Case Studies

For China-Canada Cooperation Project In Cleaner Production (CP)

The pulp and paper industry was a natural choice as the first industry sector to be considered for the development of national industrial water pollution control standards. It represented, on an aggregated basis, the largest source of organic water pollution from industrial sources. Individual plants in many cases represented significantly larger sources of organic pollution burden to the nation’s watercourses than many middle sized urban communities. It was also an industry that was a significant contributor to the GNP, and most of its production was exported. It was both a major employer and major foreign currency earner.

Many of the pulp mills, particularly in Eastern Canada, were very old, some of them approaching one hundred years of age. In Western Canada, pulp mills tended to be larger and of newer vintage. Almost all mills would have been considered large by Chinese standards. Pulp mill size ranged from several hundred tonnes per day to more than a thousand tonnes per day. The larger mills tended to be mills using the Kraft pulping process and the smaller mills tended to be sulfite mills, or groundwood mills making pulp largely for fine papers and the newsprint industry.

Initial attempts at making industrial pollution standards relied heavily on information published in the international literature. Not surprisingly Canadian environmental rule-making was heavily influenced by what was happening in the United States. Canada is the United States largest trading partner, as well as the obverse being true. Many of the early Canadian environmental specialists got their environmental training in the United States. At the time Canada began to examine options for industrial pollution control regulations for the pulp and paper industry the US Federal Water Pollution Control Administration (forerunner to the US EPA) had just published what appeared to be an exhaustive examination of the US pulp and paper industry, and proposals for that industry’s regulation. The options being considered were almost exclusively end-of-pipe solutions. Higher levels of environmental control required secondary treatment, and higher still levels of control demanded tertiary levels of treatment. The first draft of the Canadian standards under the Fisheries Act borrowed heavily from these draft regulations in the United States.

Had the drafters had more knowledge of the industry, the reaction from the Canadian pulp and paper industry would have been better anticipated. Several important lessons were learned that shaped environmental policy for subsequent rule-making for other industrial sectors. The first lesson learned was that most of the knowledge related to solving industries environmental problems rests with industry. It was necessary to develop a staff in the Environment Department that was knowledgeable of this industrial experience. This was important if the Environment ministry was going to have an effective dialogue with technical specialists from industry, but essential if they were going to work together to forge workable rules that would both benefit the environment and contribute to an efficient, productive industry.

The pulp and paper industry (through the Canadian Pulp and Paper Association) proposed that a joint industry/government expert group should visit (together) governments and pulp and paper companies in Scandinavia. There suggestion was accepted and a group led jointly by the Canadian Pulp and Paper Association, the author and a colleague from the Forestry Service in the Department of the Environment spent several weeks in Sweden, Finland and Norway. The team included representatives from the Federal Government, representatives from several provincial agencies, and technical experts from a number of Canadian pulp and paper mills.

At this time the Swedish pulp and paper industry was going through a rationalization driven by the high costs of energy and the dwindling supplies of wood fibre. The rationalization program was resulting in industry consolidation (to better locate operations closer to reliable wood supplies), and the institution of energy conservation measures, and measures to make better use of the available wood fibre. Environmental controls in Sweden were emphasizing in-plant changes that effected energy savings, fibre-loss control and chemical recovery – all contributing greatly to the reduction of pollution load, but also contributing to the profitability of industry. External (end-of-the-pipe treatment) was only included in the requirements of the Swedish Environmental Protection Board if the in-plant measures did not achieve the level of clean-up necessary to improve environmental conditions to an acceptable level of quality. In today’s terminology we would have described what they were doing as applying "Cleaner Production".

The mills visited in Norway and in Finland were practicing many of the measures we observed in Sweden, and driven by the same factors (the need to reduce energy costs, and the need to use fibre more efficiently).

The Canadian team returned to Canada with a new perspective on what was important in the writing of environmental regulations. From that time forward regulatory initiatives in the first instance considered process modification as the primary strategy for achieving environmental control. The legal authority under which the federal regulations were being developed did not allow the federal government to specify processes, or the internal operations of a plant, but the regulations subsequently developed were most certainly "technology based" and with a full understanding of what role in-plant options could achieve. Starting with the pulp and paper industry, industrial pollution standards under the Fisheries Act were written on the basis of permitting so many units of pollution per unit of production. The regulations did include a requirement that the effluent be non-toxic to fish, by incorporating an acute lethality provision as a test requirement. The regulations did not permit dilution as a means of achieving environmental objectives, and concentration type effluent limitations were avoided for this very reason. The regulations did not tell industry what technologies it must use, or what in-plant measures must be instituted. This was a very important issue of public policy. In the first instance the Federal Government did not have the authority to establish such requirements, but more importantly, leaving the technical choices to industry allowed them to make the most efficient choices.

