The Greening of Mississippi's Economy: the Manufacturing Sector
Increasing Employment in Mississippi
The Greening of Mississippi’s Economy: the Manufacturing Sector Part I - Food, Fibers, and Wood Products
August 2011 greenjobs.mdes.ms.gov
In 2009, Mississippi and Louisiana partnered to research economic development opportunities and workforce needs associated with the region’s green economy. Through a $2.3 million grant from the U.S. Department of Labor, a consortium of the Mississippi Department of Employment Security, Mississippi State University, Louisiana Workforce Commission, and Louisiana State University conducted an extensive study of economic activity that is beneficial to the environment. This and other research products were developed as part of that effort.
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i Table of Contents Description of Sector ...... 1 Introduction to the Green Component of the Food, Fibers, and Wood Products Manufacturing Sector ...... 2 Green Goods and Services ...... 4 Renewable Energy ...... 4 Energy Efficiency ...... 6 Greenhouse Gas Reduction ...... 6 Pollution Prevention and Clean-up ...... 6 Recycling and Waste Reduction ...... 6 Sustainable Agriculture, Natural Resource Conservation, and Coastal Restoration ...... 7 Education, Compliance, Public Awareness, and Training ...... 8 Green Business Practices ...... 9 Renewable Energy ...... 9 Energy Efficiency ...... 10 Greenhouse Gas Reduction ...... 11 Pollution Prevention and Clean Up ...... 11 Recycling and Waste Reduction ...... 12 Sustainable Agriculture, Natural Resources Conservation, and Coastal Restoration ...... 12 Education, Compliance, Public Awareness, and Training ...... 13 Economic Factors ...... 13 Public Policy ...... 14 Technology ...... 16 Job Growth and Workforce Development ...... 17 Key Players ...... 17 Notes ...... 20
ii Description of Sector The North American Industry Classification System (NAICS) describes the Manufacturing sector, NAICS 31 - 33, as engaged in the transformation of materials into new products through mechanical, physical, or chemical means. Manufacturing often takes place in plants, factories, and mills using specialized equipment. However, this sector also includes hand-crafted materials transformations taking place in homes, tailor shops, or bakeries. Most of the materials used by manufacturers are raw materials that are purchased from other industries such as agriculture, mining and quarrying, or other manufacturing units. Outputs from manufacturers may be utilized by end users or as feedstocks for other manufacturing processes.1 In Mississippi, this sector employs 137,579 people representing 12.7 percent of total nonfarm employment.2 In 2009, private entities in the Manufacturing sector were responsible for $16,182 million, or 16.9 percent of Mississippi’s gross state product.3 The state’s Food Manufacturing sector supports 18 percent of all manufacturing jobs in Mississippi and the Paper and Wood Products Manufacturing sector accounts for another 10 percent, while employment in the Petroleum, Chemical, and Plastics Manufacturing sector accounts for 11 percent of manufacturing jobs.4
The subsectors of the Manufacturing sector considered in this report are 311-316, 321, 322 & 337. The North American Industry Classification System defines those subsectors accordingly:
311—Food Manufacturing 312—Beverage and Tobacco Product Manufacturing 313—Textile Mills 314—Textile Product Mills 315—Apparel Manufacturing 316—Leather and Allied Product Manufacturing 321—Wood Product Manufacturing 322—Paper Manufacturing 337—Furniture and Related Product Manufacturing
The Mississippi Green Jobs Survey was conducted during the third and fourth quarters of 2010 as part of this research effort to quantify and characterize the green economy in Mississippi. The survey provides a baseline measure of green employment. The survey results show an estimated 17,360
1 primary green jobsa in Mississippi across all sectors, which represent 1.6 percent of Mississippi’s nonfarm employment. An estimated 32,300 support green jobsb raises the total number of jobs involved in green activity categories to 49,660 jobs or 4.6 percent of nonfarm employment. The survey found that Mississippi’s entire Manufacturing sector accounted for 3,813 primary green jobs and 2,378 support green jobs. These survey results reveal that 4.5 percent of jobs in the Manufacturing sector as a whole are green with 2.8 percent primary green jobs and 1.7 percent support green jobs.
Introduction to the Green Component of the Food, Fibers, and Wood Products Manufacturing Sector Because of the size and diversity of the Manufacturing sector, and because of the economic and environmental significance of certain sub-sectors of this sector, manufacturing is being addressed in three reports for the state of Mississippi. Refineries, chemical, plastics and rubber manufacturers are being considered together in one report and activities in the printing, nonmetallic mineral, primary metal, fabricated metal, machinery, computer and electronics, electrical appliance, transportation, and miscellaneous manufacturers industries are being considered in another. This report will focus on activities in the Manufacturing sector conducted by food and beverage, textiles, leather, wood and paper products, and furniture making industries, a group of industries that will be referred to as the food, fibers, and wood products manufacturing industries.
