Potential Impacts of Energy and Climate Policies on the U. S. Pulp and Paper Industry

Abstract

Many energy and climate policies are being debated in the United States that could have significant impact upon the future of the pulp and paper industry. Five of these policies are examined here in terms of their possible directional influences on biomass energy and paper production: (1) a national renewable electricity standard, (2) a U.S. greenhouse gas cap and trade system, (3) stronger renewable fuels standards, (4) expanded state incentives for biomass pilot plants, and (5) more favorable taxation of forest property. The observed trends reinforce the value of forest product diversification through the addition of biomass power generation and transportation fuels/chemicals production as co-products of the pulp and paper industry. Therefore, directing capital expenditures to the increasingly cost-competitive and expanding biopower and biofuels markets would appear to have merit in anticipation of the promulgation of new energy and climate legislation. Accelerated investments in new facilities such as biorefineries and cogeneration units and in energy-efficiency upgrades would position the pulp and paper industry to profit from current trends and likely policy initiatives.