Thank you, Mr. Chair and members of the committee, for this opportunity to appear today on behalf of Domtar.
The folks of this committee might know that Domtar is a world-leading provider of fibre-based products including various paper grades, market pulp, and absorbent hygiene products. We have annual sales that exceed $5 billion and approximately 10,000 employees operating in over 50 countries around the world. Domtar is driven by commitments to convert sustainable wood fibre into useful products that people rely on every day. Our company's origins lie very deep in Canada reaching back to the 19th century. Domtar is an acronym for Dominion Tar Company. Today approximately 25% of Domtar's manufacturing facilities are based in Canada, primarily in British Columbia, Ontario, and Quebec. We employ over 2,500 people in these three provinces. Our pulp and paper division, which is the group that I represent, operates 13 pulp and paper mills across Canada and the United States. Four of these mills are in Canada, as I mentioned, in British Columbia, Ontario, and Quebec.
We have a strong interest in the low-carbon bioeconomy. We understand and agree that building an economy based upon our abundant and renewable forest and agricultural by-products is a very good thing for Canada and for Canadian workers in rural areas. The bioeconomy will lower the country's carbon footprint, provide sustainable products to the global marketplace, and offer leadership in global sustainability. Beyond that, of course, at a company level, we feel that the growth and enabling conditions of the bioeconomy support a positive future for Domtar and support our strong business imperative for renewal.
Allow me to explain.
With over 150 years of history, Domtar knows how to reinvent itself as the markets change, so, as digital technology gradually reduces the demand for communication papers, which is one of our core products, we have begun to redeploy our assets for other fibre-based markets. This process has been ongoing for at least 15 years. I have worked in this context for the last 10 from a technology development point of view, speaking for myself.
At the same time that all of this is happening, we also feel the constant pressure of competitive forces from other forest product jurisdictions, so we're working in a very competitive environment. I'm happy to say that Domtar has been successful in the 10 years that I have been a part of it and, of course, successful all the while.
Some of our products such as communication papers have been operating with long-term secular market declines of between 2% and 3%. This has been happening for, as I mentioned, 10 years here, but for probably 15 years, we have seen the market for uncoated freesheet, for example, which is printing and writing paper that we all use, decline by over 60% from its peak. These macroeconomic factors have resulted in significant industry-wide pulp and paper capacity removal and repurposing. At Domtar we have not been immune to this. We have closed numerous facilities both in Canada and in the United States and have been very busy repurposing other mills for the future.
In spite of these challenges, Domtar sees great opportunity for renewal through innovation. We are committed to developing and maintaining a world-leading role for ourselves in the new global bioeconomy. Our approach in this development is to focus on the creation of biorefineries co-located with our existing pulp and paper mills; in other words, to take advantage of the existing infrastructure and supply chain and leverage that. That supply chain is one of our core assets.
Like an oil refinery, the biorefinery refers to manufacturing systems capable of producing a portfolio of products in support of a variety of market needs that will change with time and that must, therefore, be flexible and adaptable. So, there are not just the fibre and paper products that we currently produce but also a wide array of bioproducts, namely, biomaterials, biofuels, biochemicals, all derived from the renewable sustainable source, Canadian forests.
Our journey is well under way. As I mentioned, I have been working on this specific activity for 10 years. It has been my primary focus.
Across our company, besides my group, Domtar is working on the development, with several missions, of value-added bioproducts, their application, and their markets. One of the challenges in what we do here is that we're simultaneously trying to ride a bike and build it. We're trying to create these markets as we start to produce the products.
Our program is organized along five major product platforms. I won't go into details, but these platforms are essentially all of the components of the wood biomass that we use as the basic feedstock of our supply chain. We believe that these products exhibit market and transformational promise for the future. Our basic approach can be summarized according to four key strategic elements.
First, we understand the critical role of innovation in creating this bioeconomy. At Domtar, the way we approach this is with an open innovation methodology. We actively develop collaborative partnerships that include end-users, technology suppliers, universities, research institutions, government agencies, start-up companies, and government sponsors—all critical parts in advancing our innovation platform.
