Environment, Energy & Safety Report

Industry Progress Report

AMERICAN DECEMBER COUNCIL 2018 Introduction

The American Wood Council (AWC) the environment, all while producing is the voice of North American wood products that are central to the lives products , an and homes of all Americans. that provides almost 450,000 men and women in the United States with As part of this commitment, the family-wage jobs.1 AWC represents industry has been publicly reporting 86 percent of the structural wood its performance across a number products industry, and members make of environment, energy and safety products that are essential to everyday measures since 2014. This Industry life from a renewable resource that Progress Report, our third, shows absorbs and sequesters . that there have been significant improvements over the last decade On behalf of the industry it represents, in these areas, despite the economic AWC is committed to ensuring a downturn that caused a drop in resilient, safe, and sustainable built wood products manufacturing environment. To achieve these beginning in early 2006. Some of the objectives, AWC contributes to the metrics have leveled off in the last development of sound public policies, few years reflecting a stabilization of codes, and regulations which allow performance and maturing of the for the appropriate and responsible regulatory regime after an earlier manufacture and use of wood period of intense change. The Report products. We support the utilization also provides some economic and of wood products by developing and employment data for the last decade. disseminating consensus standards, comprehensive technical guidelines, In reviewing our progress, it is and tools for wood and important to note that many factors , as well as providing that influence individual parameters regarding their application. play out over extended periods of time, so looking at longer-term trends, AWC members are very proud of their rather than focusing on changes record of energy and between any two years, is encouraged. efficiency, mill safety, and protection of

1 Bureau of Economic Analysis 2016 data

Environment, Energy & Safety Report 2018 Key Findings 450,000 • The broad products industry is the Family-Wage Jobs largest producer and user of bioenergy of any in the United States industrial sector. AWC member companies have met over 75 percent of their energy needs, on average, from over the last decade. 17% • Using biomass from forest products Reduction of Energy Intensity manufacturing residuals displaces from Pre-Recession Levels use and is a carbon-neutral, renewable fuel source. • Energy intensity has improved significantly since the 2008-09 recession and is 17 percent 3x below pre-recession levels. Capital Spending by the U.S. Wood • The 10-year trend in chemical releases has Products Sector Compared to 2009 shown significant reductions, which includes formaldehyde and . • Worker safety incident rates for member companies are consistently lower than all 75% manufacturing during 2004-2016. Energy Needs Met from Biomass Over the Last Decade • Capital spending by the U.S. wood products sector increased from 2012 to 2016; in 2016 spending was nearly 3 times that of 2009.

Environment, Energy & Safety Report 2018 Environmental Profile CHEMICAL RELEASES

FORMALDEHYDE Given methanol’s relatively lower Formaldehyde emissions intensity of toxicity, industry and regulatory focus reporting AWC members, expressed in has shifted to other performance pounds per thousand cubic feet (MCF) measures. of products produced, has declined overall since 2006. The emissions Reductions in methanol emissions intensity for 2016 is 53 percent lower are likely associated with clean air than that for 2006. The significant requirements to capture and destroy decline is likely due to a combination methanol from various presses, dryers of required state and federal air and other process equipment that controls and product went into effect in 2008. reformulation efforts to reduce formaldehyde in resins. The leveling TOXICS RELEASE of emissions since 2012 is indicative INVENTORY of AWC members having met these The following chart tracks total regulatory obligations and continuing Toxics Releases Inventory (TRI) to maintain strict compliance. per thousand cubic feet of wood products production for AWC member METHANOL companies that reported to the AWC Methanol emissions intensity, survey. These data, as well as the expressed in pounds per thousand formaldehyde and methanol emissions cubic feet of wood products data, were obtained from EPA’s TRI produced by reporting AWC member database. companies, remained essentially flat since 2012, indicating AWC members’ Total TRI releases intensity has been have met regulatory obligations. The trending downward since 2003. intensity declined from 4.2 pounds/ Between 2003 and 2016, the intensity MCF in 2008 to 2.8 pounds/MCF decreased 37 percent. in 2016, a reduction of 33 percent.

