Investments at bleached kraft and soda mills increase U.S. industry’s elemental chlorine free (ECF) pulp capacity

U.S. Bleached Pulp Mills Move Towards Compliance of Phase I of Cluster Rule

The Environmental Protection Agency (EPA) is administering the Cluster Rule under both the Clean Air Act and the Clean Water Act. New and existing facilities that manufacture bleached papergrade kraft, soda, and sulfite pulps must meet Phase I standards. Specifically, the EPA has set effluent limits for toxic pollutants in the wastewater discharged during the bleaching process and in the final discharge from the mill. These limits are based on substituting chlorine dioxide for chlorine in the bleaching process. The use of sodium hypochlorite must also be eliminated from bleaching sequences as well. Phases II and III which specify water rules for other pulp mill categories are expected to follow in the next year or two. Phase I also includes final air regulations based on maximum achievable control technology (MACT).

The U.S. industry is nearly halfway through the three-year timeframe to bring their operations into compliance with Phase I. This article reviews the estimated costs to bring U. S. operations into compliance with the new regulations and progress made in eliminating chlorine from the kraft and soda pulp bleaching processes.

PULP MILL CLOSURES. Many industry observers expected that the Cluster Rule would bring about the permanent closure of a number of pulp mills as the expected cost to bring some operations into compliance would be prohibitive. Table 1 lists all announced U. S. kraft, sulfite, and semichemical pulp mill closures announced to date since publication of the Cluster Rule.

Bleached kraft pulp capacity accounts for 1.62 million tons of total pulp capacity to be permanently shut while an additional 1.36 million tons of unbleached kraft pulp capacity is also expected to be permanently shut.

A number of companies have specifically cited Cluster Rule compliance expenditures as a primary reason for the pulp mill shutdowns. Kimberly-Clark Corp. (K-C) chose not to invest an estimated $260 million in compliance expenditures at its operations in Mobile, Ala. Instead, K-C is investing $100 million to install a deinked pulp line to supply fiber for the tissue mill. The closure of the kraft pulp mill by Sappi Fine Paper in Westbrook, Maine, was partly due to the pending $50 million required for Cluster Rule compliance. Sappi will purchase market pulp to replace its pulp mill production.

Donohue Industries Inc. decided not to invest an estimated $60 million to $80 million to bring the bleached kraft pulp mill at the former Champion International Inc. newsprint mill in Sheldon, Texas, into compliance. Donohue opted to invest $73 million to replace bleached kraft pulp and stone groundwood pulp production with deinked pulp, boosting the recycled fiber content of newsprint produced at the mill from 40% to 85%. Donohue will also spend $52 million to bring the kraft pulp operation at its Lufkin, Texas, mill into compliance.

BILLION DOLLAR PRICE TAG. At the time of signing in mid-November 1997, the EPA estimated that the industry would need to invest approximately $1.8 billion in capital expenditures to comply with the Cluster Rule and that an additional $277 million per year in operating expenditures would be required. However, the American Paper & Forest Paper Assn. (AF&PA) estimated the cost of compliance would total closer to $2.6 billion with an increase in annual operating expenditures of $273 million.

A current tally of projected capital expenditures required by 30 companies to comply with the Cluster Rule legislation finds that an estimated $2.7 billion to $2.9 billion will be invested in 1999 and beyond to meet the stricter environmental standards. A breakdown of estimates by individual companies is listed in Table 2.

This range does not include spending already completed through 1998. It also does not include spending by all affected operations.

This compares to a tally compiled in April 1998 that estimated that over $3.2 billion would need to be invested from 1998 forward. Unfortunately, most companies have not reported actual 1998 investments for Cluster Rule compliance projects.

Georgia-Pacific Corp. (G-P) has the highest estimate of compliance spending with $550 million targeted to be spent through 2006. The company expects to spend approximately $300 million in 1999 and 2000, following spending of $75 million in 1998. G-P still has three bleached kraft pulp mills that are in the process of being converted to elemental chlorine free (ECF) production—Ashdown, Ark., Crossett, Ark., and Palatka, Fla.

