Pulp Processing, Pollution and Trade

          CASE NUMBER:         121 
          CASE MNEMONIC:      PULP 
          CASE NAME:          Pulp Processing, Pollution and Trade

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A.        IDENTIFICATION

1.        The Issue

     The production of wood pulp across the globe rests on two

different processes; alkaline sulfate (Kraft or chemical) and

thermoechanical (TMP or mechanical) pulping.  At issue is the

amount of pollution each process releases into the environment

every year.  The Kraft process had been an industry standard until

the TMP process was developed in 1968.  Since the Kraft process

relies on chemical based production of pulp, the amount of  toxins

created as an after product are quite high.  In contrast, TMP

produces significantly less pollution at less cost per ton of pulp,

making this process more economical and efficient.  Diffusion of

this cleaner technology to developing nations will have several

impacts.  First, the amount of pollution that in incurred in the

pulping process will be much lower.  This will curb the

environmental impact on a countries citizens, and on the raw

material inputs for the pulping.  Second, the TMP makes pulp

production more efficient and is less capital intensive as the

chemical process.

2.        Description 

     Most developed or developing countries have a pulping

industry.  The major industrialized nations (the United States,

Japan, Europe, as well as some of Eastern Europe) have switched a

large portion of their pulping industries to the TMP.  Developing

countries (ie. Brazil, Turkey, Mexico, India) and even poorer

nations (Angola, Morocco, Zimbabwe), stand the most to gain from

TMP.  There are several reasons why this technology has not

dominated the industry.

     1.  The time lag in technology development and diffusion. 

     As TMP have become more popular, the equipment and costs

     have gone down, allowing other countries to acquire the

     technology.

     2.  Both TMP and the Kraft process have different

     advantages in producing a final product (these will be

     discussed below).

     3.  Environmental concerns by consumers, and national

     regulations have only just begun to make profound impacts

     on the industry.  As standards become higher, and

     consumers more aware of the products, will cleaner

     technologies be applied.

     The environmental impact of the Kraft process on the

environment takes place at several stages.  As was mentioned above,

the Kraft process is better suited for certain final products.  The

Kraft process is more versatile, allowing most types of wood to be

processed.  In addition, the quality of paper products is higher

because the process makes stronger fibers for the paper.  However,

the paper tends to be darker and requires bleaching (adding more

chemicals and pollutants to the process).  TMP produces a weaker

paper, but does not need bleaching.  Since there are so many

different types of wood that can be processed by chemical pulping,

deforestation becomes a more significant problem.  A developing

country using the chemical method would process any type of tree

that it has in abundance, regardless of the ecological impacts. 

Thus, exotic trees, or trees that are significant contributors to

an ecosystem would be threatened by this process.  Another key

factor is the amount of wasted wood that is involved in this

process.  Since mechanical pulping is much more efficient (90%

percent as compared to around percent), there would be an

additional amount a deforestation involved with the chemical

process. 

     There are other trade-offs for each type of production.  The

mechanical process requires less capital cost (overhead), and is

less reliant on complex technologies, but is also more labor and

energy intensive than the chemical process.  Even here, there are

sub-sets of trade-offs.  The chemical process is self sustaining,

using the leftover pulp product as a fuel.  However, the yield of

the chemical process is much lower than with the mechanical process

(50 percent for the chemical, and 95 percent for the mechanical). 

Emissions from the pulping process are in the form of sulphides,

with the chemical process producing a wide variety of sulfur

by-products.  In contrast, the TMP emits only sulphur dioxide, and

a small amount of organic pollutants from the refiner vents.  The

main pollutants are dispersed wither through the air or by nearby

water sources.  Dioxin is a leading by-product of the chemical

process which has devastating effects on the local ecology, as well

as secondary effects on humans who consume food/water products from

nearby areas.

     The top 15 firms in the United States and Canada account for

57 percent of the world pulp production.  Environmental issues

stemming from the pulping process, as well as a host of other

industrial contaminants have been tackled by the Clean Air act of

1970, and subsequent environmental regulations.  This is

significant since these measures take on the bulk of the industry,

and can be more effectively regulated.  Stricter standards on the

types, and amounts of pollutants that can be released in the air

and water have gone far to clean up both the chemical and

mechanical pulping facilities.  Filters, technological advances in

the processes themselves, and the types of chemicals used are all

outcomes of stricter legislation.

