000460/ cv http://ex-epsilon.slu.se/archive/00000460/ cvi http://ex-epsilon.slu.se/archive/00000460/ cvii http://ex-epsilon.slu.se/archive/00000460/

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cviii Baltic Environmental Forum 2000, and http://www.yale.edu/forestcertification/symposium/pdfs/latvia_symposium.pdf cix http://ex-epsilon.slu.se/archive/00000460/ cx http://www.vmd.gov.lv/?sadala=241 cxi http://www.ifor.ca/docs/Ch5CEE.716.pdf cxii http://www.fao.org/DOCREP/004/X4009E/X4009E10.htm cxiii http://www.fao.org/DOCREP/004/X4009E/X4009E10.htm cxiv http://www.fao.org/DOCREP/004/X4009E/X4009E10.htm cxv http://www.ifor.ca/docs/Ch5CEE.716.pdf cxvi http://www.ifor.ca/docs/Ch5CEE.716.pdf cxvii http://earthtrends.wri.org/pdf_library/country_profiles/bio_cou_428.pdf cxviii http://noltfox.metla.fi/pdf/Estonia.pdf cxix http://noltfox.metla.fi/pdf/Estonia.pdf cxx http://noltfox.metla.fi/pdf/Estonia.pdf cxxi http://ex-epsilon.slu.se/archive/00000587/ Andersson, Linus and Kumm, Erik (2005) Estonian logging companies. Dept. of Forest Products and Markets, SLU. Examensarbeten / SLU, Institutionen för skogens produkter och marknader vol. 48. cxxii http://noltfox.metla.fi/pdf/Estonia.pdf cxxiii http://www.rmk.ee/pages.php3/0201 cxxiv http://ex-epsilon.slu.se/archive/00000587/ cxxv http://noltfox.metla.fi/pdf/Estonia.pdf cxxvi http://enrin.grida.no/htmls/estonia/env2001/content/soe/biodiversity_4-3.htm#4.3.3.%20Forest%20management cxxvii http://earthtrends.wri.org/pdf_library/country_profiles/for_cou_428.pdf cxxviii http://enrin.grida.no/htmls/estonia/env2001/content/soe/biodiversity_4-3.htm#4.3.3.%20Forest%20management cxxix UN Comtrade database cxxx www.ernir.ee/66679 cxxxi Forests of Estonia, Jaan Parn Estonia Green Movement 2006 http://www.fern.org/media/documents/document_3667_3670.pdf cxxxii http://ex-epsilon.slu.se/archive/00000587/ cxxxiii Forests of Estonia, Jaan Parn Estonia Green Movement 2006 http://www.fern.org/media/documents/document_3667_3670.pdf cxxxiv http://enrin.grida.no/htmls/estonia/env2001/content/soe/biodiversity_4-3.htm#4.3.3.%20Forest%20management cxxxv Forests of Estonia, Jaan Parn Estonia Green Movement 2006 http://www.fern.org/media/documents/document_3667_3670.pdf cxxxvi Forests of Estonia, Jaan Parn Estonia Green Movement 2006 http://www.fern.org/media/documents/document_3667_3670.pdf cxxxvii http://ex-epsilon.slu.se/archive/00000587/ cxxxviii Forests of Estonia, Jaan Parn Estonia Green Movement 2006 http://www.fern.org/media/documents/document_3667_3670.pdf cxxxix http://www.panda.org/about_wwf/where_we_work/europe/where/latvia/news/index.cfm?uNewsID=18510 cxl Forests of Estonia, Jaan Parn Estonia Green Movement 2006 http://www.fern.org/media/documents/document_3667_3670.pdf cxli http://www.panda.org/about_wwf/where_we_work/europe/where/latvia/news/index.cfm?uNewsID=18510 cxlii http://www.unece.org/trade/timber/docs/rev-99/rev99.htm cxliii http://www.panda.org/about_wwf/where_we_work/europe/where/latvia/news/index.cfm?uNewsID=18510 cxliv http://ex-epsilon.slu.se/archive/00000587/ cxlv http://enrin.grida.no/htmls/estonia/env2001/content/soe/biodiversity_4-3.htm#4.3.3.%20Forest%20management cxlvi http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/gui_pulp_WB/$FILE/pulp_PPAH.pdf cxlvii http://www.foe.co.uk/resource/briefings/consequence_pulp_paper.html. cxlviii http://www.poptel.org.uk/iied/eep/pubs/execsumm/wbcsd0004.html cxlix https://www.cia.gov/cia/publications/factbook/geos/br.html cl http://www.bracelpa.org.br/en/anual/perfil2006.pdf cli BRACELPA. (2004) Total Reforested, http://www.bracelpa.org.br/en/numeros/reflorestamento/02-ano.pdf clii BRACELPA. (2004) Total Reforested, http://www.bracelpa.org.br/en/numeros/reflorestamento/02-ano.pdf cliii http://wfi.worldforestry.org/WF-braz.htm cliv World Forest Institute (2006) The Forests of Brazil, web information, http://wfi.worldforestry.org/WF-braz.htmclv http://wfi.worldforestry.org/WF-braz.htm clvi Interview, Kerry Sear, Pulp and Paper trader. (June 2006) clvii Fujihara, M.A. (2005) Brazils’ Pulp and Paper Industry, Paper for PriceWaterhouse Coopers (PWC). http://www.pwc.com/gx/eng/about/ind/forest/brazil_pulp-and-paper.pdfclviii http://www.bracelpa.org.br/en/anual/perfil2006.pdf clix Interview, Kerry Sear, Pulp and Paper trader. (June 2006) clx http://siteresources.worldbank.org/NIPRINT/Resources/BrazilsPollutionRegulatoryStructureandBackground.pdf clxi http://siteresources.worldbank.org/NIPRINT/Resources/BrazilsPollutionRegulatoryStructureandBackground.pdf clxii http://siteresources.worldbank.org/NIPRINT/Resources/BrazilsPollutionRegulatoryStructureandBackground.pdf clxiii http://siteresources.worldbank.org/NIPRINT/Resources/BrazilsPollutionRegulatoryStructureandBackground.pdf clxiv http://www.bracelpa.org.br/en/anual/perfil2006.pdf clxv http://bioenergy.ornl.gov/reports/euc-braz/eucaly2.html clxvi http://www.swedwatch.org/swedwatch/content/download/157/721/file/Rapport%

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