A paper mill can spend millions of dollars improving a paper machine and see the return in additional tonnes.

Water conservation is harder to put into the same capital-allocation model.

A project that reduces freshwater demand may improve resilience, reduce pumping and treatment requirements, lower wastewater flows or protect a mill during drought.

But those benefits do not always produce the short payback period required to compete with production projects for capital.

Domtar has taken a different approach.

Since 2023, the company has operated a dedicated Water Reduction Capex Fund that reserves part of its capital budget specifically for mill projects designed to reduce water use.

Twenty-four employee-led projects have now been completed across ten paper and packaging mills.

Domtar says the combined projects are reducing annual water use by more than 2.3 billion gallons — roughly 8.7 million cubic metres per year.

That is an average reduction of more than six million gallons per day across the participating projects.

But the larger lesson may not be the volume.

It is the mechanism Domtar used to find it.

The projects do not need to demonstrate a financial return to qualify for the fund. Their primary objective is water reduction.

For a capital-intensive industry such as pulp and paper, that is a significant change in how one category of environmental investment competes for money.

Water Projects Normally Compete Against Production Projects

Every mill has a limited capital budget.

Operations teams may simultaneously want money for:

paper-machine upgrades;

recovery-boiler work;

pumps;

motors;

instrumentation;

automation;

quality improvements;

safety projects;

energy efficiency;

and maintenance reliability.

A water project can easily fall down that list if the business case is evaluated only through direct annual savings.

That is especially true where freshwater itself is inexpensive.

A mill may be able to withdraw substantial volumes from a river or lake at relatively low direct cost.

That does not mean the water has no operational value.

It still has to be:

pumped;

screened;

treated;

heated or cooled;

moved through the process;

and eventually treated again before discharge.

Water availability can also become a production constraint during drought or unusual watershed conditions.

Domtar’s funding structure essentially separates those benefits from the usual competition for short-term financial return.

The company says mill teams compete for the dedicated funding based primarily on the amount of water their projects can eliminate or reuse.

That can bring forward projects that might otherwise remain on a mill’s engineering wish list for years.

The First Ten Projects Saved More Than One Billion Gallons

The programme began as a pilot in 2023.

During its first year, seven mills completed ten projects that Domtar said would save more than one billion gallons annually.

The initiative later received the American Forest & Paper Association’s 2024 Leadership in Sustainability – Water Management Award.

Since then, the programme has more than doubled in scale.

There are now 24 completed projects at ten mills, with company-reported annual reductions exceeding 2.3 billion gallons.

That expansion is important.

A one-year sustainability competition can produce interesting ideas.

A recurring capital programme creates something different:

a pipeline of repeatable mill engineering projects.

The difference is whether water conservation becomes an annual operating process rather than an occasional environmental campaign.

Most of the Savings Come From Familiar Mill Engineering

The projects themselves are not based on one new water-treatment technology.

Many use familiar pulp-and-paper process principles.

One is white-water reuse.

During papermaking, large quantities of water drain through the forming fabric as the sheet develops.

That water contains fibre fines, fillers and other process materials and is commonly referred to as white water.

Instead of replacing every litre with fresh intake water, mills can capture appropriate white-water streams and reuse them elsewhere in the process.

Domtar says several funded projects are built around exactly this type of recirculation.

The engineering challenge is determining where reused water has sufficient quality for the next application.

Not every process needs fresh water.

And not every process can tolerate the same level of dissolved solids, fibres, temperature or chemical carryover.

Good water integration therefore asks:

Where is freshwater quality actually required, and where are mills using it simply because that is how the system was originally designed?

That question can expose substantial reduction opportunities in older mills.

Cooling Water Can Be Used More Than Once

Cooling systems provide another major opportunity.

A conventional single-pass system takes freshwater, sends it through a heat exchanger or piece of equipment once, and then directs it away from that use.

A closed-loop system recirculates the water.

Heat is rejected through a cooling tower or other cooling system before the same water is returned to the equipment.

Domtar says its projects include rerouting cooling water to cooling towers and converting open-loop cooling into recirculating systems.

The difference can be substantial because cooling loads often run continuously.

A relatively modest flow rate becomes a large annual volume when multiplied across 24 hours a day and hundreds of operating days.

That is one reason water-efficiency projects can be misleading when assessed individually.

A valve flowing slightly more water than necessary may look insignificant.

A once-through bearing or heat exchanger may appear trivial.

Multiply it across an entire mill and a full year, and the volume can become material.

Pump Sealing Is Another Small Change With Large Scale

Domtar also points to pump sealing.

Traditional packed pump seals can require a continuous flow of clean seal water.

Mechanical seals can dramatically reduce that requirement in suitable applications.

Flow regulators can also limit seal-water flow to what the equipment actually needs rather than allowing a constant uncontrolled supply.