3.        Related Cases:

     Keyword Clusters 

     (1): Trade Product            = PULP

     (2): Exporter                 = USA

     (3): Environmental Problem    = Pollution Land [POLL]

4.        Draft Author:  Tyler Shields

B.        LEGAL Cluster

5.        Discourse and Status:  Agreement and INPROGress

6.        Forum and Scope:  MULTIlateral 

7.        Decision Breadth:  Around 100

8.        Legal Standing:  NGO

     Often national environmental regulations play a role in

determining how much chemical based pulp products are allowed. 

Specifically, the US, Canada and Europe have created legislation

that covers the emissions from the pulp industry.           

C.        GEOGRAPHIC Cluster

9.        Geographic Locations

          a. Geographic Domain:    GLOBAL

          b. Geographic Site:      GLOBAL

          c. Geographic Impact:    GLOBAL

10.       Sub-National Factors:  NO

11.       Type of Habitat:  TEMPerate

     However, raw materials may be imported for refinement.

D.        TRADE Cluster

12.       Type of Measure:  Regulatory Standard [REGSTD]

     There is no universal standard that prohibits chemical

pulping, however, there may be some national restrictions on

chemical pulp imports.  Due to its efficiency, TMP has been more

widely used in developed countries, while some environmental

control policies have also influenced this.

13.       Direct vs. Indirect Impacts:  INDirect 

14.       Relation of Measure to Environmental Impact

     a.  Directly Related:         YES  PULP

     b.  Indirectly Related:       YES  WOOD

     c. Not Related:               NO

     d. Process Related:           YES  Pollution Land [POLL]

15.       Trade Product Identification:  Wood PULP

16.       Economic Data

     Industry output is around $2 billion per year

and employment is 600,000 in the United States and Canada (about 70

percent of the industry).

17.       Impact of Measure on Trade Competitiveness: LOW

     World totals for pulp production favor the chemical process by

roughly 3 to 1.  Pulp producers outside of the US and Canada

consist of only 30 percent of the world market.  This figure is

around $600 million per year.  Only 30 percent outside of the

United States and Canada, however, the trade in paper products

(newspapers, magazines, and other end products), is a huge world

market.  Currently only about 30 percent of the pulping process is

mechanical, so the price effect is relatively small.  Once the

mechanical process becomes more entrenched in developing countries,

along with the United States and Canada, the price effects will

impact the chemical pulping market.  The technology for the

mechanical process is relatively less expensive than the chemical,

and new technologies have only bloomed since the mid 1970s.  This

gives developing countries an advantages since the plants that they

create will be directly competitive with the major producers.

18.       Industry Sector:  WOOD

19.       Exporters and Importers: US and CANADA  

     The main exporters of the pulp are the United States and

Canada, simply from their dominance in the market (see USCANADA case.  Developing nations in South

America and Southeast Asia also compete for export markets.

E.        Environment Cluster

20.       Environmental Problem Type:  Pollution Land [POLL]

21.       Name, Type, and Diversity of Species

          Name:          Trees

          Type:          Plant/Dicot and Fir

          Diversity:     NA

22.       Resource Impact and Effect: MEDium and Structure

                                             [STRCT]

     The overall impact will depend on the rapidity and size of the

change over to  the mechanical process.  However, most developing

countries embarking on pulp production will most likely use the

mechanical process for the reasons described above.  This will

positively increase the ratio of the mechanical process as more

firms enter the market.

23.       Urgency of Problem:  LOW

24.       Substitute:  Conservation [CONSV] 

     TMP is in fact the substitute for the chemical process. 

F.        OTHER Factors

25.       Culture:  NO

26.       Trans-border:  YES

27.       Rights: NO

     Both phases of the pulping process are subject to trans-border

arrangements.  The shipping of the raw materials to processing

plants is one part, while the delivery of the final pulp product

constitutes the other part of the pulping industry.

28.       Relevant Literature