www.fpinnovations.ca

Wood energy developments in the UNECE region

October 09, 2007 Geneva, CH

Christopher Gaston, Ph.D.Director, Markets & EconomicsFPInnovations

FER

IC

FO

RIN

TEK

PAPR

ICAN

FIBR

E CE

NTRE

Toward an Integrated Innovation System

April 1, 2007

ManufacturingProcesses

ManufacturingProcesses

Forest Operations & Harvesting

The Forest Sector Value ChainThe Forest Sector Value Chain

Forest Management

GENO

ME

Pulp & PaperPulp & Paper

Wood ProductsWood Products

MarketsBuilding materialsIndustrial products

MarketsPulp & Paper

Packaging, etc.

Fibre characterization

Wood characterization

FERIC

Paprican

Forintek

CFS Fibre Center

Market &Product

Diversification

Market &Product

Diversification

Current Industry

Sustainable Forests

Commodity Wood Products Commodity Pulps

& Papers

Market Value & ROI decreasing

Future Industry

Sustainable Forests

Commodity Wood Products Commodity Pulps

& Papers

Engineered Composites & SystemsSustainable Construction

Appearance Products

Value Added Pulps & Papers

‘Bioproducts’&Bioenergy

Now:

Future:

Market Value & ROI decreasing

Bolt-on PlantCo-products

Four Flagship Innovation Programs

Value ChainOptimization

Building & LivingSolutions

Bioenergy, Chemicals &

AdvancedBioproducts

Next GenerationPulps & Papers

Market driven R&D

StrandsStrands ResidueResidue SoftwoodSoftwoodLumberLumber

HardwoodHardwoodLumberLumber

SoftwoodSoftwoodVeneerVeneer

HardwoodHardwoodVeneerVeneer

Shakes/Shakes/ShinglesShingles

OSB Dimension

TreatedEG Panels

I Joist Flanges

LVL

LVL Treated

Glue Lam Stock

OSL MSR

Boards

PlywoodPlywood Untreated

Boards

DimensionParts/Factory Veneer Sheets

Veneer Sheets

FJ

PSLTimbers

Bark BoardWood Cement

Fibre MatPlastic Wood

Other Wood Comp.

Pulp&PaperParticle Board

Bailed Fibre

MDF

Home Centres/Warehouse Pro Dealers Other Retail Direct

Building Systems

Wholesale/Dist.

HDF

MMAARRKKEETT

CHANNELS

R&R

Contractor

Residential

Single Family ManufacturedMultifamily

Non Residential Industrial

FurnitureDIY

StrandsStrands ResidueResidue SoftwoodSoftwoodLumberLumber

HardwoodHardwoodLumberLumber

SoftwoodSoftwoodVeneerVeneer

HardwoodHardwoodVeneerVeneer

Shakes/Shakes/ShinglesShingles

OSB Dimension

TreatedEG Panels

I Joist Flanges

LVL

LVL Treated

Glue Lam Stock

OSL MSR

Boards

PlywoodPlywood Untreated

Boards

DimensionParts/Factory Veneer Sheets

Veneer Sheets

FJ

PSLTimbers

Bark BoardWood Cement

Fibre MatPlastic Wood

Other Wood Comp.

Pulp&PaperParticle Board

Bailed Fibre

MDF

Home Centres/Warehouse Pro Dealers Other Retail Direct

Building Systems

Wholesale/Dist.

HDF

MMAARRKKEETT

CHANNELS

R&R

Contractor

Residential

Single Family ManufacturedMultifamily

Non Residential Industrial

FurnitureDIY

$ 22.1 billionCanada exports

$ 19.0 billion

Evolving markets… evolving products

Evolving markets… evolving products

Incremental improvements

New launches

Time

Prof

itabi

lity

Commodity

Time

Western Canada pellet mill

Policy drivers for wood energy production

• EC’s “Renewable Energy Roadmap” with a target of 20% by 2020 (12% originally proposed for 2010)

• U.S. target to reduce gasoline usage by 20% by 2017, and to make cellulosic ethanol cost competitive with corn by 2012

• Wood based electric power received support in 24 U.S. states’ Renewable Portfolio Standards

• Sustainability of existing bioenergyincreasingly under scrutiny (e.g. palm oil)

Wood Energy by Country

Sources of Wood Fuel—Europe

Usage of Wood Fuel—Europe

Global log consumption

Sources of Wood Fuel—North America

Uses of Wood Fuel—North America

Production / Consumption of Wood Pellets

Russian Pellet Industry

Bioenergy & Fuels:

• Nexterra & Tolko

Net contributor of EnergyNet contributor of Energy

Mountain Pine Beatle Attack

0 10 20 30 40 50 60 70 80

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Nova Scotia

Prince Edward Is.

Newfoundland

Million Cubic metres

MPB time projections

BC log harvest

Drops in Harvests in Eastern Canada

20% reduction in Québec (approx. 6 million m3)15% reduction in Ontario (approx. 3 million m3)

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