An additional element of legislative authority that was used effectively was a provision in the Fisheries Act that allowed the Minister of Fisheries to request plans and specifications of new projects so that the Minister (through officials) could ascertain whether or not the project was likely to result in the release of a deleterious substance harmful to the fisheries resource. In applying the policy all new pulp and paper mills were required to meet the effluent requirements at the time they started operations, and their plans were checked by government technical specialists. Existing mills were expected to bring their operation into compliance with the regulatory expectations over a reasonable period of time. Any mill that contemplated a process change, or undertook a significant expansion was subject to the regulatory requirements at the time those changes were made. Again the plans were checked by technical experts of government – but again, it was the decision of industry as to what technologies they deployed and how they would attain the regulatory requirements. Government officials might ask to be given assurances that the regulatory limits would be attained but did not specify technologies or solutions.

This intervention by government at an early stage in project development pre-dated the Government’s commitment to environmental impact assessment by several years. Examination of the plans for new developments became an operational requirement in 1969 and the Cabinet Decision establishing the federal environmental impact assessment policy was taken in 1973. Over time the examination of project plans and specifications under the Fisheries Act became integrated into the environmental assessment procedures being applied by regulatory authorities as they implemented the requirements of the Government policy. In 1995, with the proclamation of the Canadian Environmental Assessment Act, these requirements became a part of the responsibility under CEAA. It was and has been a very important component of pollution prevention in Canada.

The pulp and paper regulations of 1971 ultimately embraced two distinct strategies, one for dealing with new investment, or investment in expansion or significant process change; and the other for existing industry. The regulations in effect required new investment to apply up-to-date, efficient, clean technologies. We did not call it "cleaner production" technologies at the time but rather applied the term "best practicable technologies". But in effect the regulations were requiring the use of technologies that were more resource efficient, thereby reducing the generation of wastes and pollution load.

At the time of issuance of the regulations it was stated that, "It is recognized that the national baselines for effluents represent minimums of control. More stringent effluent controls might well be required based on particular receiving water conditions. In such cases, special effluent requirements can be tailored to each individual situation based on local or regional requirements." It was further stated that "It should be emphasized that the national baseline limitations are based on practicable recycling and recovery technology, and not on the environmental quality objectives of the receiving water. They are expressed in terms of permissible limits of substances in units of quantity per unit of production and not on concentrations. The release went on to state "The principle thrust of our regulatory program will be to minimize pollution. No new plant will be constructed which will not control pollution to the highest degree practicable. Existing industries will be pressed to clean up, with emphasis being placed on water re-use, up-grading of plant housekeeping, and where appropriate full conversion of processes to ones which are less polluting. Less emphasis will be placed on external hardware which is capable of reducing pollution loads, but rather the emphasis will be to reduce and/or eliminate pollutants at their source."

It was further stated, "it is recognized that our new pollution control regulations are placing an additional burden on old industries. We are imposing new constraints, new production costs if you will, on plants built when society had a different set of values, and industry naturally built to the rules of the time. We will have to have patience in cleaning up our old plants – it will take time – it is always more costly to build pollution control measures into existing systems than it is to build from scratch.

Existing industry was also given targets for control in the regulations, but the date of application was left open, to allow for plant by plant negotiated compliance schedules, and the allowance of pollutants to units of production was somewhat more generous, in recognition of the greater challenge of retrofit situations. The objectives remained the same to get industry to waste less and thereby reduce pollution load.

When the regulations were enacted in 1971, the pulp and paper industry was and still is one of the important industrial sectors within the Canadian economy. In 1971 it contributed about 3% of the GNP, resulted in sales of about $ 3 billion (in 1971 Canadian dollars), employed about 74,000 people directly in the production operations and another 100,000 in woods operations. [Almost all pulp and paper produced in Canada is derived from wood resources, or recycled paper which originally was derived from wood resources.]

There were in the order of 150 mills using a variety of technologies.

In Eastern Canada the production was generally older and in need of modernization. Rationalization of access to wood resources was also a matter of some considerable concern to some operations. It was in Eastern Canada where the older sulfite and mechanical pulping mills supporting the newsprint industry were concentrated.