Mississippi’s food, fibers, and wood products manufacturing industries are supported by robust agricultural and forestry activity in the state. The Agriculture, Forestry, Fishing and Hunting sector is Mississippi’s largest according to the state’s Department of Agriculture and Commerce. It is a nearly $7 billion industry made up of 42,300 farms covering 11 million acres across all 82 counties. The state’s number one crop is poultry producing meat and eggs from 817 million birds on 1,478 farms in 2010. Forestry is the state’s second largest agricultural area consuming 19,600,000 acres of state land. Soy, corn and cotton represent the third, fourth and fifth largest crops. Mississippi is also known for its rice, catfish, cattle, hay, hog, horticulture, dairy, sweet potato, wheat and peanut production.5
a A primary green job is defined as one where more than 50 percent of an employee’s time is devoted to one of the seven green activity categories: renewable energy; energy efficiency; greenhouse gas reduction; pollution reduction and clean- up; recycling and waste reduction; sustainable agriculture, natural resource conservation and coastal restoration; and education, compliance, public awareness and training supporting the other categories. b Support green jobs are defined as those essential to an organization’s involvement in one of the activity categories, but not requiring more than 50 percent of an employee’s effort.
2 This abundance of high quality commodities is complemented by a mild climate, steady precipitation and easy access to an intermodal transportation network that provide benefits for both Mississippi’s growers and the manufacturers relying on their goods. These commodity and manufacturing strengths also make the state an ideal home for certain environmentally beneficial activities such as the development of advanced biofuels and other forestry-based renewable energies, as well as process improvements that can model for other regions the efficiencies possible when coordinating efforts between local industries.
This report will focus on the environmentally beneficial activities of the food, fibers, and wood products manufacturing industries in Mississippi in two major areas: goods and services and business practices. Discussions of the Manufacturing sector’s involvement in environmentally beneficial activities will be provided where significant involvement by the sector is found. As with other components of this project, green was defined based on seven green activity categories:
1. Renewable Energy 2. Energy Efficiency 3. Greenhouse Gas Reduction 4. Pollution Reduction and Clean-up 5. Recycling and Waste Reduction 6. Sustainable Agriculture, Natural Resource Conservation and Coastal Restoration 7. Education, Compliance, Public Awareness and Training Supporting the Other Categories
Each activity category includes: the research, development, production and distribution of a final good or service; the supply of unique parts or inputs to a final good or service; and production processes and business practices regardless of the final good or service produced. The table below indicates which environmentally beneficial categories will be featured in this report.
Sustainable Agriculture, Education, Pollution Recycling Greenhouse Natural Compliance, Renewable Energy Prevention & Gas Resources Public Energy Efficiency & Clean- Waste Reduction Conservation Awareness up Reduction & Coastal & Training Restoration Goods &
Services • • • • • • Business Practices • • • • • • •
3 Green Goods and Services The Food, Fibers, and Wood Products Manufacturing sector in Mississippi is contributing a number of products to local, national, and international markets that improve the environment or help to conserve natural resources particularly in renewable energy and recycled paper and furniture. This sector is providing new sources for advanced biofuels from what was formerly considered to be a waste product, creating paper, paper products, and furniture from recycled materials, and supporting environmental restoration through gifts, service, and specialty beverages.
Renewable Energy Mississippi’s food, fiber, and wood products manufacturers are producing renewably-sourced fuels alongside their traditional manufactured goods. Sugar cane processors; pulp, paper, and wood products manufacturers; and poultry producers are producing advanced biofuels, combustible compressed pellets, and the direct supply of energy as standalone goods.
Together agricultural producers and the manufacturers who transform their commodities account for a tremendous amount of potential for the creation of renewable, bio-based energy. One organization, the 25x’25 Alliance, a group of agricultural and forestry leaders, proposes that America’s farms, forests and ranches will be able to provide 25 percent of all energy consumed in the United States while continuing to produce affordable, abundant and safe food.6 Towards that end, Mississippi has taken steps to form a state-level organization of leaders promoting opportunities for farm-based renewable energy opportunities. A study by the University of Tennessee suggests that this goal is achievable and that Mississippi could see an economic impact of $11.4 billion and 92,000 jobs.7 In order for the feedstocks produced by these agricultural and forestry producers to be made suitable for renewable energy purposes they must be processed. Much of this processing takes place at food, fiber and wood product manufacturing establishments. Once agricultural commodities are made into traditional food or wood-based products the remaining unused portions of the plant or tree can be collected and repurposed into feedstocks for renewable energy.
Renewable energy feedstocks can come from a wide-range of agricultural products, wastes and byproducts that are collectively known as biomass. Biomass can include crops grown specifically for energy purposes, wood products, grasses, agricultural residues, food wastes, and even animal wastes. In 2009, just over half of the renewable energy consumed in the United States came from biomass.8 A report by Advance Mississippi graded renewable energy sources available in the state by its overall viability and current cost. According to the report wind and solar received “D” grades, hydropower and geothermal received “B”s and biomass was given an “A.”9 The Regional Strategy for Biobased Products in the Mississippi Delta reported that the use of biomass “provides opportunities in
4 Mississippi for new crop rotation options, revenue, and value-added processing income for farmers and foresters.”10
To promote and research the state’s biomass-to-renewable energy potential, Mississippi has established a number of support organizations. The Mississippi Technology Alliance has established the Strategic Biomass Initiative to promote businesses and near-term technology based on biomass in the state,11 the Mississippi Biomass and Renewable Energy Council supports biomass resources with representatives from a number of economic sectors supporting technology and biomass-related economic development opportunities. 12 Mississippi State University has also established a sustainable Energy Research Center that has a focus on biomass crops such as lignocellulosic crops, switchgrass, oilseed crops, and woody biomass. 13 Another research organization advancing the development of agricultural methods for woody energy crop production in Mississippi is the Forest Products Laboratory, a USDA research station.14
The two most likely sources of biomass-based energy available in Mississippi are from wood and forestry-related byproducts. Since 1992, Mississippi has increased its acreage of forestlands by more than 1 million acres. The total estimated timberland in the state is 19.6 million acres; 61 percent of the state’s total land. Reforestation efforts also help to keep Mississippi’s forestry industry and related wood products manufacturing industry sustainable by planting two times the amount of timber harvested each year.15 This high level of forestry activity has created an active wood products manufacturing industry. Together foresters and the manufacturers relying on those commodities are in a position to supply feedstocks for renewable energy in Mississippi.
