Domtar to Use PPGTP Funding for Major Upgrades at Dryden Mill

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Domtar's Dryden, Ont., Canada, mill will receive C$22.7 million in federal funding under the pulp and paper green transformation program (PPGTP) for two capital improvement projects that will increase the mill's operational efficiencies and its production of green, clean electricity. The capital investments will increase the mill's annual production of electricity by more than 128,000 MW hours, nearly balancing its production and consumption of electricity. This will result in the offset of tons of greenhouse gas emissions annually.

Domtar, one of 24 pulp and paper companies across Canada that qualified for PPGTP credits, will use the funding at Dryden to:

• Install a second steam condenser to operate its wood waste boilers at a higher capacity and its turbine more efficiently. This measure is expected to produce an additional 43,000 MWh of electricity per year.
• Install a second high-pressure turbogenerator to increase the production of renewable electricity through use of high pressure and high temperature steam generated by the recovery boiler. This measure is expected to produce an additional 85,400 MWh of electricity per year.

These upgrades will eliminate the need for Domtar to purchase more than 11 MWh of power, and will nearly balance the mill's production and consumption of electricity, enhancing its environmental and commercial sustainability.

The Dryden mill has been in operation since 1911 and was acquired by Domtar in 2007. It produces bleached softwood kraft pulp and handles chipped fiber through to finished pulp production and packaging.

The pulp and paper green transformation program provides companies with credits based on their use of black liquor ($0.16/liter) between January 1, 2009, and December 31, 2009. Firms then have until March 31, 2012, to draw on these credits to finance approved capital projects that offer demonstrable environmental benefits, such as improvements to their energy efficiency or their capacity to produce alternative energy. The program is capped at $1 billion and total payments to the Canadian industry will not exceed this amount. Thirty-eight pulp and paper mills across Canada, representing 24 companies, generated credits under the pulp and paper green transformation program based on their 2009 production levels of black liquor.