AF&PA on the Issues
Members of the American Forest & Paper Association (AF&PA) continue to innovate and develop products to meet current and future societal needs. The people of our industry take great pride in the role our products play in literacy, education, hygiene, food safety, product marketing and protection and home and office construction. We operate our businesses with a commitment to sustainability by being responsible to our communities, our economy and our environment. We support policies that allow our businesses to compete and contribute to economic growth using the skills and talents of the nearly 900,000 men and women who make the paper and wood products so vital to the lives of people around the world.
The member companies of AF&PA have made billions of dollars in investments ($52 billion from 2006-2001) to improve our performance and our environmental impact. Many of those investments have led to major improvements in 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. Recently finalized Boiler MACT regulations will impose an additional investment burden of between $2.5 and $3 billion.
Upcoming regulations such as NAAQS ozone regulations, residual risk and technology review part two, and greenhouse gas permitting regulations for paper mills are among our highest priorities for the 113th Congress. There is little or no certainty that the regulation promulgated today will withstand future court challenge. This is because of the highly complex and, many times conflicting statutory requirements and regulatory interpretations. Regulations can play a vital role in society and are most effective when they meet the environmental concerns as well as the economic needs and societal expectations. BIOBASED
Forest products should be eligible for USDA’s Biobased Markets Program, which is marketed by USDA as the BioPreferred® program. The program is comprised of two separate initiatives: Product Labeling, which allows the USDA to authorize manufacturers and vendors of biobased products to use a “USDA Certified Biobased Product” mark in the broader marketplace; and a Federal Procurement Preference, which gives a preference for the purchase of biobased products by the federal government.
The 2008 Farm Bill clearly defines a ‘biobased’ product as “a product determined by the Secretary to be a commercial or industry product that is composed in whole or significant part of biological products, including renewable domestic agriculture and forestry material.” Despite this definition, USDA has arbitrarily excluded the majority of the forest industry’s products from these programs.
While USDA’s BioPreferred Programs initiatives are well-intentioned, they have created a market disadvantage for U.S. forest products, and have provided a preference for imported products in some cases. Congress should clarify that forest products are eligible for the BioPreferred program. AF&PA is supportive of the Forest Products Fairness Act, which would create a level playing field for forest products.
BIOMASS FOR RENEWABLE ENERGY
AF&PA supports policies that rely on markets rather than mandates and incentives to promote competition and innovation in the development of renewable energy. Mandates and incentives merely distort the market for wood biomass and divert it for energy use instead of manufactured products. The rapid increase and combined effect of these mandates and incentives could affect the balance between the many uses of the forest resources, such as manufactured products, energy, habitat, and recreation.
Studies show that per ton of wood used, the forest products industry sustains nine times as many total jobs as the biomass energy sector. For this reason, it is important that federal renewable energy policies provide a level playing field so as not to require forest products manufacturing facilities to compete with their power suppliers and other energy producers for biomass fiber. Longer-term advances in bioenergy can help the nation meet its future energy demands and support a robust pulp, paper, packaging and wood products manufacturing sector if government policies encourage new biomass supply to help meet future demand.
AF&PA supports energy policies that increase access to energy supplies from diverse sources, promote conservation and efficiency, and invest in breakthrough technologies. We believe market forces should be the primary driver for determining fuel choices for energy generation and that market-distorting mandates should be avoided.
Our industry accounts for 70 percent of the renewable biomass energy used by all manufacturing facilities in the U.S., while also accounting for 33 percent of the electricity generated by the manufacturing sector using cogeneration systems. About five percent of our renewable electricity is sold to the grid and about two-thirds of our industry’s total energy demand is met through carbon neutral biomass. Even with these significant abilities to self-generate energy, purchased energy is our industry’s third largest manufacturing cost. And it is noteworthy that we’ve improved our purchased energy efficiency by more than eight percent since 2005.
The U.S. Supreme Court is currently deliberating the Ninth Circuit decision in Northwest Environmental Defense Center (NEDC) v. Brown, overturning the EPA’s long-standing “silviculture” rule that has exempted logging road stormwater runoff from Clean Water Act (CWA) National Pollutant Discharge Elimination System (NPDES) permitting requirements since 1976. AF&PA believes that EPA’s 1976 silviculture rule properly recognizes that forest management sources, including forest roads, are more effectively regulated through best management practices developed by states and funded by EPA. If the 9th Circuit decision stands, it could have serious negative consequences on the supply of fiber for the forest products industry, the men and women it employs, the essential products it makes, and the renewable energy it generates. A final outcome on the case is still pending. AF&PA support Congressional efforts to ensure that forest roads remain exempt from a burdensome new permitting process that could create business uncertainty and additional litigation.