Environment, Energy & Safety Report 2018 POUNDS PER 1,000 CUBIC FEET OF PRODUCTION 4

3

2

1

CHART 1 0 2003 2006 2008 2010 2012 2014 2016 Formaldehyde Releases Intensity Source EPA (for facilities reporting to AWCAFPA Surveys)

POUNDS PER 1,000 CUBIC FEET OF PRODUCTION 5

4

3

2

1 CHART 2 0 2003 2006 2008 2010 2012 2014 2016 Methanol Releases Intensity Source EPA (for facilities reporting to AWCAFPA Surveys)

POUNDS PER 1,000 CUBIC FEET OF PRODUCTION 8

6

4

2

CHART 3 0 2003 2006 2008 2010 2012 2014 2016 Total TRI Releases Intensity Source EPA (for facilities reporting to AWCAFPA Surveys)

Source: EPA (for facilities reporting 2010-2016 AWC Environment, Energy & Safety Survey; AF&PA EH&S Survey for previous years)

Environment, Energy & Safety Report 2018 LIFE CYCLE PERFORMANCE More attention is being paid than ever before to how impact the environment, including the choices of materials used in construction and how those materials help conserve energy during operation. Wood is the perfect sustainability material because it is renewable, stores carbon that reduces greenhouse gases, and is energy efficient. The North American wood products industry is committed to sustainability in its products and their use. In support of this commitment, and to stimulate product improvement, the industry prepared and has published third-party verified Environmental Product Declarations (EPDs) and Transparency Briefs that capture and describe the environmental performance of many of the products produced. All North American wood industry EPDs have been independently third-party verified by UL Environment (ULE), a unit of Underwriters Laboratories. ULE verifies that EPDs conform to the requirements of ISO 14025, the global standard governing EPDs. ULE’s review looks at both the underlying life-cycle assessments as well as the data reported in the EPDs. These third-party verified EPDs provide users with a science- based tool to understand and weigh what environmental factors are important to them when making product selections. In total, the wood products industry has produced and made available 12 EPDs, which can be found at awc.org/greenbuilding/epd.

Environment, Energy & Safety Report 2018 Energy Profile

PERCENT

Biomass Fuels

Purchased Electricity

Natural Gas

Purchased Steam

Other Fossil Fuels CHART 4 0 10 20 30 40 50 60 70 80 Source AWC Environment, Energy Safety Survey 2016 Wood Product Facility Energy Sources

Wood products facilities use all parts The result is that by using biomass, the of natural raw materials received, not industry displaces fossil fuel use and its only to manufacture products used associated emissions. in everyday life, but then also use the manufacturing residuals to generate The greenhouse gas reduction benefit most of the energy needed. Data of using biomass manufacturing submitted to AWC’s Environment, residuals for energy by the wood Energy & Safety Survey indicate that products industry is equivalent to member companies met nearly 75 about 24 million tons of carbon percent their energy needs from dioxide. This is equivalent to removing renewable, carbon neutral biomass approximately 4.6 million cars from the energy in 2016. every year.2

By using biomass manufacturing The next two largest energy source residuals, the wood products industry categories in 2016 were purchased is harnessing the energy value electricity at 13 percent and natural of carbon before it is lost to the gas at 10 percent. atmosphere through other means.

2 Determined by following the methodology in the National Council for Air and Stream Improvement, “Greenhouse Gas and Fossil Fuel Reduction Benefits of Using Biomass Manufacturing Residuals for Energy in Forest Products Facilities”, Technical Bulletin No. 1016 (Rev. Aug. 2014).

Environment, Energy & Safety Report 2018 PERCENT 100

90

80

70

60

50 CHART 5 40 2004 2006 2008 2010 2012 2014 2016 Biomass Share of Total Source 2010-2016 data from AWC Environment, Energy Safety Survey AFPA EHS Survey for previous years Energy Consumption

The 2016 data continued the decade- has mostly held steady during the long trend, shown in the chart above, 2004-2014 period, with a 12 percent in which wood products facilities have drop from 2014 to 2016. The energy typically derived about 75 percent of intensity for 2016, measured as billion their energy needs from carbon neutral BTUs per MCF of production, was 16 biomass. This serves to decrease the use percent lower compared to 2004. of fossil fuels and reduce the landfilling However, it is noted that energy use is of biomass residues, thereby conserving not directly proportional to production space and avoiding production and small variations could be attributed of , an even more potent to inefficiencies that can occur when greenhouse gas. facilities operate at lower production levels than normal. Chart 6 shows energy use trends since 2004 for the wood products sector. Energy use at AWC member facilities

