Guest Blogger – Larry Stanley, RPF

As the Canadian forestry sector begins to recover, it is also undergoing a transformation in thought, word and deed. In February 2010, Avrim Lazar, President of the Forest Products Association of Canada announced the need for a new green business model for the Canadian forest products industry that will address the triple bottom line of strong environmental performance, clean energy initiatives and market advantage through the integration of bio-energy and bio-products into traditional forestry via the bio-refinery concept. 1

The extent and timing at which these developments occur will depend upon :
• the availability of underutilized biomass resources;
• the forest industry’s ability to reduce operating costs;
• demand for less-expensive energy sources;
• the pace of development for future bioproducts

As in all stories, there is more than one perspective. Lay aside the complexities surrounding access to underutilized biomass resources, and the necessity to reduce operating costs. Instead, let’s examine the impacts that an increasing demand for less-expensive energy sources will have on biomass utilization levels, and the forest industry’s need to move towards a balanced spectrum of supply-driven commodity products (i.e. lumber, pulp), engineered and remanufactured composite products, and high end, market-driven bio-chemical and bio-technology products.

In 2006 and 2007 the Canadian Forest Industry began to appreciate the full impact of global competition and product demand shifts on Canadian pulp and lumber production. The ability of many countries to produce commodity lumber, paper and pulp products and deliver that product to market at prices highly competitive to the Canadian forest product industry; the extreme depression in the United States new housing market, the Canada/United States Softwood Lumber Agreement, and a range of forest management issues nationally, all converged to create extreme pressure on a Canadian Forest Industry model no longer flexible enough to respond to rapidly changing global trade and consumer demand patterns.

The result has been predictable. Components of the industry unable or unwilling to shift from traditional Canadian marketing and production patterns closed or went into bankruptcy. An industry that relied on highly inter-dependent supply chain functions saw major ripple effects as independent operators, dependent upon major production companies for contracts, suddenly saw these contracts cease to operate. Forest operating equipment is not only expensive, it is also highly specialized and therefore, independent operators were forced to lay off workers and, where possible, divest themselves of assets.

But the words of Mr. Lazar and others who truly wish to see transformation in the Canadian forest sector provide strong evidence that the industry is not down and out. Innovative leadership in the industry is alive and well, and starting to restructure thinking among Canadians as to how it can once again have a vibrant, competitive and world class forest bioproducts industry.

As early as 1999, Canadian organizations were examining the concepts and processes that would be required to transform the Canadian forestry sector, and within that specifically the Canadian Forest Bio-products sector. For example, in 2007 FPInnovations in cooperation with the Alberta Research Council produced the Fibre Roadmap “Making the most of Alberta’s lignocellulosic resource” 2. The report recognized the bioeconomy – using renewable resources to produce economic wealth, social and community development, growth and investment, as key components for the Canadian forestry sector transition. That report, through its four proposed actions supports the recent statements of Mr. Lazar of the Forest Products Association of Canada (FPAC) by recommending a clear vision for a robust, balanced, responsible economy which includes the bioeconomy as a key component. The report goes on to recommend adopting four principles: one bioeconomy, not many disconnected “silos”; an economy that focuses on the whole value chain, not just production; firms and organizations that are nimble and flexible; a commitment to a sustainable environment.

The report also recognizes some preconditions necessary for building an effective bioeconomy: the need to find new, sustainable ways to manage feedstocks; the need for a strong innovation infrastructure; the need for strategic alliances, cost sharing and collaborative partnerships.

The report recommends focusing actions around four key strategies: building biorefineries and an integrated industrial cluster; transforming and sustaining the current lignocellulosic-based industries – specifically pulp and wood products; sustaining and enhancing forest and agriculture based communities; growing biocomposite, biomaterial and bioproduct companies.

What does this mean for the forest industry? It means a major shift in how the industry perceives itself. No longer is timber, pulp and panel board the only game in town. By widening the perception of wood fibre conversion, the industry must now think of the entire range of products on the value-chain, and the economics of producing and marketing these products into global and domestic markets. It must think of trees not just as roundwood for conversion. It must view wood as lignocellulosic fibre that has many conversion opportunities. This leads to an evaluation of what, how and where wood fibre is grown, managed and extracted.

Can the industry achieve this paradigm shift? I believe it can, and in the process become even stronger in its world share of wood products markets than ever before. But at the same time, the industry must look domestically to assisting in the stabilization of forest dependent communities, and a national workforce that will need to understand and embrace new technologies, both in the bush and in the mill.

The future of the forest industry as a green energy supplier, along with bioproducts from renewable feedstocks is bright. It will just take time to develop products for new, diversified markets and to tap into the full biomass potential of our commercial forest resources.

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1. Forest Products Association of Canada, Avrim Lazar on Transforming the Forest Products Industry, http://www.fpac.ca/index.php/en/speeches-permalink/394/ accessed March 11, 2010.
2. Forintek Canada Corp. and Alberta Research Council. March, 2007. Getting Value from every fibre: Making the most of alberta’s lignocellulosic resource. Alberta Advanced Education and Technology. pp 51.

Larry Stanley, RPF