Has the Canadian lumber industry really decided to forgo high-value-added production processes? Catherine Cobden, Senior Vice-President of the Ottawa-based Forest Products Association of Canada, argued that this is not the case. “We are not frozen in the status quo, but are actively and aggressively pursuing transformation,” she said. Ms. Cobden explained that the public and private sectors in Canada are involved in a “four-pronged strategy” aimed at raising the global competitiveness of Canada’s forest-product sector; not just in lumber, but also in paper and pulp, and newsprint. The four goals of this strategy, she said, are: first, to improve production techniques in order to enhance the productivity of the sector; second, to diversify into new foreign markets such as China; third, to develop an environmentally sustainable supply of lumber over the long term; and fourth, to extract the highest possible value from forest resources through the use of innovative technologies.

Necessity has been the driving force behind each of these initiatives. “By necessity, our sawmill and lumber sector have gotten more and more productive” as a result of the economic downturn, said Ms. Cobden. Declining demand from the U.S. has also pushed Canada to diversify its foreign markets into Asia’s fast-growing economies, and lumber is now Canada’s largest single export to both China and India. When Prime Minister Stephen Harper visited China in February, he was accompanied by representatives of the forest products industry.

When it comes to environmental sustainability, a lynchpin of FPAC’s strategy has been the Canadian Boreal Forest Agreement (CBFA), signed on May 18, 2011. CBFA brings together 21 forest companies – all of which belong to the Forest Products Association of Canada – and nine leading environmental organizations. The companies include Alberta-Pacific Forest Industries Inc., AV Group, Canfor Corp., Canfor Pulp Limited Partnership, Daishowa-Marubeni International Ltd., Howe Sound Pulp and Paper Ltd., Kruger Inc., and Louisiana-Pacific Canada Ltd. The environmental organizations include Canadian Parks and Wilderness Society, ForestEthics, Greenpeace, and the Nature Conservancy.

CBFA called for the suspension of logging on nearly 29 million hectares of boreal forest, representing virtually the entire habitat of boreal caribou, in order to allow for “intensive caribou protection planning, while maintaining essential fibre supply for uninterrupted mill operations.” Another component of the agreement is the suspension by participating environmental organ­izations of their divestment and ‘do-not-buy’ campaigns, which had been targeting the boreal operations and products of the companies participating in the Boreal Agreement.

When it comes to the goal of “value extraction,” the focus is on deriving as much value as possible inside Canada, rather than simply exporting raw materials to China or elsewhere. Ms. Cobden said FPAC’s goal is “to extract the maximum value from every tree.” To that end, FPAC’s Bio-Pathways Partnership Network has been investigating 37 different kinds of bio-energy, bio-materials and bio-chemical processes “to see what we could produce in Canada’s paper and sawmills,” said Ms. Cobden. One especially promising technology under development is known as pyrolysis; the thermo-chemical decomposition of organic material at elevated temperatures without the participation of oxygen. According to Ms. Cobden, pyrolysis is a remarkable process that can convert solid wood into liquid fuel “in less than two seconds.”

Although pyrolysis facilities could be established as stand-alone operations, researchers have concluded that the technology could create up to five times as many jobs – and a great deal more added value – if those facilities are integrated into paper mills or sawmills. “This is a great opportunity for Canada” or any other country with significant forest resources, she added. Not just because this kind of production could boost demand for lumber, but because the forest “could become a part of the supply chain that produces clothing” or other products that currently use petrochemicals. “We can replace non-renewable supply chain [of hydrocarbons] with a renewable sustainable feedstock” of lumber. Canadian researchers are working to develop nanotechnology that changes the make-up of wood; breaking it up into smaller nanocrystals that can then be put back together to make materials that are “unbelievably strong” and have multiple uses – such as in colouring for fabrics or cosmetics. “The sky is the limit. We don’t yet understand or appreciate all possible uses for these products,” said Ms. Cobden. “Our analysis shows that there will be a [potential] market of $200 billion by 2015.”