In Western Canada the industry was generally newer, mills were larger, and using technology that was more efficient in the use of wood resources, and more conducive to chemical recovery systems. Indeed what was important about chemical recovery was that it was an essential feature of this newer mill technology keeping operating costs lower, and the mills more competitive. The shift from sulfite technology in eastern mills to Kraft technology with chemical recovery in western mills was not driven by environmental requirements, but a reflection of the interest of industry in building new capacity that was more efficient, and also by the fact that the nature of the wood available to western mills made the Kraft technology, the technology of choice.

To say that clean-up proceeded slowly with existing capacity would be an understatement. [In a parallel industrial pollution control initiative with the petroleum refining industry that industry committed to having requirements in place with "existing" refineries within five years, and met that commitment.] With the pulp and paper industry the plant by plant, negotiated compliance programme proceeded at a "snails pace". The early 70s saw pulp and newsprint prices to be at historic lows. Canada had lost its position of price-setter to the more efficient, lower cost mills in the Southern US. Profits before, and after taxes fell, and there were adverse trends in profits, dividends, retained earnings and research and development expenditures. The effects of global over capacity, and reduced demand was felt especially by Eastern Canadian mills. It was clear that there had to be some rationalization and modernization if the Canadian industry was going to remain globally competitive. Industry was disinclined to commit scarce capital to pulp mill clean-up.

Recognizing this, and still insisting that the over-riding "polluters pay" principle remain in effect, the Government looked for new strategies to move their environmental agenda ahead. The opportunity presented itself through a programme aimed at regional economic stimulation. In several regions of the country economic activity lagged the rest of the nation and the Government had instituted assistance programmes aimed at the stimulation and creation of new jobs in these economically depressed areas. It was argued that a job saved was equivalent to a new job created, and the opportunity to use these economic stimulation funds to assist in the modernization and rationalization of the pulp and paper sector was initiated. The programme ran only for a few years and was concentrated in Eastern Canada. The western component of the industry complained to government that it should stay out of programmes aimed at modernizing or rationalizing industry, leaving that to the private sector alone, as they argued that government assistance of less competitive components of the industry was distorting, and that if government insisted on being involved, to be fair that the same level of assistance to all should be afforded including retroactive payments to mills that had modernized without government assistance.

During the short life of the program industry modernization/expansion programmes were reviewed by a federal/provincial committee of specialists before the release of any government funds to the project. Included on the committee was an expert from the Department of the Environment to ensure that any opportunities for energy conservation and pollution reduction were included in the modernization plans. Generally the plans submitted were for process changes which made more efficient use of raw materials and hence were less polluting. Indeed the industry’s message to government at the time the regulations were being drafted in the early 1970s, not to require chemical recovery at old sulfite mills, but to allow industry to consider alternative process technologies which would be more cost effective to the mill was borne out in this industry modernization programme where many mills opted for TCMP processes (thermal/chemical/mechanical combinations) which allowed for industry to produce pulp more cheaply and utilize a higher proportion of the fibre from their wood supply. This was effectively the adoption of "cleaner production" technology – not for environmental reasons, but for business reasons.

The regulations enacted in 1971 were being made obsolete by the introduction of new technologies. In fact the requirements for new mills had not anticipated the kinds of processes that industry was putting in place. Since the regulations permitted an allowable discharge of units of pollution per unit of production, and were linked to the wood processing technology, some of the newer technologies were not covered by the regulations. Experience had also shown that some refinement in the regulations was required. In addition it was determined that it was time to give a definitive date for all mills to meet regulatory requirements. Nearly 20 years had passed since the first national regulations had been promulgated. The strategy of requiring all new investment, or major expansions to meet regulatory requirements had been successful. All 17 new plants complied with the requirements, but the number of existing plants meeting the objectives set for existing plants was not as favourable. The revised regulations issued in late 1991 included provisions for the newer TCMP technologies, and also required full compliance by all existing mills (existing as of 1971) by December 31^st 1995. Most mills were expected to comply two years earlier. Also included in the regulations was an innovative requirement that industry undertake and report on environmental effects of their operations. This took reporting requirements beyond reporting on effluent loading, but also required industry to examine the condition of the receiving environment downstream from their facility to determine whether effluent controls were achieving the desirable level of protection.

Today the industry is in compliance. It prides itself that it has instituted sustainable practices both in its forestry operations and in its production facilities. It is a more competitive industry and better able to respond to the cycles in world demand and price for their product. It still constitutes a major contributor to GNP, and is Canada’s largest industrial employer. The industry (combined pulp and paper and forest industry) added 10,000 jobs in 1997 [22,700 jobs have been added since 1973]. These increases resulted in a total of 261,700 full-time equivalent direct jobs in 1997, including 65,000 employees of pulp and paper companies. There are 155 mills across Canada which are the principal source of employment in over 350 communities. A record $ 9.0 billion (in different forms of taxation) was paid to all levels of government in Canada by the Canadian forest industry. $15.7 billion in compensation and benefits were paid to its employees in 1995 with an average wage per employee of $47,000 in 1997.

