Assessing the value of pulp mill biomass savings in a climate change conscious economy

Pulp mills use significant amounts of biofuels, both internal and purchased. Biofuels could contribute to reach greenhouse gas emission targets at competitive costs. Implementing process integration measures at a pulp mill in order to achieve pulp production with less use of energy (biofuels) has not only on-site consequences but also off-site consequences, such as substitution of fossil fuels elsewhere by the saved pulp mill biofuels, and less on-site electric power generation. In this paper a method, a linking model, is suggested to analyse pulp mill biofuel saving measures when carbon dioxide (CO2) external costs are internalised. The linking model is based on equilibrium economics and links information from CO2 constrained energy market future scenarios with process integration measures. Pulp mill economics and marginal energy market CO2 response are identified. In an applied study, four process integration measures at a Swedish pulp mill were analysed using five energy market future scenarios emanating from a Nordic energy model. The investigated investment alternatives for biofuel savings all result in positive net annual savings, irrespectively of the scenario used. However, CO2 emissions may increase or decrease depending on the future development of the Nordic energy market.