AF&PA on the Issues

Our industry, employing over 900,000 men and women, is one built on sustainable principles:
producing recyclable products from a renewable resource. American Forest & Paper Association
(AF&PA) members manufacture and provide essential products used in daily lives of people across
the country and around the world — products that play an important role in literacy, education,
hygiene, food safety, product marketing and protection, and home and office construction. We
support market-based policies and regulations that foster economic growth, job creation, and
international competitiveness in this vital sector. Public policies are most effective when they
meet the economic needs, environmental concerns, and societal expectations of our diverse
communities.

Air Regulations

AF&PA member companies have invested billions of dollars to improve our performance and air
quality, including a 23 percent reduction in emissions of nitrogen oxide (NOx) and 42 percent for
sulfur dioxide (SO2) by our pulp and paper facilities since 2000. Unfortunately, the industry faces
challenges from recently released and expected new regulatory proposals — driven by lawsuits
or petitions under the Clean Air Act — that together could impose roughly $10 billion in new
capital obligations on the industry over the next 10 years. Business uncertainty often continues
even after a rule is published due to challenges in court. Some provisions of a given law may be
overturned even after compliance investments have been made, only leading to more cost and
confusion.


Biomass for Renewable Energy

The paper and wood products manufacturing industry is the nation’s leading producer and
user of carbon-neutral, renewable biomass energy. AF&PA supports policies that rely on free
markets — rather than mandates and incentives — to promote competition and innovation in
the development of renewable energy. Government policies that pick winners and losers by
mandating a particular use for a raw material or fuel are misguided and should be avoided.
Woody biomass is an essential raw material for value-added forest products, such as paper,
packaging, wood products, wood-based chemicals, and other innovative wood-based products.
On average, about two-thirds of our industry’s total energy demand is met through carbonneutral
biomass, and some of our renewable electricity is sold to the grid. We also account
for 33 percent of the electricity generated by the manufacturing sector using highly efficient
cogeneration systems.

Studies show that per ton of wood used, the paper and wood products manufacturing industry
sustains nine times as many total jobs as the biomass energy sector. Accordingly, it is important
for federal renewable energy policies to provide a level playing field so that forest products
manufacturing facilities are not required to compete with their power suppliers and other energy
producers for biomass fiber.

Carbon Neutrality of Biomass Energy

Paper and wood products mills use biomass residuals from their manufacturing operations to
produce energy, providing significant carbon reducing benefits to the environment. AF&PA urges
policymakers to continue to recognize our industry’s unique use of biomass as carbon neutral.
As forests grow, trees remove CO2 from the atmosphere and convert it into organic carbon. Trees
release the stored carbon when they die, decay, or are combusted, thus completing the carbon
cycle. The use of biomass in the paper and wood products manufacturing industry provides
enormous greenhouse gas (GHG) reduction benefits by avoiding the emission of about 181
million metric tons of CO2e. This is equivalent to removing about 35 million cars from the road.
Under the U.S. Environmental Protection Agency’s (EPA) current and proposed greenhouse gas
regulations, biogenic CO2 emissions are counted the same as fossil fuel emissions. On Nov. 19,
2014, after an extensive four-year review, EPA issued its revised draft Framework for Assessing
Biogenic CO2 Emissions from Stationary Sources and a related policy memorandum. In the
memorandum, EPA makes a preliminary finding that the use of certain forest-derived industrial
byproducts for energy is carbon neutral. In the framework appendices, EPA unequivocally finds
that black liquor is carbon neutral. While EPA recognizes that there are carbon benefits from
using other manufacturing residuals for energy, the forest products industry needs greater
certainty for all forest products manufacturing residuals and detailed information about how EPA
will determine what is “sustainably-derived” forest biomass.

Illegal Logging

AF&PA is a strong proponent of international efforts to suppress illegal logging and its associated
trades. We played an active role in a coalition of forest products industry, environmental and
labor groups to advocate for passage of the 2008 Lacey Act amendments, because trade in
illegally sourced fiber is a serious detriment to the industry’s sustainability, the environment and
the global economy. An AF&PA-commissioned study estimated that illegal logging cost the U.S.
forest products industry some $1 billion annually in lost export opportunities and depressed U.S.
wood prices.

AF&PA works closely with a coalition that is calling on federal agencies to ensure successful implementation of the law. The association supports adequate funding for the implementation of the Lacey Act and the phase-in of the declaration requirement to imports of composite wood products and pulp and paper.

AF&PA is on record in support of administrative clarification that the Lacey Act amendments do
not apply to products imported or manufactured prior to May 2008, and the Lacey Act should not
be enforced against individual consumers.

International Trade and Competitiveness

Paper and wood products exports accounts for more than 15 percent of the industry’s annual
total sales. In 2013, U.S. exports of forest products reached $31.3 billion, consisting of $22.3
billion in paper and wood pulp exports and $9 billion in exports of wood products.

AF&PA supports free and fair trade. In an increasingly globalized market, it is critical for the U.S.
paper and wood products manufacturing industry to achieve unrestricted access to international
markets and level the playing field among international competitors by eliminating both tariff and
non-tariff barriers. AF&PA supports bilateral, regional and multilateral trade agreements that offer
substantive economic benefits to U.S. forest products companies and their workers. Specifically,
we support the current negotiations of the Trans-Pacific Partnership Free Trade Agreement,
which will establish a strong platform for achieving trade liberalization in the fast growing Asia-
Pacific region.

