The pulp and paper industry accounts for over 12% of total manufacturing energy use in the U.S. (U.S. EIA 1997a), contributing 9% to total manufacturing carbon dioxide emissions. In the last twenty-five years primary energy intensity in the pulp and paper industry has declined by an average of 1% per year.However, opportunities still exist to reduce energy use and greenhouse gas emissions in the manufacture of paper in the U.S. This report analyzes the pulp and paper industry (Standard Industrial Code (SIC) 26) and includes a detailed description of the processes involved in the production of paper, providing typical energy use in each process step. We identify over 45 commercially available state-of-the-art technologies and measures to reduce energy use and calculate potential energy savings and carbon dioxide emissions reductions. Given the importance of paper recycling, our analysis examines two cases. Case A identifies potential primary energy savings without accounting for an increase in recycling, while Case B includes increasing paper recycling. In Case B the production volume of pulp is reduced to account for additional pulp recovered from recycling. We use a discount rate of 30% throughout our analysis to reflect the investment decisions taken in a business context.Our Case A results indicate that a total technical potential primary energy savings of 31% (1013 PJ) exists. For case A we identified a cost-effective savings potential of 16% (533 PJ). Carbon dioxide emission reductions from the energy savings in Case A are 25% (7.6 MtC) and 14% (4.4 MtC) for technical and cost-effective potential, respectively. When recycling is included in Case B, overall technical potential energy savings increase to 37% (1215 PJ) while cost-effective energy savings potential is 16%. Increasing paper recycling to high levels (Case B) is nearly costeffective assuming a cut-off for cost-effectiveness of a simple payback period of 3 years. If this measure is included, then the cost-effective energy savings potential in case B increases to 22%. 2 3