Forestry industry banks on bio-age

April 14, 2010   by Noelle Stapinsky, Features Editor

Companies can convert wood fibre from forest waste into bio-chemicals and alternative fuels.

Photo: iStockphoto

The economy may be on the mend, but Canada’s battered forest industry continues to struggle. The recession didn’t help but forestry’s declining fortunes were well underway before the economy tanked last year. Demand for many forestry products is in decline while crippling pricing pressures from global competitors, particularly those in developing countries, are driving Canadian companies into bankruptcies, and plants are closing, resulting in mounting job losses (more than 90,000 since 2001).

The industry needs to find new ways to prosper and support its workforce of 270,000, and that “something new” may be bio-energy and biochemicals.

A year long-study—The Bio-pathways Project—was commissioned by the Forest Products Association of Canada (FPAC), which represents Canada’s wood, pulp and paper producers nationally and internationally. It revealed forestry companies could capitalize on the bio-age by integrating bio-energy production with existing operations.

“It’s really about the transformation of the sector,” says Catherine Cobden, FPAC’s vice-president of economics and regulatory affairs.

The study pulled together more than 60 industry experts, executives and governments to assess 27 traditional and emerging biochemical and bio-energy technologies on an economic, social and environmental level. And they discovered forestry companies need to look no further than their existing operations. By integrating biotechnology, forestry companies can convert biomass (wood fibre) for other uses while producing traditional products.

“There are some segments that are always going to be profitable. Lumber is the most obvious one,” says Cobden.

However, a lot of pulp and paper companies need to transform themselves and they have the most significant opportunities in the biochemical field. Their relationships with the sawmills will have to change, though.

“Pulp mills look at saw mills as providers. They have to become partners,” says Pierre Lapointe, president and CEO of Quebec-based FPInnovations, Canada’s largest forestry sector research organization and the provider of the potential technologies studied in the Bio-pathways Project.

Traditionally, saw mills would burn residual waste to generate energy. With an integrated bio system in place, Lapointe says they can produce hardwood, two by fours and other wood products while using the residual waste such as the tops of trees, bark and stumps as the feedstock for a bio product.

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