Report on the Current and Future Significance of Water to the Paper Manufacturing Sector in Scotland

The Scottish Paper Industry

1. Paper has been made in Scotland since 1591 when Mungo and Gideon Russell set up a mill at Dalry in Edinburgh. Whilst that mill has long since passed into history, the Russell name still exists in Scottish papermaking. Now, as then, access to water was the basis of the industry and remains a key factor in paper mill location.

2. Although markets are now global, the origins of the industry can still be seen in the locations of Scottish mills. Nine of the twelve 12 paper mills in Scotland are concentrated in the Forth/Clyde valley and Aberdeen. Apart from readily available water, the rags used as raw materials and the customers needing paper were in towns and cities, dictating where paper mills were built and using the canals and rivers for transportation.

3. The first papermaking machine installed in Scotland was at the Peterculter mill in 1807. Many of the early machines were watered powered. It was not until the middle of the century that steam took over as the power source, which also allowed the introduction of steam filled cylinders on the machine to improve drying. Over the next century, the drive for better, more reliable, all year raw material supplies led to esparto grass and then trees being used as fibre sources.

4. The structure of the industry has always been different to that in England. High quality graphics papers has been a focus, whether supplied as 10-15 tonne reels for high speed printing presses or as cut sheets for such as security papers, books, advertising, archive purposes and office printing and copying purposes. Recent trends in personal computer and associated home printing and copying have introduced a broader, if low volume, customer base.

5. Most mills use imported, treated woodpulp for raw material, although one graphics mill produces mechanical pulp from trees. Two other mills use recovered paper as raw material and produce papers for the plasterboard and packaging industries. Neither tissue nor newsprint is produced in Scotland nor is there a manufacturer of chemical pulps.

6. The Scottish paper industry has learned to adapt to wider competitive pressures over the last several decades, but even so, 5 mills have closed since 2000. Although cost efficiencies are constantly under review, continuing pressures from currency fluctuations, global economic downturn, low priced imports, and energy pricing and regulatory changes have eroded margins to the point where most mills see little profit.

7. The annual economic value of the sector to the Scottish economy in 2003 is summarised as follows:

8. In addition, there is an indeterminate number of people both directly and indirectly dependent on the industry for an income. This is especially important as a number of mills are in local communities rather than larger conurbations.

Use of Water

9. All paper mills in Scotland are permitted under the Pollution Prevention and Control (Scotland) Regulations 2000 (PPC). All data are available on SEPA's public registers. This includes efficiency of water use (and so by inference, "licensing" the amount abstracted) as well as discharge quality criteria and extends a legal structure that has existed since 1974.

10. Improved efficiency has resulted in major reductions in water demand, but it remains a fundamental part of the paper making process. Apart from steam and power generation, water is needed to separate the fibres in the raw materials and to carry them onto the papermaking machine so that the structure of the new sheet forms properly. Unless this happens, the paper quality will not be good enough for later processes such as printing. The water is then recovered and treated. The extent of re-use depends on product specification. The focus on graphics and speciality papers means the opportunities for reuse are more restricted by product quality criteria. Customers will not accept off-colour papers or marks due to contaminants being carried over from previous water use. Cleaning can remove larger solid contaminants, but adding more chemicals in intensive treatment to allow re-use is a questionable practice environmentally, as well as making final treatment before discharge more complex. Currently, there are several studies under way in the wider UK industry on the potential of ultra filtration techniques and these are considered in the "Future Measures" section.

11. Most Scottish paper mills use ground or surface water for process and cooling purposes. The only reason for not doing so is because of salt or other mineral content. Generally, mains water is only used for catering and hygiene purposes. The used process water is then either treated in-house under the PPC permit or discharged as trade effluent under contract with local sewage providers.

12. All paper mills have boiler plant to generate steam, which then passes though banks of cylinders on the papermaking machines to dry the paper web. The residual heat is then used for ventilation to improve moisture removal and for hot water and heating in other areas of the mill. Some Scottish mills generate electricity as well using Combined Heat and Power plant (CHP). These often offer twice the efficiency levels of imported power from utility generators. The paper industry has one of the best balances between heat and power demand to make the most of the potential efficiencies such plant offers, but currently, the economics of existing CHP are very questionable due to high gas prices. New investment in CHP is not taking place.