ENERGY INTENSITY BILLION BTUs PER 1,000 CUBIC FEET OF PRODUCTION 0.12

0.09

0.06

0.03

CHART 6 0.00 2004 2006 2008 2010 2012 2014 2016 Energy Use Intensity Source 2010-2016 data from AWC Environment, Energy Safety Survey AFPA EHS Survey for previous years

Environment, Energy & Safety Report 2018 Safety Profile 12 TOTAL RECORDABLE CASE RATE TRCR 10

8

6

4

2 CHART 7 0 2004 2006 2008 2010 2012 2014 2016 OSHA Total Recordable Sources 2010-2016 data from AWC Environment, Energy Safety Survey Case Rate (TRCR) AFPA EHS Survey for previous years U.S. Department of Labor Comparison AWC REPORTERS ALL WOOD PRODUCT FACILITIES* ALL MANUFACTURING , and veneer, products and reconstituted wood products facilities.

Since 2004, safety at AWC’s member For 2016, data reported by AWC wood products manufacturing mills members indicates a recordable case has improved by almost 16 percent rate of 2.9. This is lower than the 3.6 based on OSHA total recordable case rate for all manufacturing reported rate (TRCR). The OSHA recordable case by the Bureau of Labor Statistics rate dropped from 3.4 in 2004 to 2.9 in (BLS). Interestingly, the estimated 2016. This is calculated as the number 2016 recordable case rate for all U.S. of recordable cases per 100 full time wood products facilities, not just AWC employees working 40 hours a week members, is 5.0. and 50 weeks per year. The Days Away from , Restricted However, while still an improvement and Transfer (DART) case rate is a from the high in 2004, and consistently measure for severe injuries in the lower than the rate for either the wood workplace. These are cases where the products industry as a whole or all injured person could not work or had manufacturing, the total recordable to be re-assigned or transferred to case rate for AWC members has been perform other functions. slowly rising since 2008. The rate for 2016 is about 45 percent higher than that of 2008.

Environment, Energy & Safety Report 2018 6 DAYS AWAY FROM WORK, RESTRICTED AND TRANSFER DART CASE RATE 5

4

3

2

1 CHART 8 0 2004 2006 2008 2010 2012 2014 2016 OSHA Days Away, Sources 2010-2016 data from AWC Environment, Energy Safety Survey Restricted and Transfer AFPA EHS Survey for previous years U.S. Department of Labor (DART) Case Rate Comparison AWC REPORTERS ALL WOOD PRODUCT FACILITIES* ALL MANUFACTURING Lumber, plywood and veneer, engineered wood products and reconstituted wood products facilities.

Data reported by AWC members were involved in a workplace injury indicates a 2016 DART case rate of resulting in lost time from work, 1.7, which is below the 2016 rate of reassignment, or transfer to another 2.1 for all manufacturing reported by job. For AWC members, the DART rate the Bureau of Labor Statistics (BLS). It falls to 1.7 percent of employees being is also well below the estimated 2.8 similarly affected. DART case rate for all wood products facilities in the U.S. making similar Increases in both DART and TRCR products as AWC members. of AWC members since 2008 may be a result of the dramatic increase The DART case rate for AWC members in hiring of new employees as the declined more than 35 percent industry came out of the recession, between 2004 and 2006. However, the challenge of finding entry level, since 2006 it has been increasing semi-skilled and skilled workers in somewhat every year, resulting in a a tight labor market and those new longer-term decline of only 3 percent employees learning appropriate during 2004-2016. safety protocols, use of temporary workers having less experience with According to BLS, in 2016 there were safety programs as mills expanded approximately 393,000 employees in production, and greater reporting of the U.S. wood products sector. The events by mills especially with mergers DART case rate of 2.8 for all wood of smaller companies into larger ones. products facilities indicates that 2.8 percent of employees at these facilities

