Energy Use and GHG Emissions in the Quebec Pulp and Paper Industry, 1990–2006

Abstract

Greenhouse gas (GHG) emissions of the Quebec pulp and paper industry fell by more than 30 percent from 1990 to 2006. We use an energy demand model to analyze the contributions to this decrease of energy prices, product mix, technological change, and biomass use. The product mix is made of pulp, and cardboard, and paper. Pulp is an intermediate product for the industry, but not necessarily so for mills; vertical integration varies across mills and presents different opportunities to transfer heat between stages of production. Chemical and mechanical pulping processes are used to form two groups of pulp and paper mills. We find that changes of product mixes contributed the most to reduce GHG emissions, followed to a lesser extent by increases of fuel prices relative to electricity. The estimated electricity and fuel price elasticities are low. However it is still possible to significantly reduce GHG emissions by substituting natural gas for heavy fuel oil; such a substitution could be brought about by a small change of their relative price.