AF&PA also supports the free trade negotiations with the European Union, called the Transatlantic
Trade and Investment Partnership. This trade deal provides an opportunity to eliminate tariff and
non-tariff barriers and regulatory impediments to trade in one of the top export markets for U.S.
forest products. To successfully complete these free trade agreements to the benefit of U.S.
business, AF&PA supports the congressional consideration and enactment of Trade Promotion
Authority.

Paper Recycling

More than 63 percent of paper consumed in the U.S. was recovered for recycling in 2013, and
the annual paper recovery rate in the U.S. has nearly doubled since 1990. By weight, more paper
is recovered from municipal solid waste streams than glass, plastic, and aluminum combined,
according to the U.S. EPA. Recovering paper extends the useful life of fiber and saves valuable
landfill space. Paper recycling is widely accessible, with 87 percent of Americans having access
to community curbside and/or drop-off paper recycling programs. The existing voluntary, marketbased
paper recovery system fuels innovation, creates lasting infrastructure, and enables us to
make new products from paper that is diverted from the waste stream.

Postal Reform

The U.S. Postal Service (USPS) is the essential component of a $1 trillion mailing industry that
employs about 8 million Americans in large and small business enterprises across the country.
Commercial customers are vital to the long-term viability of the Postal Service, representing
approximately 71 percent ($46 billion) of USPS revenue. Approximately one-third of printing and
writing paper demand is delivered through the mail system.

Continuing financial losses without much-needed legislation will force USPS to take more drastic
actions that could have disruptive, negative effects on customers, jobs and the availability of
postal services upon which many Americans depend. Only Congress, through postal reform
legislation, can make necessary changes that will ensure mail is an affordable and effective
option that meets the service needs of customers. Postal reform legislation must recognize that
rate increases above inflation and reductions in service will drive customers away and further
accelerate the decline in mail volume.

AF&PA supports legislative measures that eliminate unreasonable financial obligations that
jeopardize USPS financial viability, and ensure the Postal Service does not have unchecked
authority to set postal rates, as it has a monopoly on delivery of market dominant products.
AF&PA opposes the exigent rate increase as a permanent part of the future rate base and
opposes reducing weekly mail service delivery to 5 days until other cost saving measures are
considered before implementing service reductions.

Promoting Access to Paper Options for Government Programs

AF&PA believes people should be able to choose the manner in which they receive information
and services from the federal government and supports policies that recognize paper-based
communications as critically important for millions of Americans. Increasingly, taxpayers are
being denied the option to receive federal services and communications such as social security
documents, tax documents, and savings bonds in a paper format. The government’s move to
digitize all forms of communication disadvantages nearly 30 percent of American households
without Internet access, 45 percent of seniors who do not own a computer, and 8 percent of the
population who choose to not maintain a bank account.

AF&PA is a leader in the Consumers for Paper Options Coalition, advocating for congressional
and executive branch support of federal policies protecting a citizen’s right to choose paperbased
information and services.

AF&PA supports legislative initiatives that preserve paper options. We oppose government
actions that would erect barriers to citizen’s right to paper-based information or eliminate paperbased
documentation or services without congressional oversight or public input. Paper and
digital formats can be complementary and meet different needs. Individuals who wish to receive
paper-based communications and documentation should have that choice and not be forced to
digital delivery or forgo the information or service.

The American Forest & Paper Association (AF&PA) serves to advance a sustainable U.S. pulp, paper, packaging, and wood products manufacturing industry through fact-based public policy and marketplace advocacy. AF&PA member companies make products essential for everyday life from renewable and recyclable resources and are committed to continuous improvement through the industry’s sustainability
initiative - Better Practices, Better Planet 2020. The forest products industry accounts for approximately 4 percent of the total U.S. manufacturing GDP, manufactures over $200 billion in products annually, and employs approximately 900,000 men and women. The industry meets a payroll of approximately $50 billion annually and is among the top 10 manufacturing sector employers in 47 states.

Sustainability

AF&PA’s comprehensive sustainability initiative — Better Practices, Better Planet 2020 — includes
six measurable goals focusing on paper recovery for recycling, energy efficiency, greenhouse
gas emissions, sustainable forestry practices, workplace safety, and water use. Our members
have long been good stewards of our planet’s resources, and this initiative shows our proactive
approach to the long-term success of our industry, our communities, and our environment. We
have made great strides towards reaching the Better Practices, Better Planet 2020 goals, already
nearly achieving those for energy efficiency, greenhouse gas emissions and workplace safety.

Tax

AF&PA urges Congress to reform the federal tax system in a manner that promotes economic
growth, job opportunities, and the competitiveness of U.S.-based businesses. We believe the
tax code should provide a level playing field for business activity and avoid picking “winners and
losers” among economic players.

Transportation

AF&PA supports making critical improvements to America’s transportation efficiency by increasing
the maximum gross vehicle weight on federal interstate highways from 80,000 pounds to 97,000
pounds with an additional axle. An increase in the maximum allowable weight of six-axle semitrailers
is an effective and safe way to increase truck productivity and America’s freight capacity.
Technology improvements and stronger roads and bridges make it safe for each truck to carry
more freight. It would also mitigate the current transportation capacity shortage that inhibits
moving raw materials to mills and products to customers.

AF&PA also supports legislation to reform the Surface Transportation Board to effectively address
rail service challenges for shippers and supports removing current special railroad exemptions
from the nation’s antitrust laws. Nearly one-third of forest products facilities have access to only
one rail carrier, which inevitably increases costs.