Environment, Energy & Safety Report 2018 Economic Profile

PRODUCTION HOUSING STARTS INDEX: 2012=100 THOUSANDS 180 2500

160 2000 140

120 1500

100 1000 80 500 60 CHART 9 40 0 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Wood Products Source Federal Reserve Board, seasonally adusted monthly data Industry Production PRODUCTION HOUSING STARTS and Housing Starts PRODUCTION After dropping nearly 45 percent remain significantly below pre- between 2005 and 2009 due to recession levels. declines in housing starts and the overall financial crisis, both housing Coming out of the recession, of starts and production of wood wood products have also been on products have continued to pick back the rise, from a low of $57.6 billion in up. 2009 to $96.0 billion in 2017, according to U.S. government data (Quarterly The slow but steady increase in new Financial Report for Manufacturing, has clearly lifted , Trade and Selected demand for wood. U.S. production Industries). of wood products rebounded by 43 percent between its mid-2009 low In 2017, the wood products industry point and the end of 2017, according accounted for 1.4 percent of U.S. to Federal Reserve Board data. manufacturing GDP according to data However, as can be seen from the compiled by the Bureau of Economic chart shown above, both housing Analysis (BEA). starts and wood products production

Environment, Energy & Safety Report 2018 CAPITAL SPENDING PERCENT OF SALES $ BILLIONS 5 7

6 4 5

3 4

3 2 2 1 1 CHART 10 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Wood Products Industry Source Annual Capital Ependitures Survey uarterly Financial Report Capital Spending for Manufacturing, Mining, Trade and Selected Service Industries, U.S. Census Bureau. CAPITAL SPENDING HOUSING STARTS

0%

THOUSANDS OF WORKERS 600

500

400

300

200

CHART 11 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Wood Products Industry Source Bureau of Labor Statistics Employment

Environment, Energy & Safety Report 2018 $4.8 billion Spent on Capital Improvements in 2016

1.4% Wood Products Industry Share of U.S. Manufacturing GDP

CAPITAL SPENDING EMPLOYMENT As shown in Chart 10, the According to BLS data, wood products wood products industry spent employment bottomed out at approximately $4.8 billion on capital 337,100 workers in 2011 and has been improvements in 2016. That level trending considerably higher in recent of spending is nearly 3 times the years as housing starts and industry recession-period spending low of production recover. Wood products $1.6 billion in 2009. $1.3 billion of the industry employment rose 2.7 percent industry’s 2016 capital spending went in 2016 and 1.0 percent in 2017 to for buildings, while $3.4 billion was 396,800 in 2017, but still off the high used for acquiring equipment. levels found early in the previous decade.

Environment, Energy & Safety Report 2018 2018 AWC MEMBERS

Almond Bros. Lumber Jordan Lumber & Supply Kapstone Paper & Packaging Canadian Wood Council Lampe & Malphrus Canfor Southern Pine -Pacific Charles Ingram Lumber Masonite Collins Companies McShan Lumber Collum’s Lumber Mendocino Forest Products Columbia Vista Mt. Hood Forest Products D.R. Johnson Lumber Norbord D.R. Johnson Wood Nordic Structures PotlatchDeltic DS Smith Riceboro Lumber Rex/North Florida Georgia-Pacific Robbins Lumber Green Bay Packaging Roseburg Forest Products Hampton Resources Seneca Hancock Lumber Shuqualak Lumber Harrigan Lumber Sierra Pacific High Cascade/WKO Stimson Lumber Hood Industries Swift Lumber Huber Engineered T.R. Miller Mill Hull-Oakes Lumber Vaagen Brothers Humboldt Sawmill West Fraser H.W. Culp Lumber Westervelt Idaho Forest Group WestRock Idaho Timber Interfor U.S.

Environment, Energy & Safety Report 2018 METHODOLOGY The American Wood Council (AWC) is both one of the youngest and one of the oldest major trade groups in the nation. AWC was re-chartered in 2010, evolving from a number of predecessor groups. Immediately prior to the founding of the new AWC, the forest products industry was represented by the American Forest & Paper Association (AF&PA). AF&PA grew out of two - the National Forest Products Association (NFPA) and the American Paper Institute (API) - each, independent institutions with some common membership, representing the forest and wood products industries, and , paper, and manufacturers, respectively. AWC Member Data for 2010, 2012, 2014 and 2016 are from survey responses to AWC’s Environment, Energy & Safety Survey. For prior years, the data is from a similar survey conducted by AF&PA for its members with wood products operations. Note that survey data were collected for each year noted above in the following year, and then analyzed in the year after that. The set of respondents may vary from one survey year to another. When data is used from other sources, such as from the Environmental Protection Agency (EPA) or Bureau of Labor Statistics (BLS), it is noted in the Report.

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December 2018 Detailing Data up to 2016 © Copyright 201​8 American Wood Council. All Rights Reserved.