Again, none of this is particularly exotic technology.

That may be the point.

The programme appears to be finding water savings not mainly through one large central project, but through many smaller changes embedded throughout mill operations.

For older industrial sites, that is often where efficiency potential sits.

A mill may have hundreds of pumps, cooling loops, showers and dilution points installed or modified at different times over decades.

Some were designed when water cost and water risk received less attention.

The cumulative opportunity can therefore be much larger than any single equipment item suggests.

Employee-Led Is More Than a Sustainability Slogan

Domtar emphasizes that ideas come from operators, engineers and maintenance teams rather than being prescribed solely by corporate sustainability staff.

There is a practical reason for that.

Mill employees know where water actually goes.

A process-flow diagram may show the intended design.

Operators know which valve has been left partially open for ten years because it prevents another operational problem.

Maintenance technicians know which pump consumes excessive seal water.

Process engineers know where white water quality is good enough to replace freshwater.

That operational knowledge matters because water consumption is distributed across the mill.

A corporate target saying “reduce water intensity by 20%” does not identify which pipe needs to change.

Mill-level experience does.

The capex programme gives those local observations a way to compete for funding.

Nekoosa Shows What a Portfolio of Small Projects Can Do

Domtar’s Nekoosa Mill in Wisconsin received the company’s internal Water Reduction Award this spring for a group of projects expected to reduce annual water use by more than 129 million gallons.

Nekoosa is a fully integrated specialty-paper mill with three paper machines and annual paper production capacity of approximately 168,000 short tons.

Domtar has not publicly broken the 129-million-gallon figure into a complete project-by-project engineering dataset.

That limits how far an outside analysis can go.

But the scale demonstrates why mills should look at water as a portfolio rather than waiting for one transformational investment.

One 5-million-gallon project may seem small.

Combine several projects around:

cooling;

sealing;

process reuse;

flow control;

and equipment changes,

and the mill-level result can become meaningful.

The Company Is Halfway to Its 2030 Intensity Target

Domtar’s current sustainability strategy calls for its Paper & Packaging business unit to reduce water-use intensity by 20% by 2030 compared with a 2020 baseline.

Its Q2 2026 sustainability update reported that water consumption had declined 10% through Q1 2026 compared with 2020.

On that measure, the business is halfway toward the 2030 target.

But another distinction is important here.

The target is based on water-use intensity, not simply absolute water volume.

Intensity relates water use to production.

That matters because a mill can consume less water simply because it makes less paper.

An intensity metric is intended to show whether the manufacturing process itself is becoming more water-efficient.

For industry comparisons, both figures matter:

absolute withdrawal tells us the total pressure on the watershed;

intensity tells us how efficiently each tonne of product is being produced.

A mill should ideally improve both where operating conditions allow.

Domtar’s Baseline Has Changed From Its Earlier Programme

There is also a reporting detail worth keeping straight.

When Domtar’s original programme received its AF&PA award in 2024, company material described the earlier target as a 20% reduction in water use per unit of product from a 2019 baseline.

Domtar’s current integrated sustainability strategy now explicitly uses a 2020 baseline for Paper & Packaging.

The current 2020 figure should therefore be used when discussing progress toward the company’s present 2030 target.

This is a small editorial detail, but it matters when comparing sustainability performance over several years.

Corporate targets can change as companies reorganize, merge data systems or update their reporting boundaries.

A percentage is meaningful only if the baseline remains clear.

2.3 Billion Gallons Is Not the Same as 2.3 Billion Gallons Consumed

Another distinction is even more important.

Pulp and paper mills withdraw a lot of water.

But most of that water is not permanently consumed.

Domtar says approximately 94% of the water withdrawn by its mills is treated and returned to the environment.

The remaining share leaves mainly through evaporation or in finished products.

That means the company’s 2.3-billion-gallon figure should not be interpreted as though those gallons previously disappeared permanently from the watershed.

Much of the avoided withdrawal would previously have been returned after treatment.

This does not make withdrawal reduction unimportant.

Reducing intake can still mean less water needs to be:

pumped from the river;

chemically treated;

heated;

circulated;

cooled;

and treated again as effluent.

It can also leave more water in the source during low-flow conditions.

But technically, withdrawal and consumption are different metrics.

A credible water story should distinguish them.

Water Reduction Can Also Reduce Energy Demand

That distinction leads to another operational benefit.

Moving water takes energy.

So does heating it.

Cooling it.

Aerating wastewater.

Pumping effluent.

Treating incoming process water.

Domtar’s Plymouth Mill has explicitly connected water reduction with energy savings in previous conservation projects.

The mill installed a large cooling tower to eliminate a once-through cooling system and later completed projects that reused process water and reduced freshwater demand. Domtar says three projects completed in 2023 and 2024 save approximately 18 million gallons per day at that site.