Wood products from the logging and manufacturing process can be used to produce renewable energy in a number of ways. The most common application of woody residues from the forestry sector is for combined heat and power operations that produce electricity and heat on site at manufacturing facilities through the combustion of wood wastes, this implementation will be discussed in the Sustainable Business Practices section of this report. Wood shavings and debris from the manufacturing process are also being formed into compressed wood pellets for use as a source of renewable energy, particularly in Europe. The pellets are being used to heat homes and are also being co-fired with coal which helps reduce the carbon dioxide emissions of coal power plants. These pellets are considered to be an environmentally beneficial energy source because they are carbon neutral and renewable. The carbon emitted from combusting the pellet represents no new carbon to the atmosphere since the same amount of CO2 would have been released by the natural decay of the tree. The production and transportation of these products does, however, lead to emissions.
When the European Union mandated that 20 percent of electricity in member states had to be produced from renewable sources, the wood pellet became the cheapest method to achieve that goal.
5 In the United Kingdom alone, 12 million tons of pellets will be needed a year to achieve their renewable targets.16 The United States is slowly beginning to provide these commodities for the European market. A report by Argus Media suggests that Europe’s wood pellet needs could reach 32 million tons per year by 2016 and rise as high as 335 million tons per year by 2020.17 According to a 2009 Wall Street Journal article, the United States was only home to 40 pellet factories until very recently.18 Mississippi is home to two wood pellet plants, one in Amory and the newest, the Piney Woods Pellets plant in Stone County. The Tomorrow’s Energy LLC Piney Woods pellet plant in Wiggins, Mississippi was recently purchased by Enviva, a Virginia-based biomass wood pellet producer. In total, Enviva supplies 350,000 tons of woody biomass for its customers in Europe and the United States each year. When it takes over the plant, Enviva will expand production from 50,000 tons per year to 150,000 tons per year, create 22 jobs at the manufacturing facility, and will create 30 jobs further down the supply chain.19 Enviva also purchased a second Mississippi wood pellet plant, CKS Energy, in August of 2010.20
A map of Mississippi’s biomass resources has been included on page 19 of this report. The map was generated by the National Renewable Energy Laboratory for the U.S. Department of Energy.
Energy Efficiency Wood product manufacturers are now creating products that improve energy efficiency. One type of product being manufactured is a structural insulated panel which generally consists of a core of rigid, insulating foam being inserted between two outer skins of oriented strand board (OSB).21 These panels can be used in floors, walls, and roofs and can reduce energy use by 12 percent to 14 percent.22 General Panel Corp in Grenada, Mississippi is one manufacturer of this product.23
Greenhouse Gas Reduction Relying on renewable sources of energy helps lower greenhouse gas emissions. These industries are also helping to reduce greenhouse gas emissions through other products as well. In 2009, Florida-based Domino Sugar began marketing a carbon-neutral sugar product under the label “CarbonFree.” According to the company, the label signifies net zero carbon emissions into the atmosphere from the farming, milling, refining and packaging of the sugar.24 Both the cane and processing facilities for this product are located in Florida.
Pollution Prevention and Clean-up No evidence of significant involvement for this activity category was found in the Food, Fibers, and Wood Products Manufacturing industries.
Recycling and Waste Reduction A significant environmentally beneficial product produced at pulp and paper mills is recycled paper. Paper and paperboard materials represent the largest component of municipal solid waste.
6 These products also have one of the highest recycling recovery rates. Overall recycling levels in the U.S. have risen from 10 percent in 1980 to over 33 percent in 2008. Meanwhile, recovery rates for office-type paper are over 71 percent.25 Mississippi River Pulp in Natchez, Mississippi utilizes recovered wastepaper that is then deinked, screened and cleaned into premium white pulp for food and beverage containers26. In November of 2010, Mississippi River Pulp announced the completion of a pilot project with Starbucks where used paper cups were successfully recycled into new cups.27 Mississippi currently has four recyclers of paper and paperboard operating in different parts of the state. The chart below lists the pulp and paper recyclers in Mississippi.
