Thank you, Mr. Chair.
Good morning.
Thank you all for inviting me to participate in this study. My testimony will be in English, but I will be pleased to answer any questions you may have in the language of your choice.
You're probably wondering why a forest sector innovation company came to this committee today—I do sometimes—but we care about energy.
Let me give you some facts to illustrate this.
Look at all the residue coming from sawmills today. Using that residue to produce energy would be equivalent to 5% of the electricity produced in Canada. If you take the residue in forests and do the same—you generate electricity—you would generate another 5% of the total consumption in Canada. We have the potential there for 10% of our energy. On top of that, if we were to convert the TMP mills, which are not competitive in the market today, to kraft mills, we'd have the potential to go from using 1.3 terawatt hours per mill to generating 1.9 terawatt hours per mill. We could make that shift towards electricity across the system.
If we did that, it would increase our robustness as an industry. We could export more electricity. More importantly, we could stabilize the future of hundreds of forestry communities, which are in a difficult position today. They depend on it. To secure sawmills from an extinction like that of pulp mills, which is currently happening, energy is our path forward.
Let me first say a few words about FPInnovations.
We are a not-for-profit independent research and technology organization. We work across Canada with the mission of supporting the industry so it can be more competitive, diversify and transform. Our goal is not to promote our technology to make profits, to develop science to publish or even to promote each idea from the industry. We simply serve across industry and government by using the tools of science to make sense of technology in a world filled, now, with misinformation, pots of gold and leprechauns at the end of long rainbows.
I'll go back to the forestry industry now, after leprechauns. Wood residue is generated in many ways and forms across the value chain. That's the challenge—30% to 40% of a log is transformed into residue and we need to monetize that. It's important. Today, pulp mills play that role. They transform the chips—the residue—into fibre that creates value. If they disappear...and actually we have seen so many examples of that happening. What constantly happens is that when a pulp mill disappears, four sawmills disappear. We lose the production of pulp and lumber at the same time.
We have looked at many options for that residue. There are a bunch of ideas out there—anecdotal, funny, non-market with no money to be made, or interesting. Energy is probably the most interesting approach because it's the only one that can be developed at the scale at which we're producing lumber.
Energy can take multiple forms. I'm not getting into a debate about which is best. We could do pellets, electricity, biofuel or bio-oil. We could do multiple things. In the end, we need an option that is compatible with the regions, the transport, the electricity transport and the markets. Our fibre costs, though, put us at a disadvantage. If I were to generate jet fuel, would I do it from Canadian fibre or Brazilian fibre? The cost of Brazilian fibre is much lower. Thus, if I had to invest a billion dollars to put in a mill, I would put it in Brazil unless we change the game—unless we look at putting the forestry industry and energy together in order to save both at the same time. There's a joint venture there that we need to do.
Think about the markets. All the witnesses here will tell you the same story: Energy keeps rising, over and over. Our electricity demand keeps rising, and extremely fast. Energy efficiency improvements will not get us there. All the booming technologies, as you said—whether or not it be AI data centres—require more and more energy and electricity. If global warming happens—should you believe in it or not, and you should believe in it—we'll need more cooling. That cooling will be provided by electricity, mainly, so electricity is key.
Of course, there are plenty of policy, social and technical challenges to consider, but we need, and should get, all the electricity we can for the future. It's an economical development tool, but it's also a matter of national security. In front of us, we have a growing need for electricity and energy, and we have a forestry industry that can generate the equivalent of 5% to 10% of current electricity production in Canada. We should move. Renewable will grow. Biofuel will grow. Pushing forward, we need to fulfill that need for electrification.
Biomass offers a carbon-neutral energy source and can be a bridge while other sources come online. We will need nuclear energy some day. We will need other forms of energy. We need to bridge there, because by the time we get nuclear plants, we'll be in trouble.
Understanding where we can go and reducing policy are the challenges we face as Canadians.