In a major step in that direction, the world’s first NanoCrystalline Cellulose (NCC) production plant, known as CelluForce, was inaugurated on January 26, 2012, at Domtar Corporation’s pulp and paper site in Windsor, Quebec. Commemorating the occasion, Jean Moreau, President and CEO of CelluForce, a joint venture of Domtar Corp. and the non-profit FPInnovations, announced that CelluForce will ramp up production to reach a target of one tonne per day. Trials are taking place in several sectors with 15 companies based in Canada, the U.S., Europe and Asia to integrate the new material (NCC) into four main industrial sectors: paints and coatings, films and barriers, textiles, and composites. Completion of the $36-million plant was made possible by $23.2 million in funding from the federal agency Natural Resources Canada (its Pulp and Paper Green Transformation Program, and its Transformative Technologies Program), and $20.1 million in funding from Quebec’s Natural Resources and Wildlife Department.

FPInnovations, the world’s largest private, not-for-profit forest research institute, was established in 2007 through a merger of several different research institutions: Forintek Canada Corporation, Forest Engineering Research Institute of Canada (FERIC), and Pulp and Paper Research Institute of Canada (Paprican), as well as the Canadian Wood Fibre Centre of Natural Resources Canada. Each of the institutes focuses on a different area of the Canadian forest industry, operating as separate divisions within FPInnovations: Forintek, in wood products; FERIC in forest operations; and Paprican in pulp and paper. FPInnovations’ more than 600 employees are spread across Canada. “We need to maintain the industry-government partnership that has so fundamentally helped the Canadian forest products sector reinvent itself as a dynamic player in the global marketplace of the 21st century,” said Mr. Lazar. “This is not the time to take the foot off the accelerator.”

In another major initiative, the Pulp and Paper Green Transformation Program of Natural Resources Canada is laying the groundwork for a greener, more sustainable future for Canada’s pulp-and-paper sector by supporting innovation and environmentally friendly investments in areas such as energy efficiency and renewable energy production. According to Natural Resources Canada, this program “will allow pulp and paper mills in Canada to further reduce their greenhouse gas emissions while helping to position them as leaders in the production of renewable energy from forest biomass.”

It works this way: the Pulp and Paper Green Transformation Program calculated a maximum “funding envelope” for each company in the program, based on a $0.16-per-litre credit for the “black liquor” (spent cooking liquor from the kraft process involved in digesting pulp wood into paper pulp) produced by their mills between January 1, 2009, and December 31, 2009. Firms then had until March 31, 2012, to draw on these funds to finance various approved capital projects that would offer “demonstrable environmental benefits, such as improvements to their energy efficiency or their capacity to produce alternative energy.” Total payments to Canadian industry will not exceed the amount of $1 billion.

Beyond that, some leading Canadian companies that are developing their own innovative products include:

• Tembec: This Montreal-based producer of pulp and lumber is developing specialty cellulose products that have a broad range of applications; such as in optical film used in the LCD (liquid crystal display) technology deployed in smartphones and computer screens. Tembec’s senior executives explained recently that exposure to the high-tech sector will give the forest products industry “access to a high-margin growth market, even as traditional markets such as newsprint continue to decline.” Other growing industries such as pharmaceuticals, food, cosmetics and oil drilling will increasingly rely on specialty cellulose products because of their unique properties. According to Tembec, specialty cellulose can act either as a texturizer – thus, making dairy products such as chocolate gelato creamier; as a thickening agent – making cosmetic creams smoother and more luxurious; as a splatter control agent – making paint, mortar and plaster easier to use; as a strengthening agent – making eyeglass frames stronger; or as a binder, where cellulose is essential in the production of pharmaceuticals and cosmetics.

• Alberta-Pacific Forest Industries: Last October, the Vancouver, B.C.-based firm (Al-Pac) received $4.5 million in federal government support for its Methanol Purification Project located in Boyle, Alberta. Al-Pac already produces unpurified bio-methanol burned as a fuel in a kiln to help recycle lime. Al Ward, President of Alberta-Pacific, announced that beginning in the first quarter of 2012, the new technology will enable the company to purify bio-methanol used in the production of a pulp whitening agent while commercially selling the remainder of the bio-methanol. Al-Pac is North America’s largest single-line kraft pulp mill, producing 650,000 air-dried tonnes of bleached hardwood and softwood pulp annually. Mr. Ward said that the new technology “makes our goal of becoming a more diversified manufacturer a reality.”

• Canfor Pulp: Canfor’s Pulp and Paper Research Group focuses on these areas: developing new pulp grades; improving the properties of existing products; working with customers to ensure that maximum value is being realized from the unique attributes in its pulps, and improving the environmental and process performance of the pulp operations.