Four out of every five tonnes of paper produced is exported. In 1996, pulp and paper net exports reached $17.7 billion. The percentage of exports from this sector of industry to total Canadian exports has ranged from 14 to 17 percent over the period 1993 to 1997.

The capacity of the industry has increased by almost 20% since the first pulp and paper regulations were enacted in the early 1970s and the reduction of pollution load as measured by BOD (Biochemical Oxygen Demand) and Suspended Solids has been reduced by almost 90% as can be seen from the following figure. An industry which has embraced cleaner production options is more efficient, more competitive, and is positioned to continue to participate profitably in global markets. It was driven there by the market place and allowed to make its technology choices by a regulatory regime that permitted those choices to be made.

Go to top

I. LIST OF DOCUMENTS OF THE CANADIAN NATIONAL ROUND TABLE ON THE ENVIRONMENT AND THE ECONOMY PROVIDED TO SETC

 

1. Trade Environment and Competitiveness, Edited by John Kirton and Sarah Richardson, (1992)

2. The Financial Services Industry and Sustainable Development: Managing Change, Information and Risk

3. Lender Liability for Contaminated Sites: Issues for Lenders and Investors

4. Market Correction: Economic Incentives for Sustainable Development

5. Environmental Regulations and the Canadian Pulp and Paper Industry: An examination of the Porter Strategy

6. Environmentally Perverse Government Incentives

7. Environmental Impact Assessment and Competitiveness

8. Emerging Trends and Issues in Canada’s Environmental Industry

9. Trade, Competitiveness and the Environment

10. Exploring Incentives: An Introduction to Incentives and Economic Instruments for Sustainable Development

11. Canadian Round Tables on the Environment and the Economy: Their History, Form and Function

12. Reporting on Sustainable Development in Support of National Decision Makers

13. Corporate Sustainable Development Reporting in Canada

14. A Renewed Framework for Government Accountability in the Area of Sustainable Development: Role for a Canadian Parliamentary Auditor/Commissioner for the Environment

15. Exploring Barriers to Sound Environmental Practices

16. Environmental Taxation, Revenues, and Effectiveness: the Need for Principled Guidance

17. Principles for the Sustainable Production of Pulp and Paper Products: A Report from the Pulp and Paper Round Table

II. DOCUMENTATION RELATED TO THE POLICY FRAMEWORK FOR CLEANER PRODUCTION FOR RETENTION IN PROJECT OFFICE

1. IT’S ABOUT OUR HEALTH! Towards Pollution Prevention/CEPA Revisited, Report of the House of Commons Standing Committee on Environment and Sustainable Development, June 1995

2. Pollution Prevention - A Federal Strategy for Action, Government of Canada, June 1995

3. Reviewing CEPA, The Issues #7 (Series of Background Papers produced by Environment Canada to facilitate a review of the Canadian Environmental Protection Act), Pollution Prevention.

4. Reviewing CEPA, The Issues #11 (Series of Background Papers produced by Environment Canada to facilitate a review of the Canadian Environmental Protection Act), Environmental Emergencies.

5. Reviewing CEPA, The Issues #9 (Series of Background Papers produced by Environment Canada to facilitate a review of the Canadian Environmental Protection Act), Community Right to Know.

6. Reviewing CEPA, The Issues #18 (Series of Background Papers produced by Environment Canada to facilitate a review of the Canadian Environmental Protection Act), CEPA and the Precautionary Principle/Approach.

7. Strengthening Environmental Protection in Canada: A Guide to the New Legislation, Government of Canada, 1996

8. CEPA Review: The Government Response, Environmental Protection Legislation Designed for the Future - A Renewed CEPA - A Proposal, (Response to the Recommendations of the Standing Committee on Environment and Sustainable Development outlined in its Fifth Report – It’s About our Health! Towards Pollution Prevention - CEPA Revisited), Government of Canada, 1995.

9. Toxic Substances Management Policy, Report on Public Consultations, Government of Canada, Environment Canada, June 1995.

10. EMS Self-Assessment Guide, Greening Government, Office of the Auditor General, Government of Canada, 1995

11. Life Cycle Management Approaches in Canadian Industry, SBYoung CONSULTING and Water Technology International Corporation, February 1997

12. Environmental Life Cycle Management - A Guide for Better Business Decisions, Environment Canada, 1997

13. Economic Instruments and Disincentives to Sound Environmental Practices, Final Report of the Task Force, November 1994, Government of Canada

14. A Strategy to Fulfil the CCME Commitment to Pollution Prevention, Canadian Council of Environment Ministers, May 1996.