Mississippi Pulp and Paper Recyclers28 Company Location Mcginnis Lumber Meridian Phoenix Recycling Walls Sumrall Recycling Sumrall Triangle Maintenance Services Columbus
A few wood products manufacturers and furniture makers specializing in recovered woods are also helping create new products from what would otherwise be considered waste. Companies are now retrieving sunken logs lost during the water transport of cleared cypress swamps as long as 100 years ago. The recovered woods have desirable, tight wood grains due to slower growth rates in the older, denser forests.29 Sugarcane bagasse, the waste product remaining after sugar cane is processed, is also being used to make traditional paper products like compostable plates, bowls, and take-out containers such as Solo’s “Bare” line. Although none are currently being manufactured in Mississippi, it is possible that similar operations come to the state in the future. Many of the advances in the renewable energy activity category in the Food, Fibers, and Wood Products Manufacturing industries involve finding valuable uses for what is now considered waste: tree trimmings and other plant biomass. These renewable energy activities also provide a waste reducing service and provide new energy sources that can serve to reduce a farm’s energy costs or be an additional revenue stream.
Sustainable Agriculture, Natural Resource Conservation, and Coastal Restoration Food and beverage manufacturers can support sustainable agricultural methods by preparing and producing food and drink products certified as organic. By choosing to process organic foods and
7 drinks, food and beverage manufacturers are sustaining environmentally beneficial activities taking place on their suppliers’ farms. The environmental benefits associated with organic farming include benefits to the soil, water, air, biodiversity, and other ecological services. According to the Food and Agriculture Organization of the United Nations organic processes such as crop rotations, symbiotic associations, cover crops, and organic fertilizers help improve the medium and long-term health and nutrient consistency of soils, and reductions in soil erosion. Water pollution by runoff synthetic fertilizers and pesticides is reduced and organic methods are seen as restorative measures in some heavily polluted areas. Organic agriculture also decreases fossil fuel dependence by avoiding petro- chemical-based fertilizers and pesticides, and can increase carbon storage by integrating higher levels of carbon into soils. Many organic farming operations are also supporting biodiversity at the genetic, species, and ecosystem levels through plant selection and by avoiding pesticides that can harm native species.30
Foods and other items carrying the organic label are officially regulated by the United States Department of Agriculture (USDA). The USDA Organic label guarantees that certain environmental or health considerations were taken into account in the production, raising, or harvesting of crops, livestock and poultry, and processed foods. For processed foods to be labeled organic, no less than 50 percent of its ingredients (excluding salt and water) by weight must have been raised organically. Livestock and poultry producers must agree to use feed that is organically produced, disallow plastic pellets (sometimes used for roughage), agree not to use manure re-feeding and feed formulas with urea, and abstain from using hormones, growth promoters, subtherapeutic antibiotics, or medications on animals without illness. Seafood caught in the wild may also be classified as organic.31
According to the Southern Organic Resource Guide, Mississippi was one of only two states to have no land established for certified organic production in 2001. By 2005, the Mississippi Department of Agriculture Organic Program had certified the state’s first five organic producers and two other producers were certified by private agents.32 Since 2005, the amount of certified organic farmland has increased dramatically. By 2008, Mississippi’s acreage of organic crops and pasture and rangeland was 1,433 spanning 23 different operations.33 The extent to which Mississippi’s food and beverage manufacturers are preparing products certified as organic is unclear, but opportunities to produce organic products are available and expanding for large and small manufacturers alike.
Education, Compliance, Public Awareness, and Training Wood products manufacturers can obtain certifications for their products if they meet certain environmental standards. Certifications include the Sustainable Forestry Initiative (SFI) and the Forest Stewardship Council (FSC). FSC certification ensures that the forest products used by manufacturers are from responsibly harvested and verified sources34 and the SFI certifies the forests,
8 land owners and managers in the United States and Canada that are supplying raw materials for wood and paper manufacturers.35 Both the FSC and SFI labels can be found on finished goods produced by paper and wood products manufacturers. The Mississippi Forestry Association encourages the implementation of the SFI Program and participates in logger education, landowner outreach and public awareness activities. Some of these SFI goals include meeting or exceeding water quality laws to protect bodies of water on certified lands, continuous monitoring of biodiversity and habitat impacts of forestry activities, and other actions that help to address climate change, avoid illegal offshore fiber sources, expand logger training and support, and promote best management practices and responsible forestry.36A list of SFI program participants in Mississippi can be found at the following web address: www.msforestry.net/sfi.php.
Green Business Practices Food, Fibers, and Wood Products Manufacturers are altering their daily business practices to have a smaller impact on the environment. These changes involve how they produce their products, how they power their facilities, and other broad changes to the way they run their company.
Renewable Energy As with the production of environmentally beneficial goods, the utilization of renewable energy resources for production processes is the most promising for Mississippi’s wood products manufacturers. Pulp and paper mills have been leaders in the use of renewable energy to power their operations. Woody residue as feedstock accounts for nearly 90 percent of all renewable energy production with pulp and paper companies producing 75 percent of all biomass energy. In the Manufacturing sector as a whole, pulp and paper companies account for 94 percent of all renewable energy generation and the pulp and paper mills derive 65 percent of their energy needs from renewable woody residue.37 These manufacturers produce both electricity and heat (also known as combined heat and power, CHP, or cogeneration) from their production byproducts reaping economic savings from reduced disposal costs and lower energy costs. Woody residues such as bark and sawdust are utilized to produce heat for dryers in a process known as thermal generation which eliminates the need for other fuels to create the heat needed to dry the wood products.
