AF&PA on the Issues
Our industry, employing nearly 900,000 men and women, is one built on sustainable principles: producing recyclable products from a renewable resource. Members of the American Forest & Paper Association (AF&PA) manufacture and provide essential products used in daily lives of people across the country and around the world. Our members manufacture paper, packaging, pulp and wood 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 environmental concerns, economic needs and societal expectations of our diverse communities.
AF&PA member companies have made billions of dollars in investments 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 about $14 billion.
Upcoming regulations, such as, NAAQS ozone regulations, residual risk and technology for pulp mills, and greenhouse gas (GHG) permitting regulations for paper mills are among our highest priorities for the 113th Congress and cumulatively could impose $14 billion in new compliance costs. Business uncertainty continues even after a rule is promulgated because most high-profile air rules get challenged in court. Some things may be overturned even after compliance investments have been made. Regulations can play a vital role in society and are most effective when they meet environmental concerns as well as economic needs and societal expectations.
Biomass for Renewable 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. The rapid increase and combined effect of recent mandates and incentives distort the market for wood biomass and could affect the balance between its many uses, such as manufactured products, energy, habitat and recreation.
Our industry accounts for 62 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. On average, approximately two-thirds of our industry’s total energy demand is met through carbon neutral biomass, and some of our renewable electricity is sold to the grid.
Studies show that per ton of wood used, the forest products industry sustains nine times as many total jobs as the biomass energy sector. Accordingly, 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, paper-based packaging, and wood products manufacturing sector if government policies encourage new biomass supply to help meet future demand.
Carbon Neutrality of Biomass Energy
Paper and wood products manufacturers use biomass residues from sustainable forestry operations to produce energy, displacing fossil fuel use and providing significant carbon reduction benefits to the environment. AF&PA urges policymakers to continue to recognize our industry’s use of biomass for energy as carbon neutral. In 2010, EPA’s Tailoring Rule set in motion the regulation of GHGs. In 2011, EPA announced it would regulate biogenic emissions under the Clean Air Act’s New Source Review program. EPA issued a rule to defer the regulations for three years (until July 2014) while it studied and proposed an Accounting Framework for Biogenic CO2 Emissions From Stationary Sources. On July 12, 2013, the D.C. Circuit Court of Appeals vacated EPA’s Deferral Rule, stating EPA failed to adequately justify the temporary delay, but the court left the door open for EPA to issue permanent regulations distinguishing biogenic CO2 from other emissions. The ruling underscores the need for EPA to complete its accounting framework for biogenic carbon emissions and provide clarity that recognizes the greenhouse gas reduction benefits of biomass energy.
Farm Bill and Biobased Products
The forest products industry supports the Forest Inventory and Analysis, Conservation Reserve, and Plant Pest and Disease Management and Disaster Prevention Programs and would like to see them strengthened.
USDA should clarify that forest products are eligible for the BioPreferred program’s labeling and procurement initiatives. USDA’s implementation of these initiatives has created a market disadvantage for U.S. forest products, even though these products far exceed USDA’s biobased content threshold for eligibility and generally contain higher biobased content than other products USDA does include in the program. Moreover, in some cases, USDA’s implementation of the program provides a preference for imported products. The government should not pick winners and losers in the marketplace. Congress should clarify that forest products are eligible for the BioPreferred program by adopting the Forest Products Fairness Act (S.463/H.R. 979). The House bill was included in the House-passed version of the Farm Bill AF&PA supports maintaining this provision in the final version of the bill as negotiated between the House and Senate.
Finally, we support removal of biomass energy mandates and incentives from farm bill policy, as they have potential unintended consequences that would distort markets for fiber and harm existing jobs and renewable energy production. AF&PA believes that the free market, not government, should determine the highest and best use of biomass.
The U.S. Supreme Court in a 7-1 opinion reversed the Ninth Circuit decision in Northwest Environmental Defense Center v. Brown (NEDC v. Brown) – the case in which the Ninth Circuit held that Clean Water Act point source permits were required for stormwater runoff from forest logging roads. In reversing the Ninth Circuit, the Supreme Court upheld the Environmental Protection Agency’s (EPA’s) 35-year regulation exempting channeled logging road stormwater runoff from permitting requirements.