This is why the direct value of a water project can be wider than the price of the water itself.

A complete business case can include:

freshwater pumping;

treatment chemicals;

heating;

cooling;

wastewater treatment;

and sometimes production-risk reduction.

Domtar’s fund does not require those financial returns to approve a project.

But some projects can still produce them.

Plymouth Shows Why Water Is Also an Operational-Risk Issue

Plymouth also provides the clearest explanation for why Domtar increasingly uses the term water resilience.

The North Carolina mill takes freshwater from the Roanoke River near the coast.

Under normal conditions, river flow helps prevent salt water from Albemarle Sound moving upstream.

During drought conditions in 2022 and 2023, Domtar says the saltwater front moved upstream to within approximately one-quarter mile of the mill’s freshwater intake.

That changes water conservation from an environmental metric into an operational one.

A pulp mill cannot simply substitute saline water into a process designed around freshwater.

If the source becomes unsuitable, the mill has a production problem.

In that situation, every gallon of freshwater demand eliminated gives the site more operating margin before source-water conditions become critical.

This is why water projects should sometimes be evaluated in the same category as:

backup power;

critical spare parts;

dual sourcing;

and flood protection.

They increase resilience against a low-frequency but potentially costly constraint.

A Water-Intensive Mill Does Not Necessarily Have a Water-Risk Problem

At the same time, mills should avoid treating all water withdrawals as equally problematic.

Water risk is local.

A mill withdrawing a large volume from a water-rich watershed with strong seasonal flows may face relatively low availability risk.

Another mill using much less water in a drought-prone or highly competed watershed may face greater exposure.

Water quality can also matter as much as quantity.

Domtar itself notes that incoming water conditions differ by location because of:

natural chemistry;

upstream discharges;

land use;

and seasonal variation.

So a corporate reduction target is useful for driving efficiency.

But mill-level capital decisions should still be based on local watershed risk.

A gallon saved at one site may have more strategic value than a gallon saved elsewhere.

Closed Loops Also Create New Engineering Constraints

There is another reason mills cannot simply recycle all process water indefinitely.

Every time water is recirculated, dissolved and suspended materials can accumulate.

Depending on the process, that may include:

salts;

fines;

dissolved organic material;

microorganisms;

process chemicals;

and heat.

Higher closure can affect:

corrosion;

deposits;

felt and wire cleanliness;

sheet quality;

chemical efficiency;

odor;

and microbiological activity.

Water reuse therefore has an optimum point.

The correct objective is not:

zero freshwater at any cost.

It is:

use the lowest amount of freshwater compatible with stable product quality, equipment reliability and environmental performance.

That is why mill-level engineering knowledge is essential.

A stream suitable for cooling may not be suitable for a high-pressure paper-machine shower.

A white-water stream useful for stock dilution may not meet the cleanliness requirement of another application.

Successful closure is selective.

Mechanical Seals Also Need Application-Level Validation

The same caution applies to equipment upgrades.

Replacing packed seals with mechanical seals can substantially reduce seal-water consumption.

It is not automatically the correct solution for every pump.

Mechanical seals have their own:

capital costs;

installation requirements;

maintenance needs;

failure modes;

and sensitivity to operating conditions.

Likewise, reducing cooling-water flow too far can increase equipment temperatures and reduce reliability.

Water conservation therefore has to be validated against the primary function of the equipment.

A mill that saves water but causes additional pump failures has not optimized the system.

This is one reason employee-led proposals can be effective.

The people submitting them often understand the specific operating constraints around the equipment being changed.

Dedicated Environmental Capex Changes the Decision Rule

This may ultimately be the most transferable part of Domtar’s programme.

Companies often set environmental targets centrally and then expect individual mills to fund the work from normal budgets.

That creates a structural problem.

A mill manager may support a 2030 water goal but still choose a production reliability project when both compete for the same capital this year.

The choice can be rational at mill level even if it slows the corporate environmental target.

Domtar’s Water Reduction Capex Fund changes that incentive.

Money is already reserved for water.

The competition is therefore:

water project versus water project

rather than

water project versus the next production bottleneck.

That is a very different capital-allocation architecture.

For companies struggling to move sustainability targets from presentations into engineering work orders, the funding mechanism may be more important than the specific technologies being funded.

But “No Financial Return Required” Should Not Mean “No Business Case”

There is still an important discipline required.

Removing the payback hurdle should not mean approving projects without economic scrutiny.

Capital still has an opportunity cost.

A useful water-resilience proposal should identify:

annual withdrawal reduction;

capital cost;

operating cost;

maintenance requirement;

energy impact;

water-quality effects;

production risk;

and expected equipment life.

It should also identify why saving that water matters at that particular mill.

If two projects each save 50 million gallons annually, but one costs five times as much and operates in a low-risk watershed, the projects are not necessarily equivalent.