Wood products manufacturers may also alter their production processes in order to better complement the creation of renewable fuel from the biomass. Wood product manufacturer Weyerhaeuser has partnered with KiOR (via its Chevron venture Catchlight Energy) to supply forest products for conversion to biofuel.38 In August of 2010, Mississippi announced that KiOR would invest $500 million in 5 biofuel production facilities in Mississippi. These facilities will create a crude-oil substitute from a specialized process that transforms biomass into oil with a proprietary catalyst system that mimics the natural process that normally takes millions of years.39 The five facilities will also contribute to the creation of 1,000 direct and indirect jobs by 2015 according to
9 the Mississippi Development Authority.40 KiOR’s facilities will be located in Columbus, Newton and one other southwestern location. The final two locations are still being determined.41 A second company, Enerkem has also announced a project in Mississippi that will utilize wood waste alongside municipal solid waste to create ethanol.42 These projects are providing a new market for the wood waste created by forest products manufacturers, however, this demand could impact the overall price of wood and compete with on-site renewable energy systems that also utilize those wood scraps.
Food manufacturing establishments can also benefit from renewable energy systems that make their production processes more environmentally beneficial. Many fruit and vegetable operations use large quantities of hot water for washing, curing and sanitizing. Mississippi is home to 22 such establishments that could use solar thermal systems to assist with hot water production. Food drying is another aspect of food processing that can benefit from renewable solar energy. Food drying is an inexpensive method for keeping preserving food that the Mississippi Natural Products Association applies to wheat grass, lemon grass, chinacea, valerian and lemon barley to add value to their products. Solar drying devices can decrease the time needed to complete this process while maintaining quality.43
Energy Efficiency The Food, Fiber, and Wood Products Manufacturing sector’s primary renewable energy activity is also their most widespread energy efficiency adoption. The production of electricity and heat from woody byproducts not only allows manufacturers to forego fossil fuel purchases, but is also more energy efficient. Waste fibers and the paper production byproduct “black liquor” have long provided both electricity and heat needs for sugar mills, pulp and paper mills, and rice mills across Mississippi.
In 2010, Sanderson Farms installed a new methane gas-capturing system at their processing plant in Collins, Mississippi.44 The system captures methane gas from the facility’s anaerobic lagoon that treats the plant’s wastewater, then pipes the gas back to the processing facility to fuel the boilers.45 According to the Sanderson Farms Corporate Responsibility Report, this system cuts natural gas usage by eighty percent and results in a first year savings of approximately $500,000.
Kimberly-Clark, a nationwide manufacturing company with a facility located in Corinth, deploys their Global Energy Services Team to tackle their costly energy issues. The Global Energy Services Team is comprised of energy engineers and energy supply professionals to evaluate energy suppliers, purchase energy, assess alternative energy projects, conduct energy efficiency audits and implement technical energy solutions such as combined heat and power technology.46 Kimberly- Clark is a member of the U.S. EPA’s Climate Leaders Program and Combined Heat and Power
10 Partnership Program to increase energy efficiency in their operations and distribution and ultimately reduce their greenhouse gas emissions.
Greenhouse Gas Reduction In conjunction with the Department of Agriculture and the Department of Energy, the EPA has established an outreach program to help businesses reduce methane emissions from livestock waste through biogas recovery systems known as AgSTAR. The program provides information and tools to operations wishing to evaluate and implement biogas recovery systems that handle and anaerobically digest manures and slurries for the capture and utilization of the methane emissions. Trapping methane in biogas digesters allows operations to reduce outside fuel purchases and prevents the greenhouse gas from entering the atmosphere.47
The forest products industry, as a manager of large swaths of private forests, is also an important player in greenhouse gas reduction. At manufacturing facilities themselves, the American Forest & Paper Association reports reductions in greenhouse gas emissions relative to 2002 of 36.7 percent at pulp and paper mills and 30.7 percent at wood products facilities.48 The implementation of renewable energy systems and more energy efficient equipment plays a key role in the reduction of greenhouse gas emissions.
In October of 2004, Tyson joined the Environmental Protection Agency’s SmartWay Program. The SmartWay Program is a nationwide voluntary program for companies seeking more fuel efficient and cleaner transportation options.49 Tyson’s transportation group worked with the EPA, over a three year time span, to develop measurable goals to reduce air emissions and improve fuel efficiency in their transportation fleet.50 In 2004, Tyson also joined Climate RESOLVE, a program developed by the Business Round Table (BRT), and the EPA’s Climate Leaders Partner Program to reduce greenhouse gas emissions. The Climate Leaders Partner Program is a voluntary program that challenges business to develop a corporate-wide GHG inventory and set aggressive GHG emission reduction goals over a five to ten year span.51 Tyson Foods sustainability reports can be found on their corporate website.
