The US paper industry is one of the three non-fossil-energy industries that will be affected under the Clean Energy Jobs & American Power Act; the climate bill being attempted in the Senate; to regulate the industries that emit over 25,000 tons/yr of carbon dioxide. Cement-making and steel production are the other two.

So it would be instructive to see how the European paper industry has fared under the Kyoto-triggered EU Emissions Trading System; providing a real world test-case. If faced with the same carbon constraints as European counterparts; how might our paper industry in the US adapt and evolve ?

If the European experience is anything to go by; they’ll do fine, it seems.

According to the Confederation of European Paper Industries’ 4th annual report; compared with their Kyoto base year of 1990, the European paper industry has reduced its CO2 emissions per ton of paper produced by 42%.

How did they do it?

More than half of the energy consumed by the industry came from biomass (55%) , with nearly all of the remaining 40 percent from natural gas. They also reduced their energy use by upping their recycling rate to well over 66%, and cut their primary energy use 2.9 percent from the year before.

But the big change?

About 94% of the electricity for the EU paper industry is now produced using combined heat and power (CH&P) systems. This is an underused resource in the US. This supplies both electricity and heat from one input, (usually gas or waste heat recycled within the plant). By doubling the output, that effectively halves the CO2 emissions per kwh of electricity use.

The American equivalent of the EU Emissions Trading System passed the House as Waxman-Markey in the summer. The Senate version; the Clean Energy Jobs & American Power Act CEJAPA will only regulate facilities emitting over 25,000 tons of carbon pollution annually, equivalent to 130 railway cars of coal.

People who breathe fall well below the 25,000 ton threshold. So do office buildings, apartments, homes, malls and stadiums; in fact 98% of America’s businesses and farms are not regulated.

But for the few industrial heavy emitters, I’d expect to see the companies that have pioneered CH&P systems in the US start to see some new business, if we pass similar climate legislation here. Companies like RED and ORMAT.

Kyoto legislation worked. The EU is on track to meet – and actually exceed the carbon emissions target it set of 8% reductions below 1990 levels by 2012, the Commission’s annual progress report on emissions shows. The EU-15 (the first fifteen signatories) will meet and exceed their initial target to get 8% below 1990 levels and 10 of the remaining 12 member states will meet and exceed their reduction goals of 6% below 1990 levels by 2012.

This contrasted with economic growth of around 44% over the same period, through 2007. Currently, as of 2009; EU-27 emissions are now estimated to be 13.6% lower than the base year level 1990.

Only two EU members; Cyprus and Malta set no emissions target. Cyprus’ main export is potatoes and citrus fruit. Malta is 100% oil powered.

The Kyoto legislation legislation the rest of the EU signed was designed to increase the adoption and development of renewable energy like solar and wind that produce energy without carbon emissions, while discouraging the use of fossil fuels like oil and coal.

This move to more renewable energy, along with legislation designed to increase forestry activities that absorb carbon from the atmosphere made the reductions possible.

Not only have they met their goals – but their total EU-27 emissions (from all 27 member states) have easily exceeded them. Their overall EU emissions were already 5.0% – 12.5% lower than base year levels by 2007; before the global economic apocalypse last year.

According to the latest figures the percentages were attributable:

1. 6.9% of the reduction came from policies and measures already implemented ¹ and ² .
2. 2.2% came from International emissions trading, the Clean Development Mechanism and the Joint Implementation instrument (emission-saving projects carried out in third countries).
3. 1.0% came from planned afforestation and reforestation activities, which create biological ’sinks’ that absorb carbon dioxide from the atmosphere.
4. 1.4% came from buying allowances and credits via The European Emissions Trading System.

Additional policies and measures under consideration would, if fully implemented, bring further cuts of up to 1.6%.

These findings are in keeping with The German Marshall Fund Study (pdf) of Climate Policy and Industrial Competitiveness (previous story) earlier this year that found that European legislation was effective in incentivizing the move to renewable energy and efficiency measures that had the result of lowering European carbon emissions while not hurting their economy.

Written by Susan Kraemer