Second, along with open innovation, we actively engage in the advancements of technology through the operation of pilot and demonstration plants. I'm very proud of the fact that Domtar has been a world leader in this regard as it relates to demonstration of new bioproducts in association with existing pulp and paper industries.
The third element of our approach is that we seek to position ourselves as the enabler of choice. By that we mean that since we are big believers in, and in fact dependent on, open innovation, we want to be very good at open innovation. We want to create an environment where people come to us first with their ideas. The way we do that is first and foremost by being quick to make decisions, and based upon our reputation, we're actually doing projects rather than studying them, and doing them quickly and efficiently. We don't say yes to every proposal that's presented to us, but we will give a very quick and responsive assessment of whether or not we're interested.
The fourth tenet is that we ensure sustainability of third party certification of our feedstock supply. As pulp and paper operations, we primarily utilize residual from other forest product operations, namely sawmills. Whether through our own forest management practices or those of our residual suppliers, we believe that the sustainability of our forests is a fundamental tenet of bio-economy success. For those of you who have the meeting notes, they are printed on Domtar FSC certified uncoated freesheet.
There are several examples that we could discuss. Rather than go into great detail, I'll just mention them. For the most part, these are successful examples of world-leading projects that Domtar has executed. We've had several very high-profile failures as well. Since I'm responsible for those, I try to avoid discussing them. The key point here is that when you're attempting transformative innovation, it is a high-risk proposition with a high degree of uncertainty. A positive way of saying it is that there's a relatively low success rate connected to it. You have to be willing to accept that in going into this.
The examples include, first of all, the NCC commercial demonstration plant at our Windsor, Quebec mill, the first of its kind in the world for the manufacture of nanocrystalline cellulose. This was a joint project and partnership with FPInnovations to form a joint venture called CelluForce, which I understand you'll be hearing from as well. Of course, the facility was built with very strong support from NRCan and from provincial sources.
A second Canadian example is the successful development and commercial deployment of a proprietary, strength-enhancing, specialty pulp fibre developed by Domtar working in collaboration with the University of British Columbia and a community college, CEGEP, in Quebec. The facility is called Innofibre, in Trois-Rivières. This unique and valuable material was first commercially deployed in our Windsor, Quebec mill. It has since been rolled out in our entire manufacturing system, and we're trying to license the technology externally now. This is a really high-impact success story that started in Canada and was demonstrated and deployed in Canada.
We're also working on three additional groundbreaking demonstration projects in our Canadian system, all of which are supported by NRCan and by NSERC in collaboration with three Canadian universities and two federal research laboratories.
These involve the valorization of lignin by compounding it with thermoplastics and making lignin thermoplastic products, the integration of a fast pyrolysis system and gasification technologies integrated with our existing pulp mills for the generation of biofuels and value-added bioproducts, and, finally, the potential use of underutilized woody biomass for the generation and conversion of fermentable sugars.
Perhaps most importantly, here's what we're doing in terms of looking forward. Domtar and my team—this is a bit of a plug on my part—are in the project development stage for a world-leading multi-component, integrated biorefinery park at our flagship Windsor mill. This project would involve numerous first-in-kind innovations leading to several new bioproducts. It would establish a unique, market-adaptive, and flexible biorefinery park. This park would consist of interchangeable, forward-adaptable unit operations that can be reconfigured and used for early commercial scale deployment of new bioproducts. This would be the next part of the innovation chain after pilot demonstration. It would be actual early-stage commercial deployment, which is the big weakness in the innovation chain right now. Our hope is that the biorefinery park would significantly enhance our reputation as an enabler of choice and give Domtar a global competitive advantage in attracting and capitalizing on transformative technology opportunities.
The last area I would like to speak to is the innovation system within Canada. As a forest products company, Domtar has had access to the Canadian innovation system. I'd like to very briefly comment that we enjoy working in Canada. We have 25% of our footprint in Canada, but over 75% of our R and D activities are in Canada. That's because of the existing infrastructure, public policy, and sponsorship programs. Domtar supports, has been supported by, and makes extensive use of both the provincial and federal programs for activities across the innovation spectrum. There are many examples. The ones I'd really like to point out are NRCan, NSERC programs; collaborations with federal laboratories such as NRC and Canmet; and of course the universities. The universities in Canada are generating excellent people of whom we have a desperate need and have started to employ in significant numbers compared to the recent past.