The absence of a required financial return can expand the investment horizon.

It should not eliminate prioritization.

The 2.3-Billion-Gallon Figure Needs a Baseline Too

Another question industry readers should ask is how individual project savings are calculated.

Domtar describes the 2.3 billion gallons as annual reductions generated by 24 projects.

But the public article does not provide a facility-by-facility table showing:

pre-project flow;

post-project flow;

operating hours;

metering methodology;

or verification period.

That does not invalidate the number.

It means the figure is currently a company-reported aggregate.

For technical benchmarking, mills would benefit from more normalized information.

For example:

gallons saved per tonne of production;

capital dollars per annual gallon avoided;

energy savings associated with the reduction;

and project persistence after one or two years.

Those figures would make the programme much more useful to the wider industry.

The Best Projects May Be the Ones That Remove Freshwater Without Changing Production

That is ultimately the attraction of many of the examples Domtar describes.

White-water reuse.

Cooling-water recirculation.

Mechanical seals.

Flow regulators.

These projects are generally trying to change the utility demand around production, not reduce production itself.

That is a much stronger water-efficiency outcome than simply using less water because a machine was curtailed.

The distinction is critical as pulp and paper companies report sustainability progress.

A mill making 20% fewer tonnes will probably use less total water.

That does not mean the process became 20% more efficient.

A successful conservation project should allow the mill to make the same product with less freshwater demand.

That is the improvement worth measuring.

What Should Other Mills Audit?

Domtar’s programme provides a practical template for mills that have not yet developed a formal water-reduction portfolio.

Do not begin with the total intake meter.

Walk the water system.

Separate freshwater users into categories:

process water;

paper-machine showers;

seal water;

cooling;

vacuum systems;

stock dilution;

washing;

and utility applications.

Then ask three questions at every major use point:

Does this application actually require freshwater quality?

Does this water need to be discharged after one use?

Is the current flow controlled to the amount the equipment really requires?

Those three questions can identify opportunities before a mill even considers more complicated treatment technology.

Measure Water, Energy and Production Together

The next step is to avoid managing water as an isolated sustainability KPI.

For each project, track:

freshwater withdrawal;

effluent volume;

electricity;

steam or heat;

chemical use;

maintenance;

and production stability.

A cooling-loop project may reduce water but increase fan electricity.

A hotter reused-water stream may reduce heating requirements elsewhere.

Lower freshwater intake may reduce wastewater treatment demand.

Changes to white-water closure may affect paper-machine chemistry.

Only by measuring those interactions can a mill determine whether it has improved the whole process rather than one environmental indicator.

The Next 10% May Be Harder Than the First

Domtar says Paper & Packaging has reached a 10% reduction relative to its current 2020 baseline, against a 20% target for 2030.

Being halfway to the target does not necessarily mean the remaining half will require the same effort.

Early projects often capture relatively obvious opportunities:

open valves;

single-pass cooling;

excess seal water;

easy reuse streams.

As those are removed, later reductions can require:

larger piping changes;

additional treatment;

process redesign;

more sophisticated water segregation;

or tighter integration between different mill systems.

The marginal cost of each additional gallon can therefore rise.

That makes the continuation of the dedicated capex fund important.

The easy projects establish momentum.

The harder projects determine whether the target is actually reached.

Before Buying New Water Technology, Trace the Water You Already Have

For mill managers and process engineers, the most useful lesson from Domtar’s 24 projects may be surprisingly simple.

Before installing another treatment system, follow the water already moving through the mill.

Where does freshwater enter?

What quality does each user actually require?

Where does relatively clean water leave one process and immediately become wastewater?

Which cooling loop operates once-through?

Which pumps continuously consume seal water?

Which valves are controlling flow manually?

And which streams could be reused with little or no additional treatment?

Then put an annual volume beside every opportunity.

A flow of only 10 gallons per minute becomes more than 5.2 million gallons per year if it runs continuously.

Repeat that across dozens of pieces of equipment and a mill can find significant volumes without changing its production rate.

That appears to be the real value of Domtar’s approach.

The company did not ask headquarters to invent one billion-gallon technology.

It created a capital mechanism that allowed mill employees to identify hundreds of small places where water could work harder.

Twenty-four completed projects now add up to more than 2.3 billion gallons of annual company-reported reduction.

And Plymouth shows why that matters beyond sustainability reporting.

When drought pushed salt water to within a quarter mile of the mill’s intake, freshwater efficiency became a question of operating resilience, not simply environmental performance.

For other pulp and paper producers, the useful question is therefore not:

“How much water do we return to the river?”

It is:

“How much water did we need to withdraw in the first place?”

Reducing that first number can lower the amount that has to be pumped, treated, heated, cooled and managed throughout the entire mill.

That is where water conservation starts to become process engineering.

Last Updated on 08/09/2026 by Jota Machinery