Pollution Prevention and Clean Up The poultry production industry in Mississippi produces an enormous quantity of manure, which has traditionally been used as a fertilizer, due to its high levels of nitrogen and phosphorous, as well as some other useful plant nutrients. However, heavy application of poultry manure tends to lead to high nutrient build-up in the soil, which can lead to groundwater leaching and runoff, which can then promote algae growth in waters that deplete oxygen and harm fish and other wildlife.52 Many poultry producers are adding the nutrient phytase to their chicken feed, which helps them utilize more of the phosphorus content in their diet thereby cutting down on the nutrient levels in
11 their waste.53 When the resulting poultry litter is applied to fields as a fertilizer, the nitrogen- phosphorus ratio is improved, and phosphorus run-off is reduced.54
Air emissions of pollutants other than greenhouse gasses at pulp and paper mills have also been reduced over the past several years. From 2006 to 2008 pulp and paper mill emissions of sulfur dioxide (SOx) were reduced by 14.6 percent, nitrogen oxides (NOx) remained flat, and total reduced sulfur (TRS) emissions were cut by 18.6 percent according to the American Forest & Paper Association. The volume of effluent discharges released per ton of product produced has decreased since 1995 by 41.1 percent for total suspended solids and by 29.4 percent for biochemical oxygen demand. Chloroform releases were down 34.7 percent from 2006 to 2008, methanol releases were down 22 percent, and formaldehyde was down by 26 percent.55
Recycling and Waste Reduction In addition to applying their wastes to renewable energy production, food and beverage manufacturers can also reduce waste by partnering with other business or through changes to their packaging. Beverage manufacturer Lazy Magnolia Brewing Company provides spent grains to a local hog farmer, provides excess yeast to a local cattle farmer as a feed additive, and uses spent beer lost in the bottling process to water fields.56
Food manufacturers are also pursuing ways to reduce packaging waste through “food”-based materials. Stonyfield farm, the New Hampshire dairy company, currently uses 93 percent corn-based plastic for multi-pack yogurt cups rather than petroleum based plastics. A university in Malaysia is perfecting plastics made from tropical fruit peels called “Fruitplast.” This product will be 10 percent cheaper to manufacture than petroleum-based plastic and biodegrade in as little as 3 to 6 months. In Great Britain chip maker Walkers is using potato peels to produce packaging for their potato chips. These bags are scheduled to be on shelves in 18 months. 57 . 58 Kimberly-Clark’s corporate sustainability goal for 2015 is to completely eliminate their manufacturing waste59 and reduce their total manufacturing water use by twenty five percent.60
Sustainable Agriculture, Natural Resources Conservation, and Coastal Restoration All members of the American Forest & Paper Association are required to abide by the conditions of one or more of the major forest certification programs and all U.S. members are current participants in the Sustainable Forestry Initiative (SFI) which requires reforestation, nurturing and harvesting of trees with the conservation of soil, air and water resources, protection of wildlife and fish habitat, and maintenance of forest aesthetics.61
GP Cellulose, a pulp mill manufacturer with a facility in Mississippi and other southern states, practices sustainability through the company’s Wood and Fiber Supply Organization, which secures fiber for the manufacturing operations.62 GP Cellulose’s wood and fiber adheres to the Sustainable
12 Forestry Initiative. GP Cellulose has successfully completed two SFI certification audits in 2001 and 2003.63 The Anderson Tully Lumber Company and the Louisiana Hardwood Products Company earned the Forest Stewardship Council (FSC) certification in 2000 and 2002, respectively.64 The FSC is an international non-profit organization that requires a forest operation to be audited by an accredited, independent, third party organization to determine whether that operation meets the internationally agreed-upon FSC standards.65 The FSC certification symbolizes that efforts are being extended to responsibly manage a forest operation.
Education, Compliance, Public Awareness, and Training The United States Department of Agriculture (USDA) is helping to support products that have been manufactured from renewable, natural components through a labeling system. In January, 2011 the USDA launched a new labeling system for manufactured products containing wholly or primarily biologically-based renewable plant, animal, marine or forestry materials. The new, “Biobased” label has been approved for nearly 5,100 products for preferred purchasing by Federal agencies and aims to promote the sale of these environmentally preferable products to consumers.66 This label will verify that products like linens, fuel additives, cleaning products, and table ware that claim to be derived from biological materials actually are sourced as manufacturers maintain. The USDA established minimum requirements for the renewable content for many product categories that manufacturers must meet to earn the biobased label. For all products without USDA- established criteria, a 25 percent minimum biological, renewable threshold must be met.67 A sample image of the new label appears below.
Economic Factors Manufacturers of food, fiber and wood products are finding an expanding market for green goods and services and are more effectively utilizing the byproducts of production as a source of heat and electricity. Consumers are becoming more sensitive to the environmental impact of the goods and services they purchase and are demonstrating a preference for recycled products and organic food and beverages. In addition, driven to increase the efficiency of the production process and utilize the byproducts from the production process, manufacturers in this sector are producing
13 biofuels, combustible compressed pellets and direct supply of energy to meet their own energy as well as provide stand-alone goods.
Store shelves are being stocked with green goods in response to consumers’ increasing demand for organic food and beverages and recycled paper and wood products. Many of these goods are more expensive to produce than their traditionally produced equivalents. For example, standards and regulations for the production of organic foods may require more expensive inputs like approved feeds and fertilizers. However, as consumer preferences shift in favor of organically produced food and recycled materials, producers can charge higher prices and the production of these goods becomes more viable. In addition, as production increases, many operations are able to take advantage of returns to scale helping to reduce the premium that producers must charge on green goods and services, further expanding the market to consumers not willing to pay the premiums prevailing today. Finally, as manufacturers continue to develop more efficient products and processes for producing organic food and beverages and recycled paper and wood products, the relative price of these green goods and services can be expected to fall relative to other goods and services.
