Breakthrough: Corporate South Africa in a Green Economy

11. Addressing climate change through resource efficiency and combined heat and power systems at Mondi

209 Addressing climate change through resource efficiency and combined heat and power systems at Mondi Madeleine Fombad and Godwell Nhamo 11 ABSTRACT There are many green economy initiatives that emerged from the Mondi case study. The initiatives fall within two key thematic areas, namely: forestry and climate change, as well as aspects relating to environmental performance. The flagship breakthrough for the group, however, was identified as addressing climate change through resource efficiency and combined heat and power systems. This initiative resulted in electricity self-sufficiency at 93 per cent across the group globally with all of its own electricity generated by combined heat and power. Other green economy initiatives that emerged include having all plantations in South Africa managed sustainably and verified by the Forestry Stewardship Council Certification, and having 33 per cent of fibre consumed across the group coming from recovered fibre. INTRODUCTION This chapter examines the concerted contribution of Mondi, one of the two major South African paper and pulp industry players in its transition to a low carbon and greener company. Mondi’s breakthrough is realised by the manner in which the group addresses climate change through resource efficiency and combined heat and power systems. The Mondi group first considered the risk and opportunities posed by climate change in 2005 when it set a target to reduce both specific energy consumption and CO2 emissions by 15 per cent in 2014. Between 2004 and 2012, specific GHG emissions were reduced by more than 25 per cent against a 2004 base year.1 This has been achieved mainly through resource efficiency and combined heat and power systems. The group also achieved 93 per cent electricity self-sufficiency across all material operations.2 Chapter 11 210 The rapid industrialisation of developing economies like Brazil, China, India, Mexico, and South Africa has resulted in a significant consumption of paper and paper board products. In China, for example, paper and paper board consumption tripled between 1990 and 2003 to reach an all-time high of 48 million tonnes.3 Such huge consumption patterns of paper were evident as the green economy drive had not taken root. It was also estimated that by 2010 China’s annual consumption of fibre for paper production will reach 60 million tonnes or more. The pulp and paper industry is one of the most energy intensive manufacturing industries that significantly enhance South Africa’s Gross Domestic Product (GDP).4 Similar to other energy intensive manufacturing industries, this industry emits large amounts of greenhouse gases (GHGs) and consumes large quantities of water during the manufacturing process.5 GHGs are a confirmed source of global warming that leads to climate change. Hence, the latest challenge for the pulp and paper industry (Mondi included) is to go ‘carbon neutral’ and improve energy efficiency and GHG emissions by using natural resources in an efficient way. In this regard, major forest products associations are ‘doing something’ about their significant carbon emissions with The Forest Products Association of Canada (FPAC) having announced that by 2015 it would become the country’s first ‘carbon-neutral ’ sector.6 The World Business Council on Sustainable Development (WBCSD)7 understands carbon neutrality as a situation where ‘the net transfers of biogenic carbon to the atmosphere are zero’ – a carbon-cycle neutrality. The Confederation of European Paper Industries (CEPI) announced a 2050 roadmap to a low carbon bio-economy. The CEPI set an 80 per cent reduction in carbon emissions by 2050.8 The Energy Efficiency Strategy of the Republic of South Africa,9 that sets a national target for energy efficiency improvement of 12 per cent by 2015, and the National Energy Act,10 prioritise the importance of improving energy efficiency to save resources and environmental management. The main focus of the Mondi group is on integrated paper and packaging production and uncoated fine paper. In 2012 there were 25 700 people employed across 30 countries.11 The group’s revenue stood at 5,8 billion. Mondi owns and/or leases an estimated 305 952 hectares of land in South Africa, of which 66 per cent are under hard and softwoods. The group further leases and manages up to 2,41 million hectares of softwood boreal forests in Russia.12 The major business focus of Mondi includes the manufacturing of pulp and paper; packaging of paper, and the growing of wood. TRANSITION TO GREEN ECONOMY IN PULP AND PAPER INDUSTRY For one to...