GREENHOUSE GAS (GHG) REGULATION
Our member companies have a strong track record of greenhouse gas reduction, having reduced our emissions by 10.5 percent since 2005. The industry uses raw materials from sustainably-managed forests that absorb carbon dioxide from the atmosphere; manufactures products that store carbon; and is the leading industrial producer and user of renewable energy, as well as avoiding methane emissions from landfills and extending our fiber supply by recovering and reusing paper through recycling.
In 2010 EPA’s Tailoring rule set in motion the regulation of greenhouse gases. EPA “deferred” the regulation of carbon from biogenic emissions and is in the process of determining how to “count” emissions from biomass energy used in paper and wood products manufacturing operations under its GHG regulatory framework. All other industrialized nations recognize biomass emissions as carbon neutral and prior to EPA’s Tailoring rule, so did the US. AF&PA has been working extensively with EPA and various stakeholders to find a policy solution.
AF&PA supports international efforts to prevent illegal logging and its associated trade; this protects legitimate trade and levels the playing field for the U.S. forest products industry. AF&PA encouraged the Congressional passage of the Lacey Act amendments in 2008, which made it illegal to trade plants and plant products, including wood and paper, harvested in violation of the laws of a foreign country, and established penalties for violation of the act. The act also requires importers to file a declaration form with the name of the country of harvest, the species and genus name of plants contained in their products. AF&PA supports adequate funding for the act’s full implementation and enforcement efforts, and opposes legislation that would undermine the effectiveness of the Lacey Act.
Since 1990, the rate of paper recovered for recycling in the U.S. has nearly doubled. By weight, more paper is recovered from municipal waste streams than glass, plastic and aluminum combined. Recovering paper extends the fiber supply, saves valuable landfill space, and avoids greenhouse gas emissions of more than 22 million tons of CO2 equivalents each year. Nearly three quarters of communities across America, and 87 percent of total population have access to curb-side or drop off recycling programs. This increase in access is responsible for a 2011 paper recovery rate of 66.8 percent. The market-based recovery system has fueled innovation and creating lasting infrastructure.
The U.S. Postal Service (USPS) is the essential component of a $1 trillion mailing industry that employs 7.5 million Americans in large and small business enterprises as diverse as advertising, printing, paper manufacturing, publishing, and financial services. Approximately one-third of printing and writing paper demand is delivered through the mail system. With financial losses exceeding $15 billion in 2012, the U.S. Postal Service (USPS) is must change significantly in order to return to profitability and establish a sustainable business model. AF&PA supports legislative measures that will help the USPS achieve financial stability by encouraging new revenue sources, attracting customers, and realizing cost savings.
AF&PA members established a comprehensive sustainability initiative known as Better Practices, Better Planet 2020.
The six goals targeted within Better Practices bring focus to increasing paper recovery for recycling, improving energy efficiency, reducing greenhouse gas emissions, promoting sustainable forestry practices, improving workplace safety and reducing 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.
The pulp and paper industry is capital-intensive and operates in a competitive global marketplace. Any comprehensive business tax reform must help to create economic growth and improve the competitiveness of important sectors of the economy, including the U.S. paper and wood products manufacturing sector. U.S. tax rates are far in excess of the OECD average and put U.S. manufacturers at a competitive disadvantage. Appropriate tax treatment for business investment in productive assets, research and development and interest expenses will help ensure a strong manufacturing economy. Reforming the tax treatment of income earned in global commerce is essential for today’s global economy. Congress should avoid retroactive tax changes and ensure that appropriate transition relief is provided.
Exports have been of growing importance for our industry, with paper and wood products exports accounting for more than 15 percent of the industry’s annual total sales. In 2011, the industry’s global exports totaled an estimated $31.2 billion, of which $7.9 billion were exports of wood products and $23.3 billion were exports of pulp and paper.
AF&PA supports free but fair trade. In an increasingly globalized market, it is critical for the U.S. pulp, paper, packaging and wood products industry to achieve unrestricted access to international markets and level the playing field among international competitors by eliminating both tariff and non-tariff barriers. The industry encourages the adoption of bilateral, regional and multilateral trade agreements that offer substantive economic benefits to U.S. forest products companies and their workers. Specifically pulp and paper manufacturers are supportive of the current negotiations of the Trans-Pacific Partnership FTA, which will establish a strong platform for achieving trade liberalization in the fast growing Asia-Pacific region.
Our industry supports efforts to increase transportation efficiency through federal truck weights of 97,000 pounds (with a sixth axle). The benefits of the increase from 80,000 pounds would permit the same amount of freight to be transported on fewer trucks, reducing congestion, energy consumption, carbon emissions, and improving transportation efficiency. It would also mitigate the current transportation capacity shortage, inhibiting moving raw materials to mills and products to customers.
AF&PA supports legislation to reform the Surface Transportation Board, to effectively address rail service challenges for shippers. Nearly one-third of forest products facilities have access to only one rail carrier, which inherently increases costs. AF&PA also supports legislation removing current special railroad exemptions from the nation’s antitrust laws.