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A Papermaker’s Perspective on Renewable Energy Labeling

Laura M Thompson, PhDDirector, Technical Marketing and Sustainable DevelopmentSappi Fine Paper North America

SAPPI FINE PAPER : SUSTAINABILITY

A subsidiary of Sappi Limited HQ in Johannesburg, SA. $7.3 billion in sales in 2011. 14,900 employees, operating on four continents in 8 countries with customers in over 100 countries around the world.

Core business in NA is coated fine paper For communications (direct mail, catalogs, magazines, brochures)

World leader in release papers For decorative and functional texture applications (coated fabrics, solid surfaces and functional films)

Sappi is a world leader in chemical celluloseUsed in textile and consumer good applications (viscose/rayon, non-wovens)Sappi’s Cloquet, MN pulp mill is converting to chemical cellulose in 2013

Sappi Fine Paper North America (SFPNA)

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Customers Employees Communities

Three pillars of sustainability

People Planet Prosperity

Three key environmental issues

ResponsibleForestry

Energy and Emissions

Recycling and Recycled Fiber

Three key stakeholder groups

Our view of sustainability “from 60,000 feet”

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Many of our customers seek assurance through certification programs – and like to use on-product labels

Responsible ForestryFSC, SFI, PEFC

Energy and EmissionsGreen-e

Recycling and Recycled Fiber“Please Recycle” and Recycled Content

Sappi sells B2B through merchant distributionWe sell “white paper” – our customers print logos

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From Sappi’s On Product Label Guide

From Sappi Fine Paper North America’s 2011 Sustainability Report

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From Sappi Fine Paper North America’s 2011 Sustainability Report

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A few words on Green-e certification

Q: If our Somerset Mill has 85% renewable energy what portion of the product line can be supported with Green-e claims?

a. 85%b. 100%c. We only have enough credits for Opusd. We only have enough credits for Flo Sheets and Opuse. None of the above

A Few Sample Slides from Sales Training

SAPPI FINE PAPER : SUSTAINABILITYA high level look at energy consumption

BlackLiquor

Oil orNat Gas

SludgeBarkWoody Biomass

PurchasedElectricity

The Mill Boundary:Over 85% or our totalenergy is renewable

Renewable

Fossil Fuels

We use oil at Somerset and natural gas at Cloquet

SAPPI FINE PAPER : SUSTAINABILITYA high level look at energy consumption

Recovery Boiler

Multi-fuel Boiler

BlackLiquor

Oil orNat Gas Lime Kiln

SludgeBarkWoody Biomass

Electricity

Steam

Turbines

• Only electricity generated from steam from the recovery boilers is certified as green-e• Our green-e claims have nothing to do with purchased electricity • We are not buying RECs, we generate them on site and consume them to make product

claims

Steam

PurchasedElectricity

SAPPI FINE PAPER : SUSTAINABILITY

We source wood and fiber responsibly- but it is not all certified

We generate and consume a great deal of renewable energy

- but it is not all certified

There are credit systems involved in both cases – the programs allow us to make claims on products by applying credits in accordance with the rules of the program

Green-e and the analogy with wood certification

SAPPI FINE PAPER : SUSTAINABILITY

We face the challenge of differentiating between total renewable energy and electricity derived from renewable resources

Communication efforts span multiple platforms:Printed collateral – e.g. brochures, reportsWebsite - sappi.com/eqVideosSocial Media (blog, Twitter)Presentations

Communication efforts supported by extensive training

Communicating about renewable energy

13 SFPNA Marketing 2012

+Celebrating the story of the Somerset Mill

+Dual sided with unique foldSide 1 – Papermaking and recovery process with callout featuresSide 2 – Imagery with product and mill achievement information

+QR codes link to videos on sappi.com/eQ

The Somerset Mill: A Story of Sustainability

Another Green-e logo!

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Renewable EnergyPower Generation

BiomassGeothermal

HydroelectricSolarWind

Renewable Energy Certificates

Non-RenewablePower Generation

CoalOil

Natural GasNuclear

RegionalPower Grid

Electricity to Consumer

Electricity REC

+ = Renewable Energy

$Electricity

to Grid

$Electricity

to Grid$

Renewable Energy Certificate (REC):

One megawatt of energy produced by a renewable fuel, as certified by some third party agency, against a standard

The REC is sometimes referred to as the environmental attribute bundle of renewable electricity generation

There are two distinct REC markets:

Voluntary RECs: certified by a third party and sold to voluntary buyers who wish to establish some marketing or environmental claim against a company objective; i.e because they want to

Compliance RECs: comply with the Renewable Portfolio Standard (RPS) requirements of a particular state; i.e. because they have to

The Green-e Standard

Certification is important because it assures that the energy:

Is from new projectsRECs support new projects built for the voluntary market, not to satisfy a state or federal requirement.

Is verifiedTo ensure that they live up to claims and that customers are getting what they paid for

Has not been double countedCertified RECs sold to a consumer can not be counted toward an RPS. Renewable energy must only be attributed to the entity that purchases the REC

Our use of Green-e RECs is somewhat unique

We are an onsite generator of RECs (we don’t buy them)

And we don’t sell them (although we could)

We consume our own RECs and make claims in the marketplace about our generation and consumption

We have several product lines that qualify for the re:print program

The Green-e re:print program

Certifies printers and paper lines that use renewable energy

When a company produces a print job like an annual report, company brochure, or newsletter they can display the re:print logo on the printed piece

CERTIFED PAPERPaper made using 100% certified renewable electricity

CERTIFED PRINTINGPaper printed using 100% certified renewable electricity

Green-e Certification