Smurfit-Stone Container Corp. has estimated expenditures of $310 million through 2002, including the ECF conversion of its two remaining bleached kraft pulp operations in Brewton, Ala., and Panama City, Fla. Westvaco Corp. and Bowater Inc. each expect to invest up to $150 million to bring their operations into compliance by 2005 to 2006 while Fort James Corp. has estimated expenditures of $100 million through 2002. However, Westvaco is the only company of the three that has completed the conversion of all of its operations to ECF production.

International Paper Co. (IP) has estimated that it will invest $194 million through 2001 for Cluster Rule compliance projects. The company completed the conversion of its bleached chemical pulp operations to ECF production several years ago. However, the two bleached pulp mills in Franklin, Va., and Eastover, S. C. acquired with IP’s April 1999 purchase of Union Camp Corp. still require expenditures to convert production to ECF.

Alliance Forest Products Inc. estimates expenditures of $55 million through early 2001 at its U.S. pulp and paper mill in Coosa Pines, Ala., including projects to replace the unbleached pulp screening and washing system and an incineration system for non-condensable gases. The company recently announced a $370 million investment plan for the mill, including ending hardwood kraft pulp production, boosting deinked pulp capacity and construction of a new cogeneration plant. The mill will continue bleached and semi-bleached softwood pulp production.

CONVERSION TO ECF. The Alliance for Environmental Technology (AET) has tracked U.S. production of ECF and totally chlorine free (TCF) bleached chemical pulp production since 1990, including kraft, soda, and sulfite pulps (Figure 1).

FIGURE 1: U.S. production of ECF and TCF bleached chemical pulp.

In 1998, 17.3 million tons of ECF and TCF pulp were produced out of total bleached chemical pulp production of 30.0 million tons according to AET, accounting for 57.7% of total production. As can be expected, ECF and TCF pulp production has moved steadily upward with larger increases reported in 1995 and 1997. However, TCF pulp production has remained a very small part of total bleached chemical pulp production, accounting for only 200,000 tons each year since 1993.

An exclusive Pulp & Paper survey of every bleached kraft and soda pulp mill operation found that 70.4% of total 1999 U. S. capacity of 33.36 million tons has been converted to ECF capable production as of August 1999, approximately 23.5 million tons of annual capacity (Figure 2).

FIGURE 2: Status of U.S. bleached kraft pulp bleaching capability.(1)

An additional 8.7 million tons, or 26.1% of capacity, has not been converted to ECF production. The remaining 3.5% of calculated 1999 capacity, approximately 1.17 million tons, will be permanently shut down in 1999 through 2001 and has been listed in Table 1.

Nearly all companies that have bleached pulp operations that are not currently ECF capable confirmed plans to convert production to meet Cluster Rule regulations with most work currently underway. However, one company reported that it is still exploring options for one of its bleached kraft pulp mills with the possibility that it will be closed instead of converting it to ECF production.

There appears to be a significant discrepancy between the 23.5 million tons of bleached kraft and soda pulp capacity that is ECF capable and the 17.3 million tons of ECF and TCF bleached chemical pulp production in 1998 as reported by AET. This discrepancy is due to the fact that while 23.5 million tons of bleached kraft pulp capacity can be produced ECF, not all mills that are ECF capable are currently operating ECF. A number of mills are continuing to use some chlorine in the first bleaching stage for part or all of its production due to lower operating costs while still meeting all current environmental regulations. Additionally, a number of mills have completed the conversion to ECF production in 1999, including Crown Vantage Inc., Eastern Paper Co. Inc. and Plainwell Shasta Paper Co.

Table 3 lists all U.S. bleached kraft and soda pulp producers with an annual capacity of more than one million tons. These nine companies account for approximately two-thirds of total bleached kraft and soda capacity. As previously mentioned, IP, G-P, and Fort James still have operations that must be converted to ECF production. Other large producers with mills to convert are Champion and Boise Cascade Corp.