In closing, we at Domtar believe in the low-carbon bioeconomy, and we are actively pursuing the innovation and renewal necessary for Domtar to further its growth. We look forward to continuing to work with all you in this journey.
Thank you very much, Mr. Chair.
Thank you, committee members, for the opportunity to share my views and comments this morning with you. Those views reflect my experience as a former federal employee with the Canadian foreign service, and recently, as executive director of bioindustrial development with an organization called Alberta Innovates.
Alberta Innovates is a provincial corporation dedicated to research and innovation. We have an arm that engages in research activity, but for the most part the various components of the organization fund research activities.
Since 2007 when I joined the organization, I've been working with both the agriculture and the forest sectors to identify opportunities for economic development and economic sustainability through new product and process development.
In many ways, we've been fibre agnostic. I know that your focus is the forest industry, but in many parts of Canada the forest industry is not that far removed from the agricultural industry. There is opportunity to combine the fibre stocks, to address the needs of a growing bioindustrial sector in the country. I would encourage a more agnostic approach, an approach that recognizes the value of all fibre, from agriculture and forestry.
Biomass is biomass, to many end-users. I'd even go so far as to suggest that municipal solid waste represents a very significant opportunity that can also be combined in the mix with agricultural and forest fibre. Lord knows here in the province of Alberta we generate enough municipal solid waste. I suspect it is the same all across the country. What we need to do is create programs that cross the boundaries, that allow for integration and allow us to tap into the various sources of feedstock for bioindustrial development.
We probably therefore want to make further investment to address the bigger questions of systems and logistics for effectively dispersing or transporting that biomass to facilities looking to utilize it. We need to support research and development into new products from biomass and processes for biomass conversion.
As was indicated by the previous speaker, where they've made investments in areas of opportunity, we too in Alberta have invested in a number of areas of opportunity, including advance materials with the focus as well on cellulose nanocrystals, lignin and the multiplicity of products that are envisioned from lignin, biofuels, and an increasing opportunity to make a variety of energy products from municipal solid waste.
Recent announcements in the province of Alberta have identified significant financial resources for climate change-related activities, most recently the climate change innovation and technology framework. That funding focuses heavily on GHG reduction, as well as job creation, economic development, and community stability. GHG reduction is probably the most significant target when it comes to those new funds.
This is an oil and gas province. There's a lot of activity focused on the oil and gas sector. No doubt a good portion of the CCITF funding will flow to the oil and gas sector. The existence of the oil and gas sector in this province creates opportunities for the forest sector that perhaps don't exist elsewhere in the country. It's from that perspective that I gain hope that as we move into the future we'll see greater emphasis on the bio sector, on bio opportunities, and on the opportunity to mitigate greenhouse gas emissions through bio means.
This opportunity for us is to use biological materials that would replace petro-based. When it comes to adhesives, perhaps lignin is the replacement, bioplastics from lipids as well. CNC creates the opportunity to move into very different realms than what the forest sector has explored in the past. Medical and electronics are all related to those special properties of CNC.
In this province, traditional forest companies have right of first refusal to the fibre resource. They operate under forest management agreements. That pertains not only to the traditionally merchantable bole of the tree, but also to the residual biomass. Many of those companies have looked at ways of diversifying their revenue streams through biorefining activities, at alternative products for development, and at ways to sustain their viability.
I give credit to the federal government for the bio-pathways project a number of years ago, where people looked at the opportunity to bolt new technologies onto existing mills in the country in a plug-and-play way that would not be too destructive when it comes to the traditional product lines but add new product lines and therefore new revenue.
However from outside Alberta, many non-traditional forest companies have been attracted by the vast amount of biomass that they've been told exists here. It's rumour. It's conjecture. It's a perception. They come to Alberta and they want to know where this biomass is. What it's comprised of? How much of it is there? I'm sad to say that up until a few years ago we couldn't tell them. We knew it. You could go out into the cutovers and you could see residual slash. You could go to mill sites and see piles of sawdust and whatnot, but quantification was very difficult.