15. A National Commitment to Pollution Prevention, Canadian Council of Environment Ministers, November 1993.

16. Environmental Leaders, ARET 2, Voluntary Action on Toxic Substances, Environment Canada, 1997

17. Environmental Progress Report, The Mining Association of Canada, November 1997.

18. Toward Waste Reduction and Pollution Prevention Through Internal Vision – Dow’s Approach, by Ken K Tsang, W. Peter Bieman, and Randolph M. Croyle, Dow Chemical of Canada Inc., Fort Saskatchewan, Alberta and Dow Environmental, Midland, Michigan, 1995.

19. Pollution Prevention Legislative Task Force - Final Report, Environment Canada, September 1993

20. Examining the Current and Proposed Potential of the Canadian Environmental Protection Act to Incorporate Pollution Prevention Principles and Strategies, by Hajo Versteeg, and Dr. Martin Boddington, Environment Canada, March 23, 1993

21. Proceedings of the AWMA Regulatory Reform Workshop, Voluntary Codes Project, Summary of the Symposium on Voluntary Codes: Held in Ottawa on September 12-13, 1996.

22. Voluntary Compliance Measures in Canada, North American Commission for Environmental Cooperation, March 1996

23. Environmental Code of Practice for the Reduction of Solvent Emissions from Commercial and Industrial Degreasing Facilities, CCME Management Plan Initiatives V309 and V614, Canadian Council of Environment Ministers, June 1995

24. New Source Performance Standards and Guidelines for the Reduction of Volatile Organic Compound Emissions from Canadian Automotive OEM Coating Facilities, CCME Management Plan Initiative V307, Canadian Council of Environment Ministers, August 1995.

25. Environmental Guideline for the Reduction of Volatile Organic Compound Emissions from the Plastics Processing Industry, CCME Management Plan Initiatives V305 and V610, Canadian Council of Environment Ministers, July 1997.

26. Cleaner Production Newsletter of the UNEP IE/PAC Network, No. 7. Fall 1993

III. OTHER MATERIAL RELEVANT TO THE CLEANER PRODUCTION PROJECT AND WBS 100

1. Overheads used by personnel from Environment Canada during briefings of First Study Tour, September 1997.

2. Pollution Prevention: the Key to an Integrated Environmental Protection Strategy

3. ISO Environmental Management Systems: A National and International View

4. Environmental Technologies in Action, Environmental Technology Advancement

5. Environmental Technology Verification (ETV Program) September 1997

6. CCME, Canadian Council of Ministers of the Environment, Success Stories: Pollution Prevention in Business - a video, 20:00 in PAL Format

7. Sino-Norwegian Cleaner Production Program, Beijing Municipal Training Center for Environmental Technology, China International Training Center for Sustainable Development, (Pal Format)

IV. DOCUMENTS REQUESTED DURING THE MISSION OF THE POLICY EXPERT TO CHINA, NOVEMBER 1997

1. Canadian Environmental Protection Act, R.S., 1985, c. 16 (4^th Supp.) July 1994

2. Enforcement and Compliance Policy, Canadian Environmental Protection Act, 1992

3. Canadian Environmental Protection Act Report to Parliament, for the Period April 1994 to March 1995

4. Canadian Environmental Protection Act Report to Parliament, for the Period April 1995 to March 1996

5. Documentation on the Provisions under the Income Tax Act (Government of Canada) related to the Accelerated Cost Allowance Program for Investment in Pollution Abatement Equipment

V. USEFUL WEBSITES FOR INFORMATION RELATED TO POLICY AND THE CLEANER PRODUCTION PROJECT

• The World Bank "environmental guidelines" now called "Pollution Prevention and Abatement Handbook" - "Toward Cleaner Production", is now accessible at Pollution Prevention and Abatement Handbook 1998

• The UNEP reports of the Industrial and Environment Office in Paris (authors of the document "Cleaner Production at Pulp and Paper Mills: A Guidance Manual") are available at a website address: http://www.unepie.org/home.html

• Canada’s Environmental Regulations are available at the Department of Justice Website http://canada.justice.gc.ca/index_en.html

• Environment Canada’s Publications and many of its Policies can be found at The Green Lane http://www.ec.gc.ca

• The project website is http://www.chinacp.com/eng.

Go to top

©NDRC 2000-2006