1

Cloquet Mill Air Permitting SummaryJune 12, 2013

Presented by: Rob Schilling and Justin Finke

2 2

AGENDA

3 3

Sappi Cloquet Overview

Pulp Mill Overview:• 10 batch digesters• Capable of producing specialized cellulose or kraft paper

pulp• Capacity set by recovery boiler permit limit 904,200 tpy BLS

Paper Mill Overview: • 2 paper machines• 1 off-machine coater• Manufacture > 1,000 tpd of coated paper• Paper sold in rolls or sheets

Utilities Overview:• 3 industrial boilers (2 bark, 1 natural gas)• 1 recovery boiler• 3 steam turbines• 4 hydro electrical turbines• Generate ~90% of electrical use on-site• Fuel use is 85-90% renewable energy

4 4

Sappi Cloquet Overview

Environmental Overview:• EMS is certified by the ISO 14001:2004 standard• Onsite industrial landfill

• Waste to LF reduced by >85% over last 10 years • Onsite primary waste water treatment plant (no direct

discharges to St Louis River)• Final waste water treatment at WLSSD• Regulated by both individual and general storm water permits• Environmental department staffed by:

• Manager, 2 Environmental Engineers, co-op

5 5

Sappi Title V Permit Summary

Significant Emissions Units (control equipment):

• PB7, PB9 – bark fired power boilers (ESP)• PB8 – natural gas fired power boiler (None)• RB10 – black liquor recovery boiler (ESP)• Smelt Dissolving Tank (Scrubber)• Lime Kiln (ESP)• Bleach plant (OOZDED) (Scrubber,

COD)• IQS (Incinerator,

scrubber)

Source of emission limits:

• NESHAPs (Subparts S, MM, DDDDD, JJJJ)• BACT (PSD)• NSPSs• Modeling/NAAQS

6 6

Sappi Title V Permit Summary

Compliance Demonstration:• PB7, PB9 (COMS, CEMS, Stack Tests)• PB8 (CEMS)• RB10 (COMS, CEMS, Stack Tests)• Bleach plant (Stack Tests, scrubber flow and pH)• SDT (Stack Tests, scrubber flow, delta P, nozzle pressure)• Lime Kiln (COMs, CEMs, Stack Tests)• IQS (Stack tests, temperature, scrubber flow and pH)

7 7

Cloquet Project History

1. Pulp Mill Modernization2. Project Hercules3. Project Athena

8 8

Project History – Pulp Mill Modernization

Pulp Mill Modernization

• Increased pulp production from ~500 tpd to ~1500 tpd• Required full EIS• Air Permit issued in 1993• Construction complete in 1999• Newest pulp mill in North America• Cluster Rule MACT compliant on startup – first pulp mill to

comply• Criteria air emissions reduced from:

• 1999 = ~ 45 lb/ton • Today = < 15 lb/ton

• Resulted in ~1000 tpd of pulp being sold as “market” pulp

9 9

Project History – Project Hercules

Project Hercules

• Fix market pulp “problem” by building new paper machine and eliminate market pulp sales

• $6MM in engineering and environmental review• EAW and major Air Permit Amendment completed

• Started Dec 2007, Permit issued Oct 2009• Project never constructed – multiple factors

10 10

Project History – Project Athena

Project Athena

• Fix market pulp “problem” by converting pulp mill to produce specialized cellulose

• ~$5MM in preliminary engineering and environmental permitting• Major Air Permit Amendment required

• PSD for ozone emissions• Triggered Cloquet Area Modeling Project

• Project Approved / funded November 2011• Total investment ~$170MM• Construction started April 2012• Start-up May 2013

11 11

Project History – Project Athena

Cloquet Area Modeling Project

• Modeling analysis involving USG, SMI, Jarden Home Brands and Sappi

• Project coordinated by MPCA, modeling completed by Barr and Wenck

• Analysis included NAAQS and Increment for:• PM10• PM2.5• NOx• CO

• Historical modeling for each site predicted compliance w/ all NAAQS at PTE emission rates

• Initial combined impacts of plumes predicted impacts > NAAQS• Final predicted impacts < NAAQS for all pollutants after changes

made by USG, SMI, JHB and Sappi

12 12

Project History – Project Athena

13 13

Air Permitting – What’s Next?

NAAQS (ozone, PM2.5, SO2, NO2)Boiler MACTBiogenic CO2/GHG deferral, PSD IssuesNSPS/MACT residual risk technology reviewsRegional HazeCSAPR/transport rulesEnvironmental justice

14 14

15

Defining Sustainability

“A sustainable corporation is one that creates profit for its shareholders while protecting the environment and improving the lives of those with whom it interacts.”

— A. Savitz, author of The Triple Bottom Line

16 16

people planet prosperitysocial environmental economic

Labor practicesCommunity impactsHuman rightsProduct responsibility

Air qualityWater qualityEnergy usageWaste produced

Sales, profits, ROITaxes paidMonetary flowsJobs created

SUSTAINABILITY

17

Customers Employees Communities

Three pillars of sustainability

People Planet Prosperity

Three key environmental issues

ResponsibleForestry

Energy and Emissions

Recycling and Recycled Fiber

Three key stakeholder groups

18

Thank you