We started a project called BRIMS, bio-resource information management system. We developed that through a private sector geotech company. Last week, January 24, we publicly launched BRIMS. It's an online interactive system that will allow any entrepreneur interested in tapping into the biomass resources of this province to point to a site on the map and determine how much biomass is available. You can find it at brims.ca. Try it. It's very easy to use, but it's very powerful.
With that, we're able to address the questions as to where the biomass exists. How available is it? That allows the entrepreneur to forge a partnership with the traditional FMA holder. Many FMA holders are looking for the big answer; they're not looking for the smaller opportunities. A small to medium-sized entrepreneur wanting to capitalized on biomass availability for his production facility is well-advised to form a partnership with an existing FMA holder.
I talked earlier about the fact that this is an oil and gas province. That means there are significant opportunities for existing forest companies to move into the bio-industrial space in a slightly different way in support of the oil and gas sector. In some respects that could mean assisting with land management, assisting with reclamation activities, utilizing biochar produced from mill facilities as a soil amendment, for soil remediation.
In some instances, it even means taking mill waste water and piping that to oil exploration sites as opposed to utilizing surface or groundwater, so it's a revenue opportunity for the mill, but it's a cost saver for the oil and gas company, and they don't have to butt their heads against regulations around groundwater usage.
From my perspective, where do I see the federal government fitting in? Well, I think we have a pretty good array of activities related to bioindustrial development in the province of Alberta, but I'd dearly love to work with cohorts in other provincial jurisdictions. For the last several years I've been trying to work with BIC, Bioindustrial Innovation Centre, out of the London area. It's difficult to do, and my funding source is from the Province of Alberta. Their funding source is from the Province of Ontario, and you're not permitted to spend in the other's jurisdiction.
The federal government can solve that problem. You could serve to harmonize, bring people together in partnerships, and facilitate cross-boundary initiatives.
In terms of government and federal agencies, we'll launch a lot of our projects in our Canadian system, simply because there are existing programs and facilities and infrastructure that are easy to access. Without going into specific programs or policies, one institution that has been there for decades—my entire professional life—has been NSERC, which sponsors basic research at the university and even at the national lab and research institution level.
NSERC programs exist that make it very easy for us to tap into extremely talented young people and their professors, and leverage what I'll just call the research culture, because it's not just universities. That's something we try very hard to take maximum advantage of.
That's an example of a program that is hitting on a lot of cylinders, because one of the things we desperately need is talented young people. As an industry we were shrinking through the last 10 years. We did not take up new talent as quickly as we should have, so we ended up with a bit of a logistics nightmare, wherein we have a whole bunch of people retiring, we have an empty middle, and we're trying to fill the front end of the pipeline. That's why the federal support for basic engineering and postgraduate engineering and science, and the facilitation of industry being able to collaborate with those people in-between or during their studies, through internship programs, are fantastic.
Policy-specific programs that are very useful are programs such as NRCan's IFIT and the new clean growth program, as I understand them. We're trying to actively leverage those, and they specifically go after certain policy objectives. We've found over the years that the best way to leverage that is to see how we align with the policy objectives. For the most part, we do.
For example, we've utilized the IFIT program, which is an NRCan program. The IFIT program recognizes that the critical gap, at least in Canada, was not so much the research and development, which was excellent, but that next stage. How do you take this and go into a demonstration-deployment phase?
Where policy could help is by identifying where the gaps and weaknesses are and encouraging industry and corporations such as ours to collaborate and partner in taking risks in those directions.
Good morning and thank you for the invitation.
My name is Chris Struthers. I run a small electrical power engineering consulting business in Penticton, British Columbia. My specialty is electric power. I'm not a forestry expert, but my work does take me to a wide range of clients in the resource industry, including pulp mills and biomass generators. I've worked on four different biomass power generation projects in the last few years and am now starting to work with some new clientele who have some very exciting innovative technologies that are showing a lot of promise for the forestry business. Particularly, these are sort of marriages of existing technologies that have been improved, and so the cross-pollination between different disciplines is starting to show up in some really interesting combinations.
