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ENVIRONMENT-SOUTH AMERICA: Writing on the Wall for Paper Industry

Marcela Valente

BUENOS AIRES, Aug 30 2006 (IPS) - Before printing out this article, carefully consider whether or not you really need a paper copy. According to a new report by Greenpeace Argentina, the growing demand for paper in industrialised countries is putting devastating pressure on natural resources like water and land in several countries in South America.

The situation in the global market for paper and the expansion of pulp production to Argentina, Brazil, Chile and Uruguay are the focus of the first part of the three-part report presented Wednesday in Buenos Aires, “The Escalation of Cellulose in the Region: Dirty Industry or Clean Production”.

Over the next few decades, there will be significant pressure to expand tree plantations and pulp factories to reach large-scale production in South America, warns the report, which is available in Spanish.

Greenpeace describes the paper pulp industry as “voracious and devastating to natural resources” with the methods it currently uses.

The production of cellulose or pulp, the raw material used to make paper, requires enormous quantities of water and energy, as well as vast extensions of land for monoculture tree plantations of fast-growing species, the environmental watchdog points out. The industry puts pressure on native forests, while releasing huge volumes of pollutants into the environment.

A plant that produces 300,000 tons of cellulose requires 50,000 hectares dedicated to tree plantations, says Greenpeace, which points out that the industry’s plans for the region involve the construction of factories that would produce at least one million tons of paper pulp a year.

Currently, 13 million hectares are dedicated to pulp tree plantations worldwide, 80 percent of which is in South America and – to a lesser extent – Asia.

The Greenpeace report goes on to discuss the conditions in which pulp and paper plants currently operate in Argentina and Uruguay, neighbouring countries that are involved in an ongoing dispute over the construction of two large cellulose factories on the Uruguayan side of a border river.

One of the plants being built near the Uruguayan town of Fray Bentos, on the Uruguay River, belongs to the Finnish company Botnia and will produce one million tons a year, and the other, belonging to Spain’s ENCE, will produce 500,000 tons.

According to Greenpeace, the increase in global demand for paper will require the construction of two new factories the size of Botnia’s per year.

Greenpeace says this is the time for Argentina and Uruguay to establish strict environmental standards and guidelines for the development of the industry, in order to ward off the environmental disaster that could occur in the event of uncontrolled expansion of the industry.

The report also repeats Greenpeace’s earlier call for the two countries to design a clean production plan based on chlorine-free and effluent-free processes, greater use of recycled paper, sustainable exploitation of forests, and the participation of local communities in decisions involving where the factories are to be built.

According to Greenpeace, it is not a question of rejecting investments, but of requiring smaller-scale operations, and sustainable production methods.

Juan Carlos Villalonga, the author of the report and Greenpeace Argentina director of campaigns, told IPS that “in the face of a flood, there must be limits, conditions and clear guidelines to avoid a disaster, and we are not currently seeing any of that” in the region.

Global paper consumption rose from 300 to 366 million tons a year from 2000 to 2005, and is expected to climb to 566 million by 2020, says the report.

It adds that the pulp industry must also grow to keep up with that demand, which is concentrated in North America, Europe, Japan and, more recently, China.

The demand for bleached pulp is projected to grow from the current 45 million tons a year to 74 million by 2020 – “a figure that gives an idea of the devastating pressure that will be put on South America,” said Villalonga.

The major consumers of paper were traditionally also the big producers of cellulose and paper. But in the last 15 years, a division has occurred, and consumption and production of paper is more heavily concentrated in the industrialised North, while pulp production is increasingly shifting to the developing South.

Of global production of wood pulp, which totaled 192 million tons last year, North America produced 40 percent, Europe 29 percent, Asia 22 percent, and Latin America nine percent.

But South America is emerging as an especially attractive region for the expansion of pulp production due to its climate – suitable for fast-growth tree species – the low cost of labour, tax breaks and other government incentives for investment, and less stringent environmental norms, says Greenpeace.

According to the report, Nils Grafstrom, president of the Latin America Division of the Swedish-Finnish forestry products giant Stora Enso, said the best places for the production of cellulose today are southern Brazil and Uruguay.

He also said timber in these two countries, as well as in Argentina and Chile, costs half of what it costs in northern Europe.

South America is one of the regions preferred by corporations in the world today for large tree farms, the installation of new pulp plants, and the expansion of existing plants, says Greenpeace.

These plants are conceived of on a much larger scale than the ones operating in Europe, where output averages 210,000 tons a year.

While larger-scale production cuts costs, it also adds risks, says Greenpeace. On the other hand, smaller-scale production would allow lower levels of pollution and smaller risks, it underlines.

The report also points out that Latin America is not a major consumer of paper. In 1990, the region accounted for just five percent of global demand, a share that had barely grown, to six percent, in 2005.

By contrast, the region accounted for nine percent of global pulp production and 18 percent of total pulp exports in 2005, and is expected to account for 25 percent of international pulp exports by 2010. Meanwhile, only 1.2 million of the 14.6 million tons of pulp to be produced in the region in 2010 will go to the domestic market.

Greenpeace warns that if global consumption of paper does not level off and become more balanced, it will be impossible to avoid an expansion of the industry that will be devastating for the environment and for many communities around the world.