2012 Integrated report - Sappi

Sustainability continued
Our key sustainability drivers continued
Management of biodiversity takes place in terms of internationally
accepted, independently verified forest certification systems
PEFC, SFI ® and FSC, all of which make provision for effective
biodiversity management. For example, Principle 6 of the FSC’s
‘Principles and Criteria’, states: “Forest management shall
conserve biological diversity and its associated values, water
resources, soils, and unique and fragile ecosystems and
landscapes, and, by so doing, maintain the ecological functions
and the integrity of the forest”. PEFC certification is dependent
on forest biodiversity being “maintained or enhanced”, while the
SFI ® guidelines stipulate the protection of biodiversity.
In the year under review, Sappi Forests undertook an analysis
of the supply of ecosystems services from their landholdings
and the importance of these to stakeholders.
This is described in the expanded ‘Key sustainability
drivers’ section of our group sustainability report, available
at www.sappi.com.
Energy
As pulp and paper production is an energy-intensive process,
the cost and availability of energy are key considerations for
Sappi. Energy costs currently account for just under 11% of
cost of sales. We mitigate this risk by focusing on reducing
specific purchased energy, improving the energy efficiency
of our mills, increasing our use of renewable energy and selling
surplus electricity.
Renewable energy
We have a major advantage over other industrial companies in
that globally, 50.3% of our energy is derived from renewable
sources, namely: black liquor – a by-product of the pulping
process, sludges (in North America and Europe) and biomass.
Sales of power
Many of our mills have excess power which we sell on to
third-party customers. In FY2012, in Europe we sold
554,100MWh (1,994,700GJ) and in North America 130,230MWh
(468,800GJ). In South Africa, the state power utility Eskom has
established a scheme that allows independent power producers
to supply power to the grid at levels higher than they would
be charged for power. In South Africa, in FY2012 we sold
32,200MWh (115,941GJ) to Eskom, from Ngodwana Mill.
Emissions – regulatory developments
Our extensive use of renewable energy results in a high degree
of energy self-sufficiency and lower levels of greenhouse gas
emissions from fossil fuels. We believe that emissions from
renewable energy should not be subject to carbon tax.
Europe
Carbon taxes
The carbon tax proposal formulated by the European
Commission in 2010 has yet to be agreed to by the 27 member
states. The current proposal by the European Commission
would charge firms between €4 and €30 per ton of CO 2 .
Several European countries have enacted national carbon
taxes including Denmark, Finland, Ireland, the Netherlands,
Norway, Slovenia, Sweden, Switzerland and the UK.
EU ETS
Launched in 2005, the European Union Emissions Trading
Scheme (EU ETS) works on the ‘cap and trade’ principle.
The scheme now covers the 27 countries of the European
Union, and three non-European Union members.
Energy costs as a percentage of cost of sales
(%)
Renewable energy breakdown
(%)
16
14
12
10
8
6
4
2
71.9%
11.2%
15.0%
1.96%
0
08 09 10 11 12
– South Africa – Europe – North America – Global
Comment: Between 2011 and 2012, in Europe, the cost of sales
decreased due to lower variable costs, while energy costs remained
more or less stable. In North America, energy costs remained stable
while in South Africa, the cost of coal increased by 13.3%/GJ and
electricity generated by Eskom by 19.6%/kWh in 2012.
Own biomass
Purchased biomass
Sludges and other
Black liquor
22