The first one I'll talk about briefly is the marriage of traditional biomass combustion to power generation with large-scale grid battery technology. Thermal biomass power generation is not a particularly new thing. You burn wood to heat a boiler or some kind of fluid heat exchanger, and that can drive a turbine to make electricity. There's a thermal challenge with this, though, for some applications. It takes a long time for a thermal system to heat up or to cool down. It can't respond to load on demand very quickly. A good analogy is using wood to heat your house. If you've ever tried to fire up your wood stove on a minus 20 day to try to get your house heated up right away, you'll know it takes time. Conversely, it takes time to cool off again when you don't need that heat. The same challenge exists when you're trying to make electricity from biomass.
It makes it impractical to use biomass generation for, say, remote communities where the power load fluctuates during the day. Everybody gets up in the morning, fires up the toasters and the coffee makers, and you get a peak demand on the grid. You get another peak usually around suppertime, and then you get very little power consumption overnight. A traditional biomass generator has trouble with that.
Now we're seeing, with the rapid improvement in battery technology, that the marriage between biomass generation and batteries now makes for very interesting and worthwhile combinations specifically for remote communities that are not connected to the grid. Take, for example, a small remote community of, say, 500 people working on diesel power. Diesel engines are the generator of choice because you simply fuel them up, and the load can go up and down to match the demand very easily. Now, of course, you can take a biomass generator that is sized for the average load for the day, so it cannot provide all the power for the peak time, and it has to run fairly consistently over a 24-hour period. You couple that with a large-scale battery system and now you have a winning combination.
To give you an idea on the cost savings, diesel power is generated in a remote site for a cost somewhere between 25¢ and 35¢ per kilowatt hour. Biomass-plus-battery technology offers significant savings in the order of 15¢ to 20¢ per kilowatt hour. That includes the amortization of equipment, things like battery replacements, and the long-term costs. It's financially looking like a real winner, and of course the impact on greenhouse gas emissions is a very attractive improvement. Obviously, depending on the type of renewable feedstock you're using, you could essentially say it's almost carbon neutral. Certainly compared to diesel power it's a very attractive opposition.
One of the challenges in getting this technology in place is the inertia and the lack of willpower from power generation companies that have established ways of doing things, and finding the investment and capital to put it together.
The second technology I'm going to talk about briefly is the marriage of biomass gasification with another technology for gas to liquids, which is used to produce biodiesel, diesel fuel.
Just to give you a rough idea of what's doable, one cord load of typical pine firewood, if you like, can be converted into enough biodiesel fuel, roughly one barrel, to drive a mid-sized pickup truck from Ottawa to Toronto and back. One cord load goes into one barrel. It's quite a neat conversion.
There's a bit more to it than that. The process starts off with wood chips that get dried using waste heat from other parts of the process. We try to reuse as much of the off-product as we can, including waste heat. The waste heat is recycled and used to dry the wood chips. The wood chips are fed into what's called a pyrolysis chamber, where heat and pressure break it down into synthetic gas, also known as syngas, which is hydrogen and carbon monoxide. The waste product that comes out of the bottom is biochar, which is a clean charcoal source, which has a commercial use for soil enhancement. It's very good for replenishing soil, and it helps with moisture retention and things like that. Another very interesting property of biochar is that it essentially sequesters the carbon. In this process, some of the carbon in the wood will be sequestered if the biochar is put to use elsewhere.
The gas, of course, is the most interesting product coming out of it. It's converted to liquids using what's called the Fischer-Tropsch process. The hydrogen and the carbon monoxide basically get converted into longer hydrocarbon chains, such as diesel fuel. The technology is not new. It was invented in Germany in the thirties, and up to 25% of their vehicle fuel in the war effort came from this technology via gasified coal. So it's been around for a long time. There are some large commercial plants converting natural gas to diesel fuel in South Africa, Qatar, and Malaysia. These are huge, large-scale plants producing several hundred thousand barrels per day between them.