As in other sectors, manufacturers of food, fiber and wood products stand to gain from more efficient utilization of the byproducts of production. Of course, this is neither a new concept nor unique to this sector. Farmers have been using what would otherwise be a waste product as fertilizer for quite some time. However, the use of byproducts as an input in the production process has not been fully realized and is being improved upon continually. Saw dust and chicken litter that were once swept away as waste can now be collected and turned into energy. Motivated by their interest in better utilizing the byproducts of production, manufacturers are developing technology that will make it easier for them to provide others with biofuels, combustible compressed pellets and direct supply of energy as stand-alone goods. Wood biomass renewables and cellulosic biofuels are still an evolving market that has the potential to grow in the United States and in Mississippi in particular.
Public Policy Manufacturers of foods, fibers, and wood products are being influenced by three significant policies of the past few years. Europe’s renewable energy mandates, Renewable Fuel Standards in the United States, and the Biomass Crop Assistance Program under the Farm Bill. In addition, recent economic stimulus packages targeting the housing market have had a positive impact on the demand for green wood products.
The renewable energy policy in Europe requires 20 percent of energy to be from renewable sources by 2020. This has created a strong need to import renewable energy and the current solution has been to rely on millions of tons of wood pellets from the U.S., Canada and Brazil. Exporters
14 with good access to low-cost water transportation are especially well-suited to take advantage of these new markets. The increased expansion of Renewable Portfolio Standards in the United States could also help fuel interest in wood pellets and other biomass-based renewables.
Also spurring demand for renewable energy products from the food, fiber, and wood products manufacturing industries is the Renewable Fuel Standard (RFS). Established in the 2005 Energy Bill, the RFS calls for billions of gallons of ethanol to be blended into the country’s gasoline. In 2007, the Energy Independence and Security Act mandated that of the 36 billion gallons of ethanol required by 2022, 21 billion had to come from non-corn sources and 16 billion gallons had to come from cellulosic ethanol.68 These requirements will boost development of economically feasible cellulosic biofuels. Mississippi’s wood products manufacturers are well positioned to satisfy some of that demand.
In addition to the two policies above creating demand for renewable energy from the food, fiber, and wood products manufacturing industries, the 2008 Farm Bill sought to increase the supply of biomass through the Biomass Crop Assistance Program (BCAP). Under the program, matching funds were made available for the harvest, collection, storage, and transportation of eligible materials for which there is not already a regional market. Materials must be collected or harvested directly from the land using an approved conservation or stewardship plan and then be transported directly to an approved biomass conversion facility. Eligible materials include hardwood chips, trees and shrubs with no pulp or timber value, legumes, switch grass, rice hulls, or sugarcane bagasse.69 While the subsidies were being provided, $6 million was distributed in Mississippi.70 However, payments for woody biomass have been suspended pending investigation into the adverse economic effects on primary-product biomass markets such as wood product manufacturing.
The federal government is also providing incentives to support the development of alternative fuel refineries. Beginning in 2009, companies could apply for up to $250 million in guaranteed loans for the development and construction of commercial-scale biorefineries or for the retrofitting of existing facilities for the development of advanced biofuels.71 Producers of advanced biofuels from biomass other than corn that are operating in rural areas may also apply for funding offered by the Bioenergy Program for Advanced Biofuels.72 Tax credits are also available for companies producing certain types of renewable fuels: registered cellulosic biofuel producers may be eligible for a tax incentive of up to $1.01 per gallon under the cellulosic biofuel producer tax credit,73 small producers (under 60 million gallons/year) of corn-based ethanol may qualify for a $0.10 per gallon credit in the small ethanol producer tax credit,74 and blenders of ethanol can receive a $0.45 per gallon credit for adding pure ethanol to gasoline under the volumetric ethanol excise tax credit.75
15 Economic stimulus packages like the Homebuyer Tax Credit and the Energy Efficient Housing Tax Credit promote first-time home purchases and energy efficiency improvements that can rely on wood products. These packages were designed to buoy the housing market during the current economic downturn. In combination, they encourage building and retrofitting homes with green building products many of which are fiber and wood based.
Technology New technologies are helping to improve efficiencies at manufacturing facilities and create new and better ways of producing renewable energy. Newer, high-pressure boilers are being developed for the possible use in combined heat and power operations that rely on agricultural residues. These could be used at a variety of food, fiber and wood products manufacturers. The newer boilers would potentially burn the feedstock more completely and make better use of the steam produced.76
Pulp and paper producers are also exploring new technologies that will have environmental benefits specific to their operations. Emerging uses for black liquor, the liquid by-product of the pulping process that is already used to produce heat and power, are being studied. The liquid could potentially be even more effective at generating electricity with the potential to create enough power to sell to off-site locations. The paper industry is also working to reduce mill odor emissions through Dilute Non-Condensable Gases systems that lower the level of odor-causing sulfur vapors. A product known as paperfoam is also growing in popularity among paper producers. Paperfoam is a biodegradable and recyclable packaging that can be used in place of plastic.77 Paper coatings can be made from corn proteins called zein in high grease applications like popcorn bags as an alternative to synthetic hydrocarbon-based petrochemicals.78 Another technology being perfected at Louisiana Tech University will embed nano-materials into the pulp production process that will increase the recyclability of some paper and promote energy savings in the production process by decreasing the amount of pulp beating necessary for recycling and repairing broken fibers.79
New technologies and processes also provide ways to reduce pollution and toxins. In Mississippi, two pulp and paper mills rely on chlorine dioxide as bleaching agents which lead to harmful dioxins. New processes are oxygen-based and can eliminate the use of some hazardous chemicals.80
Technological innovation will also be a driving force in the development of advanced biofuels. Currently, corn ethanol is much cheaper to produce than cellulose-based ethanols from wood products or sugarcane bagasse. Cellulosic ethanol requires additional digestion processes to breakdown the sugars in the cellulose, but high efficiency enzymes are in development that would reduce the cost of biofuel conversion.