The Silviculture Regulatory Consistency Acts (H.R. 2026 and S. 971) were introduced on May 16, 2013 in the House by Representatives Jaime Herrera Beutler (R-WA) and Kurt Schrader (D-OR); and in the Senate by Senators Ron Wyden (D-OR) and Michael Crapo (R-ID). AF&PA supports this legislation that would prohibit EPA from requiring permits or directly or indirectly requiring states to permit stormwater runoff from forest roads, preserving EPA’s 37-year old policy treating forest roads under the Clean Water Act as nonpoint sources addressed under state-adopted Best Management Practices (BMPs). Rep. Jaime Herrera Beutler successfully offered an amendment to the House Farm bill to include the Silviculture Regulatory Consistency Act. AF&PA supports this provision as the Farm Bill moves to a conference.
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 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 the genus of plant materials contained in their products, although this requirement has not been phased-in yet for pulp and paper. 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.
More than 60 percent of the paper and paper-based packaging consumed in the U.S. was recovered for recycling in each of the past four years, including 65.1 percent in 2012. Since 1990, the annual paper recovery rate in the U.S. has nearly doubled. By weight, more paper is recovered from municipal solid waste streams than glass, plastic, and aluminum combined. Recovering paper extends the fiber supply by reusing a renewable resource, saves valuable landfill space, and avoids GHG emissions of more than 18.5 million metric tons of CO2 equivalent each year. According to the most recent AF&PA Community Survey, 87 percent of Americans have access to community curbside and/or drop-off paper and paper-based packaging recycling programs. The existing voluntary, market-based paper recovery system fuels innovation and creates lasting infrastructure, which benefits the industry, the economy, and the environment.
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 USPS must change significantly in order to return to profitability and establish a sustainable business model. AF&PA supports legislative measures that allows for long-term cost reductions and new revenue sources, relieves USPS of unfair financial obligations, does not raise postage rates on First Class or Standard Mail, and satisfies the service needs of the nation. . Only Congress can provide the necessary tools through legislation that will provide USPS with the flexibility and authority to ensure mail is an affordable and effective option that meets the changing communication and business transaction needs of customers.
Promoting Access to Paper Options for Government Programs
AF&PA supports H. Res 97 to ensure the federal government takes all appropriate measures to provide citizens with the choice of receiving paper-based information. Increasingly, taxpayers are receiving federal services and communications such as social security documents, tax documents, and savings bonds electronically. In a recent survey, 72 percent of respondents said the government should continue to offer important documents and records in paper form. AF&PA supports policies that recognize paper-based communications are critically important for millions of Americans—especially for seniors and the 30 percent of Americans without online access. AF&PA also promotes the efficiency and cost-effectiveness of paper-based tools in the classroom. Traditional textbooks play an important role in helping to close the achievement gap among American students in math and science. Paper and electronic formats work together to attract, engage, and inform, providing a deeper and more compelling experience than either one on their own. AF&PA encourages the complementary use of digital and paper technologies, rather than choosing one technology at the exclusion of another.
AF&PA’s comprehensive sustainability initiative, Better Practices, Better Planet 2020, includes six measurable goals that focus on 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 forest products 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 Organization for Economic Cooperation and Development 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 2012, the industry’s global exports totaled an estimated $30 billion, of which $7.9 billion were exports of wood products and $22 billion were exports of pulp and paper.
AF&PA supports free and 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 negotiation of bilateral, regional, and multilateral trade agreements that offer substantive economic benefits to U.S. forest products companies and their workers. Specifically, forest products manufacturers are supportive of 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 recently-initiated negotiations of the Transatlantic Trade and Investment Partnership, a comprehensive trade and investment agreement with the European Union. This trade deal provides an opportunity to eliminate tariffs on wood products and non-tariff trade barriers across the sector in one of the top export markets for U.S. forest products and potentially provide a forum for addressing adverse packaging regulatory issues in Europe.
AF&PA supports making critical improvements to America’s transportation efficiency by enacting H.R. 612, the Safe and Efficient Transportation Act of 2013, to increase the maximum Gross Vehicle Weight on federal interstate highways from 80,000 pounds to 97,000 pounds with an additional axle. The benefits of the increase from 80,000 pounds would permit the same amount of freight to be transported on fewer trucks, thus reducing congestion, energy consumption, and 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 also 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.