Review of MNRF …

Review of MNRF “Opportunities to Enhance Carbon Storage? A Discussion Paper”

Background

Ensyn Technologies Inc. has long been a successful producer of biofuel derived from sawmill and forest residues. Currently Ensyn operates a commercial facility in Renfrew, Ontario, where Ensyn’s patented fast pyrolysis technology produces heating oil for the US market, using Renfrew County sawdust as the raw material. We are currently undergoing major expansion with a plant being built in Port Cartier, Quebec, and plants in the engineering phase in Aracruz, Brazil and Vienna, Georgia. Ensyn’s patented RFO (Renewable Fuel Oil) has been approved for use in the United States for transportation fuels and refinery trials are underway. This product directly replaces fossil fuels for the transportation industry. Obviously Ensyn has a vested interest in climate change mitigation and adaptation policies. Any policies of the Ontario government that affect wood fibre costs from the Crown forest directly affects our ability to remain competitive in the rapidly-growing renewable fuels sector. Any incentive the Ontario government provides to advanced renewable fuel producers such as Ensyn would be a step forward. Ontario’s Climate Change Policies to Date

In light of the very limited mention that forestry received in Ontario’s Climate Change Strategy, it is a positive step forward to recognize the importance of forest carbon in a new document. It is very unfortunate that Ontario has chosen a straight cap and trade approach to GHG reduction. This program provides a very poor foundation for subsequent climate change mitigation activities. It does not promote a green economy; rather, it allows net emitters to continue what they are doing at a very low cost. The additional cost is simply passed on to the consumer, and no effort is made to innovate or develop new renewable technologies. Government revenue generated from cap and trade has been far less than anticipated, and the revenue isn’t being used to foster a green energy sector. Given that the highest contributor to GHGs is the transportation sector, it makes much more sense to introduce a low carbon fuel standard (LCFS). The LCFS has led to great advances in renewable fuel technology; it is in the emitters’ best interest and their legal obligation to increase the renewable content of their fuel. The volume obligations – increasing the renewable fuel content annually – forces the refinery industry to continually raise the bar. The forest industry in Ontario has been a provincial leader in dealing with energy inefficiencies and decreasing emissions for many years. The Discussion Paper does not clearly recognize that the forest industry has continually improved its performance; forestry’s “business as usual” has already set a very high standard. It may be difficult and costly for the industry to improve its performance much beyond this. Part D of the Discussion Paper

1.Ontario has the highest forest management standards in the world. It is critical that the Crown forest is recognized as already being a major contributor to GHG emission reductions and carbon sequestration.

2.Our concern with the goals and outcomes is that the Discussion Paper talks about “business as usual” as not being sufficient. We strive for continual improvement, but forestry’s “business as usual” in Ontario already sets a very high standard. Forest management is market driven; without a solid economic baseline, enhanced forest management is not affordable. Particularly, the utilization of low-end products and residues is essential to intensify forest management to achieve the best GHG reduction and carbon sequestration outcomes. To do this, Ontario must become a much more attractive place to do business. High energy rates, high per unit wood costs, and an onerous regulatory burden make Ontario unattractive to business.

3.

a.Forest carbon management is much more important than offsets. As stated in section 2, more intensive forest management will be driven by the ability to market low-end products. More intensive forest management results in increased carbon sequestration. While offset projects can be valuable, they tend to be cost prohibitive. An effective carbon management program will fund carbon offset projects. b.Ontario needs to further encourage the production of forest and sawmill derived energy. The conversion from coal to wood pellets in the Atikokan GS is the one of the few projects that has achieved this; however, importing Norwegian wood pellets to the Thunder Bay GS does nothing to grow Ontario’s green energy sector. Further, importing other “green” energy alternatives – such as foreign manufactured solar panels – is not helping Ontarians. c.Timeliness of implementing a forest carbon policy for Ontario is not critical without a firm commitment from the province to grow the green energy sector. The science is still developing – the jury is still out on what steps will actually be effective. d.Creating a business environment that encourages the development of a green energy industry is critical. At present, as stated above, we are not aware that Ontario is achieving much success attracting investment in renewable energy from forest biomass and residues. e.It is critical that MNRF fully engage rural and First Nation communities in any policy decisions contemplated regarding forest carbon. It is Ontario’s rural and northern communities that will bear the cost – economic and social – of decisions made in Queen’s Park. f.Any policy approach, to be successful, will require the buy-in of the stakeholders most affected by the policy. That would mean rural and northern communities, First Nations and the forest industry. Broad consultation is essential. And the province must be prepared to accept the recommendations of those it consults with. g.As above – it is critical that the most affected stakeholders be part of the process.

h.We don’t believe there will be unintended consequences of managing for forest carbon. As stated above, the goals are already being achieved through Ontario’s rigorous forest management regime. Very little change is required in how we manage forests.

4.Forest carbon policy will not achieve desired outcomes unless they are developed in an environment that is economically effective. Particularly, the inclusion of a LCFS into the climate change strategy will have a very positive effect.

5.The forest management planning process is extremely complex and expensive. Ontario’s world class forest management already achieves most climate change mitigation goals. Adding the burden of addressing forest carbon in the plan, other than superficially, is not going to benefit anyone. a.The challenges of balancing all forest objectives (particularly in light of Ontario’s onerous Endangered Species Act) is already a losing battle for industry and rural communities. To add complex forest carbon requirements, in the absence of solid science, is unwise and unnecessary. b.Managing for forest carbon is already part of our forest management, though it is not explicitly stated.

6.Government can create effective policies by making Ontario business-friendly. The forest sector already conducts extensive carbon offset projects – tree planting and tending, for example – as a normal course of business (business as usual). Policy that is developed in the absence of recognition of the real problems – high energy costs, high per unit wood cost, and overregulation – will not be effective. Give business a chance to thrive by developing forest carbon policies in an economic environment where they can be effective. Summary

Recognizing the important role sustainably managed forests play in climate change is a move in the right direction for the province of Ontario. However, any policy decisions that increase the cost of wood fibre or add to an already onerous regulatory burden are steps backward. The failure to recognize the leadership role the forest industry has already taken toward mitigating climate change is a serious omission in the Discussion Paper. We found the Discussion Paper to be very light in terms of detail. It is very difficult to predict what effects any forest carbon policy will have until there is much more clarification on what possible direct impacts on forest and facility operations will be. While there is much recognition of the need to consult aboriginal groups, there is not enough of doing the same for non-native northern and rural communities. Any policy direction must include meaningful consultation with rural and northern communities. Detailed socio-economic impact studies are a must prior to implementing any policies.

Ontario needs to come to grips with its business limiting policies – high energy costs, high wood costs and onerous regulation - that are outside of the climate change strategy if they are truly going to create effective forest carbon policies. Otherwise it is just meaningless window dressing. Jeff Muzzi

Chief Forester

Ensyn Technologies Inc.

[Original Comment ID: 205089]