13. A small, but positive contribution to Scotland's renewable obligation is also being made by the industry through water turbines. A number of mills have reinstated these and are reviewing the benefits, as they are very flow dependent. Where SEPA considers this necessary, which could, for example, concern turbine condenser cooling water from steam turbines, temperature is a PPC permitted condition. Adequate flow being available from surface waters is an important factor in stabilising the temperature of these efficient power generators.

14. Overall, the data show that although there are substantial inputs of water, only a small proportion is lost. In effect, water is a carrier in the process rather than being consumed. Not all of this is returned directly to rivers as effluent volumes going for external treatment will be discharged at other points. Often, effluent from paper mills is welcomed by those treatment companies as they provide dilution that they would otherwise have to pump from new sources themselves. Indicative figures for water in the Scottish paper industry are as follows. These do not include water turbines as this distorts the data in terms of mills usage, as the turbines are positioned in the water course and the water passes through.

The trend in PPC permitting is to require mills to retain rainwater within the in-house system. In effect this equates to mills being "bunded". This means that comparable data could be more difficult in future with the most immediate indicator being mills discharging more than they abstract.

Costs of Use

15. Mills continue to be affected by substances in incoming water, particularly when these are variable over short periods. For example:

• the trend towards very heavy downpours in late autumn and winter raises the levels of humic and fluvic acids and produces peaty coloured river flows. This discolouration affects the paper quality and the water cannot be used for boiler purposes without additional treatment;

• high pH levels resulting from run off from agricultural land affects the paper making process which is set up slightly to the alkaline side of neutral;

• nutrients, which may come from either agricultural run off or sewage treatment, also affect paper quality and may interfere with effluent treatment systems.

• bacteria from river system require use of biocides to sterilise process water before use.

16. All of these can be neutralised, but this requires increasingly sophisticated investments both to identify variability and then to treat chemically. An example of the existing costs involved for one mill for various water treatment processes are:

• Incoming water for process purposes: £100,000 per annum

• Demineralisation of boiler water: £183,600 per annum

• Effluent treatment: £433,000 per annum + £300,000 for biosolids recycling.

This is in addition to the capital costs, which will be in the range £0.5 - £2.5 million.

17. Whilst mills are generally treating water discharges for materials added during their manufacturing process, those mills recovering and recycling paper are paying to deal with materials extracted. These will have been added to the surface by other processes in the supply loop. The consequence may also be that the mill finds itself in breach of its PPC permit in circumstances for which no responsibility should ensue.

Trends in Use

18. Traditionally, paper has been seen as closely linked to change in GDP. That link is becoming less obvious, particularly for the Scottish industry, which has created export opportunities. This must continue if the future of these mills is to be assured. All of the graphics mills using imported pulp as raw material are often competing in markets with products from those same pulp producing companies. The declining UK manufacturing base has also affected packaging concerns, where products are now imported complete with packaging produced in, or close to, the country of origin.

19. Much depends on product trends and changes, but this is by no means the only potential influence. Incremental change alone would be expected to be matched by efficiency improvements leading to little overall change in water demand but an improvement in relative efficiency. The more difficult question is whether there will be new investment in the Scottish industry, which is inherently linked with Scottish economic and environmental policy.

20. At present, Scotland has only two mills that recycle recovered paper and these manufacture packaging and building board grades. Newsprint can be made from 100% recovered paper, yet there is no production capacity in Scotland. Similarly, tissue, the growth market, has no Scottish production capacity either. If investment is made in such capacity, (which means 400,000 tonnes and 50,000 tonnes respectively), then water demand will increase by between 9.5 - 10 million cubic meters per annum on current best practice data.

21. The need for major water investments is probably limited. Most Scottish paper mills made changes to watercourses in earlier eras to access far higher throughput levels than are now needed. This suggests that the primary need will be to maintain existing facilities rather than to make fundamental change. This has also led to wider benefit as public access is often given to these water resources as an amenity benefit, all of which are maintained at cost to the mill.

22. Any new investment in paper machines may alter this of course, either in terms of bringing water to add to existing capacity or for handling materials and products in dock type arrangements. Similar results could occur if mill supplies come under pressure due to surrounding development and sources further away are needed.