What's different about the technology now, and why is it of interest to the forestry business? When you combine this technology with the gasification of biomass, obviously you get a biodiesel, which is an attractive product. One of the interesting things about one of my clients is that they have managed to downscale the technology. Instead of having to build these huge, massive billion dollar complexes, they can get away with as little as 300 barrels a day of output and still be economically viable. This makes it very interesting for distributing this sort of system to locations that are smaller centres, more remote centres, where they have an abundance of both biomass and natural gas, and, of course, don't have refining capacity. They import all their diesel fuel. I'm thinking of areas like Peace River region, for example, that import huge quantities of diesel fuel for all their industries. They have an abundance of natural gas and an abundance of forest products. These would be ideal locations for this kind of technology.
Regulatory-wise, there are a lot of advantages to biodiesel for greenhouse gas emissions. We're seeing the development of Canada's clean fuel standard. A lot of provinces already have incentives or regulations in place for blending the fuel. This biodiesel, when blended, really makes a superior fuel. It's very clean and has almost no particulates from the biodiesel component, so you don't get any smog from it, and when it's blended it makes the base fuel even cleaner. It obviously reduces the greenhouse gas intensity of the total fuel, which is a big target in the market. It helps upgrade a low-quality fuel, and one of the very useful properties is that it's temperature stable. Some of the biofuel additives at the moment have problems in winter conditions. They're not temperature stable, whereas the biodiesel from these processes is very useful for cold places.
The economics are now there. One of my clients is in the process of siting a biomass-to-diesel fuel plant in the south Okanagan. They're in the process of dealing with the landlord and the permits now. Some of the other spinoffs are going to be waste heat. Some of the waste heat will be piped to greenhouses, potentially.
The process also produces clean water, which can be used for irrigation. There's, of course, the biochar, which again is very good for intensive horticulture. It's very good for soil enhancement. So there are a lot of real advantages.
Thank you, Chair and members of the committee.
My name is Pascale Lagacé. I'm the vice-president of Environment, Innovation and Energy at Resolute Forest Products. I'm accompanied by Alain Bourdages, the vice-president of Innovation and Energy. We are very pleased to be here today to speak to you on behalf of Resolute as part of your study on the secondary supply chain products in the forest products sector in Canada.
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue papers, wood products, newsprint and specialty papers, which are marketed in over 70 countries.
The company is also a major player in supporting and deploying innovations in the forest products sector in Canada.
Our business starts with the great privilege of sustainably harvesting large areas of Canadian forest, then focuses on extracting as much value from that precious resource so that nothing is lost. For the last century, the forest products supply chain remained largely unchanged. Logs from the forest would be brought to a sawmill, where they would be turned into construction lumber. Secondary products such as bark, chips, or sawdust would be dispatched to the highest value use and input into pulp, paper, board-making, or fuel to generate energy to support those same manufacturing activities.
But more than anyone else, we recognize that this supply chain is undergoing profound changes. Significant trends, especially in printed media, led several years ago to a shift in Resolute's business strategy and in a repositioning of its activities toward products most likely to offer features and attributes that will remain attractive to consumers over the next decades.
This thinking also led to the conclusion that changes in certain consumer habits and preferences could also create opportunities and be a chance not only to explore new alternatives based on the properties of forest fibre all along the supply chain, but also to develop new business models.
For example, as you may have seen last week, FPInnovations, one of the leading forest products research organizations in the world, and Resolute Forest Products were proud to announce they were joining forces through a strategic research alliance, investing in the transformation of Canada's forest sector through the implementation of a TMP-Bio pilot plant in our Thunder Bay mill in Ontario. This project will develop processes that utilize equipment and fibre traditionally used to manufacture newsprint and other paper grades and repurpose them to produce biochemicals from sustainably harvested non-food sources.
We are also creating partnerships with small and medium-sized companies that bring innovative solutions to the challenges we are facing. You may have heard of Serres Toundra, a joint venture between local entrepreneurs and Resolute, that have made the first Canadian deployment of a European greenhouse technology that is now in operation, occupying an area of nearly one million square feet next to our Saint-Félicien pulp mill. Using waste heat from the Resolute facility, Serres Toundra has the capacity to product approximately 45 million cucumbers per year.