16 Job Growth and Workforce Development Considering primary and support jobs, green employment in the Food, Fiber and Wood Product Manufacturing sector is expected to grow at a similar rate to the overall sector during the next 10 years reaching 1,775 jobs in 2020 relative to the 2010 baseline of 1,718.c That growth is expected to occur gradually over this period. In the first two years, green employment is expected to rise to 1,725 and 1,731 in 2011 and 2012 respectively. This steady, moderate growth is expected to continue with green employment reaching 1,747 in 2015 and 1,775 in 2020.
Some of environmentally beneficial activities in the food manufacturing process will not require entirely new jobs, but will result in an increased emphasis on those activities for existing jobs. As more and more efficiencies are instituted, retraining will likely be necessary. Activities in wood-based biomass and cellulosic ethanol production, however, will likely require an expanded workforce. Because a significant share of the market is overseas, workers will soon need to be skilled not only in management, marketing and sales, but also international trade. Workers are also being dedicated to new energy production activities at their manufacturing facilities. Operating the thermal and electrical generation equipment at mills requires specific training and technical skills and the ability to adapt to advancing technologies.
The anticipated employment growth of green jobs in the Food, Fiber and Wood Product Manufacturing sector will be comprised of a combination of the creation of new jobs and the gradual greening of existing jobs. While the contribution of each factor has yet to be determined, training providers should consider the unique training needs brought on by each of these changes. For some green occupations, existing workers will need training to enhance their skills. For other occupations, curricula may be needed to provide a more comprehensive training for new workers or those entering a new occupation.
Key Players Enviva: www.envivabiomass.com One of the world’s leading biomass energy companies. Recently purchased two wood pellets plants in Mississippi.
Forest Stewardship Council: www.fscus.org
c The starting point for a sector’s green jobs projection is the survey estimate, which includes private and public entities in each sector. Baseline growth rates were taken from the state’s primary employment projections, which include only private sector establishments, and supplemented with additional information on future changes to the green economy collected through this research effort.
17 Non-profit organization that sets principles, criteria, and standards designed to guide forest management toward sustainable ends.
Mississippi Department of Environmental Quality Timber and Wood Products Branch: www.deq.state.ms.us/mdeq.nsf/page/epd_Timeber_and_Wood_Products?OpenDocument Environmental compliance and enforcement division overseeing pulp and paper mills, sawmills, plywood and particle board plants and other pulp, paper and wood products manufacturers.
Mississippi Forestry Association: www.msforestry.net Organization representing land owners, foresters, logging contractors, forest products manufacturers, wood fiber suppliers and state and federal agencies working to promote the “Voice of Forestry” in Mississippi.
Mississippi Forestry Commission: www.mfc.ms.gov Agency protecting Mississippi’s forests from fire as well as promoting urban forestry, good management practices, and overall forest health.
Mississippi Lumber Manufacturing Association: www.mslumbermfg.org Promotes the sale and use of southern yellow pine and hardwood produced in the state of Mississippi.
Mississippi Paper and Pulp Recyclers
Mississippi State University Department of Forest Products: www.cfr.msstate.edu/forestp Working to improve the intellectual, cultural, social and professional development of students working in the diverse forest resources field. U.S. Industrial Pellet Association: New trade group formed to address issues faced by U.S. manufacturers of wood pellets being exported to Europe focusing on certification standards, sustainability and contract uniformity.
Map of Mississippi biomass resources generated by the National Renewable Energy Laboratory for the U.S. Department of Energy: http://www.nrel.gov/gis/pdfs/eere_biomass/eere_biomass_h_mississippi.pdf
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19 Notes
1 "Sector 31-33--Manufacturing." North American Industry Classification System. U.S. Census Bureau. Web. 27 Apr. 2011.
4 "Quarterly Census of Employment and Wages: Second Quarter 2010." U.S. Bureau of Labor Statistics. Web. 20 July 2011.
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19 "Enviva Acquires Piney Woods Pellets in Mississippi, Plans Threefold Ex North America Wood Energy." RISI - Wood Biomass Markets. RISI, 13 Oct. 2010. Web. 29 June 2011.
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40 Mississippi Development Authority. Public Relations. Governor Barbour Welcomes BioFuel Producer to Mississippi. Mississippi Development Authority. Mississippi Development Authority, 26 Aug. 2010. Web. 27 June 2011.
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62 "Georgia-Pacific Sustainable Forestry." Georgia-Pacific Home. Web. 26 July 2011.
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