23. Other factors affecting change are:

• that landfill reduction commitments will become increasingly stringent. Whilst export markets will become part of the trading picture for recovered papers, quality requirements will also move into line with those needed in the wider UK industry;

• if customer specifications change to include higher levels of recovered papers in traditional graphics grades. This is still unlikely to affect water demand significantly provided the quality of recovered paper is maintained. Contaminants have an adverse effect on the process and require capital investment at levels often removing the commercial viability. If this requirement is met and the market demand is judged as long term, Scottish papermakers should benefit. At present, though, there is little evidence of the wider market making this specification change and some doubt as to whether quality can actually be maintained in grades in which a large part of the Scottish industry specialises;

• trends to shorter order books and "just in time" style practices. Mills that produce a range of products, particularly where colour is involved, have to balance carrying stock against being able to supply against limited response time to gain the order. Often this means changing colours and washing down more often between product runs. The increasing emphasis, for example, on hygiene with those products likely to be used in personal or food packaging is another factor meaning increased wash through of all systems to prevent the build-up of microbiological contaminants. These are important, of course, but these trends will move water consumption away from the optimum.

Measures available to the Sector

24. Over the years, the UK industry has carried out a number of projects with various Government agencies on water reduction techniques. Apart from the normal housekeeping practices, this had led to design improvement on pumps and associated equipment used to move water around mills and the maintenance arrangements. The paper sector is one of a few where water systems dictate the design of the process and need their own management system.

25. There is much interest in the potential of alternative final treatment technologies to reduce costs, as shown in the costs data, effluent treatment plant is expensive both to install and to maintain and involves large standing costs due to the size of the "footprint". It is also becoming increasingly expensive to discharge treated water to the environment, even though the discharge quality is specified in the PPC permit. Therefore there is much incentive to develop techniques that allow reduced water use by cleaning and recycling process water.

26. Earlier mention was made of ultra filtration techniques. Electro and membrane technologies are under consideration at present. Both are feasible on incoming water, where the variants are fewer and the rate of variation less marked. Most mills using surface abstraction have to treat incoming water to gain required quality and consistency. Increasingly, though, this is also needed for borehole water, due to nitrate addition. Several research projects are in hand to determine whether these techniques will work for treating paper mill effluent, but with little success so far.

27. Although low in toxic content, paper mill effluent is high in solids, whether pulp or recovered paper based. This means that frequent maintenance is needed and the variable colour and BOD content makes it difficult to maintain an optimal operating range. There is confidence that this or a similar technology will emerge and be proven over the next decade, but at present they are not viable.

Others

28. There is a strong connection between any paper mill and the surrounding environment. There is a specific example of this in Scotland that has been formalised in law and affects both paper mills and other users. The legislation provided for the construction of sluices to control the outflow from Loch Leven and for several miles of artificial waterway, or ‘cut’, to channel the river across its flood plain. The abstraction arrangements were put in place by the River Leven Acts of 1827 to 1835. The legislation also established the River Leven Trust to maintain those works and to control water flow with a duty both to minimise flooding and to provide adequate water supplies to industry served by the river. Water drawn from the Loch is governed by the level in the Loch and not the needs of the users.

29. The Trust is a statutory local authority, reconstituted in 1949 to include representation from Fife County Council (now Fife Council). The Board of Trustees consists of Fife Councillors and representatives of the active users of the falls on the river on which rates are assessed and levied to provide income for the Trust. The place of such a Trust in the Water Framework Directive structures is being discussed by the parties involved, but currently, the Trust carries duties for capital and revenue costs to maintain the structure of the channel. This is another example of an amenity with public access and an associated ecosystem that has developed coincidentally and is now established and accepted alongside the original purpose of industrial water supply.

30. Apart from the historic environmental and legal interactions, the industry is now concerned about the interface between modern laws. The Water Framework and PPC laws provide practical concerns at several levels, not least over future costs. Paper mills pay for a PPC permit, which currently is in the range £9000 - £15000, in addition to the operating costs and trade effluent charges referred to earlier. Whilst the PPC charge is to cover SEPA's inspection regime costs, PPC also requires SEPA to test a company's compliance with the principle of Best Available Techniques. Apart from requiring minimum discharges in terms of a balance of risk to the surrounding environment likely to be affected against cost of technical measures, this also involves minimising raw material inputs, including water.

31. It will be important to clarify the relationship between these laws, as PPC sectors are already paying for the technology that minimises water needs, as well as for treatment charges, whether direct or indirect. Implementing the Water Framework Directive must result in an equable basis for all users with procedures and associated costs based on realistic and necessarily achievable environmental criteria.

March 2004