Pulp Fiction - effects of climate control policies on the Swedish pulp and

Sammanfattning: Authors: Andersson, Carl-Johan and Löfstrand, Pontus Supervisors: Nilsson, Lars J. Department of Technology and Society, Environmental and Energy Systems Studies, Lund University. Yard, Stefan, Department of Business Administration, Lund University. Kling, Åsa, Vattenfall Utveckling AB. Issues: One reasonable effect of emissions trading is arising incentives for cutting fossil fuel usage. One effect of the Swedish tradable green certificates is revenues for electricity producers using renewable energy sources. The two instruments can be supposed to affect electricity prices. All these three matters are important to the pulp and paper industry. In order to adjust, a number of energy related technological changes can be carried out in the pulp and paper mills. Purpose: The purpose is to estimate changes in costs and revenues of an integrated sulphate paper mill and a TMP mill followed by new climate control policies and energy related improvements in the mills. Methodology: Literature studies and interviews were used to shape two plausible but extreme scenarios for prices on emission allowances, green certificates, electricity and raw material. Literature studies and interviews were also used to create two typical Swedish pulp and paper mills and a list of possible energy related improvements. The analysis was done through applying the two scenarios on the two case mills and the possible improvements. Conclusions: The pulp and paper industry is affected by climate control policies, directly via revenues from green certificates and partly by potential selling of emission allowances, but mainly indirectly through higher electricity price and under one scenario by higher prices of raw material. Threats as well as opportunities were found. The positive cash flow of a number of analyzed possible measures could alter the profit largely, compared to present profit and to profit/loss under the scenarios.