Beginning early in 2011, Catalyst Paper's Crofton mill will be the site of a $6.12-million pilot project to convert waste sludge into biofuel -- something the company, developers of the technology and all levels of government are hoping turns into a beneficial operation for the entire industry.

"This gives us the capability to improve energy efficiency and lower the environmental footprint for us and all pulp and paper mills," said Bob Lindstrom, Catalyst vice-president, Supply Chain and Information Technology.

Lindstrom welcomed Stockwell Day, the president of the Canadian government Treasury Board, Minister for Asia Pacific Gateway, and Minister responsible for British Columbia to the mill last Friday. Day announced a $2.5-million investment in the project by the federal government. Other financial contributors are the B.C. Ministry of Forests, Mines and Lands ($1 million), the B.C. Bioenergy Network ($1.5 million) and Catalyst ($1.12 million). Elemental Energy, Paradigm Environmental Technologies and the University of British Columbia are chipping in with in-kind work.

The federal contribution comes as part of Canada's Economic Action Plan, and Day was pleased to be helping out not only the overall economy but also a struggling industry.

"I don't have to tell you folks what the forest industry has been going through," he said to the audience, made up primarily of Catalyst workers. "It has taken smart, tough thinking and dedicated people like yourselves to navigate through these waters."

The Crofton mill produces approximately 20 tons a day of waste activated sludge. It is currently compressed and burned as a fuel source in Catalyst's boilers. The new MicroSludge project destroys the bacterial cell membranes and releases the cell contents of the sludge, after which an anaerobic digester converts it to biogas.

Although the pilot project will impact only one per cent of the sludge currently produced, a full-scale program would cut the amount of waste in half.

"This is a fantastic project," said Day. "It's very innovative. I give full points to the company and organization for stepping up. This is a win-win-win all the way around."

Representing the provincial government was Ron Cantelon, the Liberal MLA for Parksville-Qualicum. He spoke of the "absolutely critical" importance to the provincial economy of retaining operations like Catalyst and keeping them viable.

"We've got to have them here," he said. "Otherwise, we end up exporting raw logs."

North Cowichan Mayor Tom Walker was one of several local politicians on hand for the announcement, and he welcomed it with open arms.

"I want to see the mill stay here long-term, protecting jobs," he said. "Any investment that helps the mill stay here is good."

Walker was also excited about the ecological aspect of the project.

"It's an improvement on the environmental impact, and that has its appeal to me," he said.

The mayor was pleased to see something with a potentially worldwide impact taking place in the municipality.

"It's kind of nice to have a pilot project like this in North Cowichan," he said. "It's a sexy thing, and it won't be just important to Canada, but to the world. It's a good thing to put North Cowichan on the map."