Some would say this is already an excellent example of a successful secondary supply chain initiative, but we are not stopping here. We have also announced we will integrate a first of its kind enzyme-enabled carbon capture technology on our pulp mill site, which will capture and recycle carbon dioxide emitted by our pulp-making operations and inject it into the greenhouses to optimize crop growth. This technology was developed by CO2 Solutions, a Quebec City-based technology company.
We are not waiting for others to bring novel technologies and market applications to us. In 2014, following the discovery by FPInnovations of its patented cellulose filaments technology, Resolute created a joint venture with market pulp rival Mercer International dedicated to research and development of cellulose filament applications outside the traditional forest products business. In short, we created a start-up company with one of our biggest competitors. This company is called Performance BioFilaments, and I understand its managing director will appear before this committee later this week.
Through these various initiatives we believe we gained some knowledge of the challenges of optimally using Canada's forest resources in the 21st century. First and foremost, forest fibre cannot be developed in a linear fashion, not unlike petroleum. To extract maximum economic value out of a harvested tree, the resource has to be refined multiple times through multiple processes and into multiple products.
In other words, because of economies of scale and the chemical complexity of forest fibre, we are deeply convinced that the primary supply chain has a role to play in the development of next-generation technologies and non-traditional products. Integration is the best way to extract the most value from each tree.
It is clear to us that the policies and programs of the Government of Canada that would be the most appropriate to support the development of the forest products industry need to focus on the following elements.
First is federal support for venture capital. As you probably know, the investments in forest industry transformation program that provides financial assistance for innovative projects through a rigorous selection process has historically been extremely popular with the industry.
This particular program has, each time, attracted novel projects for which the requests for financing largely exceeded the available funding envelopes. We have no doubt that the new clean growth program put in place by Natural Resources Canada will be as successful. This type of approach not only needs to be pursued by the Government of Canada, but also needs to be broader.
Second, Canada's research and development capacity in this industry must not only be maintained, but also aligned with the interests of both the traditional and non-traditional industries. Partnership funding programs for small, medium-sized and large businesses, as well as research institutes, should be enhanced, not only to support the traditional industry, but also to support all the players in the market.
Finally, all stakeholders involved in forest management and development in Canada need to recognize that it is crucial that public policies seek a healthy balance between preserving the biodiversity of Canada's forests, reducing Canada's environmental footprint, including greenhouse gases, and stimulating the social and economic development of many regions of the country. As an example, trees converted into wood products deliver significant environmental benefits because they continue to sequester carbon dioxide, the most common greenhouse gas. As such, the use of 1 cubic metre of construction lumber removes 0.9 tonne of CO2 from the atmosphere.
For Resolute Forest Products, the development of forest-fibre based biotechnologies will only be able to thrive if the raw material that is the source of all these advancements is harvested globally in a sustainable way, which is currently the case, at a competitive price, no matter who is doing what in the value chain.
In closing, we would like to thank you for the opportunity to speak with you today. Alain and I would be happy to answer any questions you may have.
I will answer the first question.
In the case of TMP-Bio, our investment is $3.5 million, $2 million of which is in capital, strictly for equipment, and then another $500,000 a year for operating support. We are not only there to install equipment, but also to run it, test it and complete the project. The $21 million also includes a large research and development component, partly funded by the Government of Canada, through Natural Resources Canada, and the Government of Ontario.
As a member of FPInnovations, Resolute Forest Products is working on research and development and facilitating the integration in an industrial setting through its Thunder Bay plant. That is part of the learning inherent to project deployment.
We will also support FPInnovations, whose employees will be the ones running the plant. Of course, they are on site at our facilities. So we will collaborate by providing services, including by providing insight into future technological development and by pointing out what pitfalls in terms of marketing must be taken into account for this project.
So we are involved both financially, since we are investing $3.5 million, and operationally, since we are helping lead the research, which will be available for the entire industry through federation members.