What do paper buyers really want?

By Kenneth Norris, Contributing Editor, Pulp & Paper International

ASHEVILLE, NC, Aug. 8, 2011 (RISI) - Paper recovery rates and escalating demand for recycled content are helping the pulp and paper industry improve its environmental footprint. Paper producers, though, may need to wait before taking the credit for these developments. Instead, it appears corporate buyers and consumers are the main drivers for propelling these changes and others in the industry, according to the recent progress report on the industry by Environmental Paper Network.

"The leadership is coming from the purchasers of paper, the large consumers, merchants and retailers," says Joshua Martin, director of Environmental Paper Network (EPN). "Change is coming from the commitments, engagement and actions of the customers of the paper industry."

EPN's report, The State of the Paper Industry 2011: Steps Toward an Environmental Vision, indicates that reducing energy, improving efficiency and continuing to increase the use of recovered fiber may hold the most promise for further gains. These areas have shown mixed results in the last few years, but the report concludes that the industry stands to gain the most by focusing heavily on these issues.

"Green consumerism and corporate responsibility requirements are driving the direction where paper purchasers are heading," says Martin. "It's a signal that innovation and marketplace awareness are going to be keys to competitiveness for the paper industry."

"The report shows increasingly strong demand for environmentally responsible paper, including recycled content printing and writing paper," says Susan Kinsella, executive director of Conservatree. "There's opportunity out there for paper companies that supply these papers at cost-competitive prices."

Energy consumption

Rising global demand for fiber and energy costs are two of the most pressing concerns for the industry over the next decade. In response, consumption of natural gas, coal and purchased electricity by the industry all fell as a percentage of energy used from 2002 to 2008, as reported by the industry. However, EPN warns this data does not accurately reflect that the total energy used per ton of product remained unchanged at approximately 24.5 million British Thermal Units (BTUs) per ton.

To make up for the lower consumption of traditional sources, the industry is relying more on black liquor, which is often excluded from measurements of greenhouse gases based on assumptions that this energy source is carbon-neutral. This may skew the results of other data that indicates the industry is improving, according to EPN, including showing lower greenhouse gas emissions than may be occurring. In turn, this creates a hole in the carbon accounting for virgin fiber paper manufacturing, says EPN, and the industry may be slower to innovate or invest in the proven benefits of recycling.

Improving the use of recovered paper could be key for the North American paper industry to maintain its competitiveness in the face of increasing global demand for recycled fiber.

Improving the use of recycled fiber is one area that could directly lower energy consumption across the board, the report concludes. Manufacturing paper with recycled fiber, as opposed to virgin fiber, uses significantly less energy per ton and upgrading mills enhanced chlorine-free bleaching technologies could greatly improve energy efficiency at existing mills, according to the report.

For Martin, it becomes a question of innovation and ultimately competitiveness. "We have not made enough investment and enough progress in innovations for recycled content and cleaner technologies," says Martin, "which is resulting in reduced competitiveness for the North American industry and the loss of opportunity for environmental benefits domestically."

Fiber baskets

Recycling collection rates are at record highs for the US and Canada, implying that recycling efforts still carry heavy weight with the public. Landfill deposits of paper have also declined 38% since 2005, approximately 16 million tons, according to the report. However, exports of recovered fiber have risen. A third of all fiber recovered in the US is now exported to Asia. Total pulp produced in the US from recovered paper has remained stagnant, at approximately 36-37% of total pulp production in the last ten years.

Without a continued focus on improving recycling collection rates, especially for categories such as office paper and using recycled fiber in paper production, EPN reports that market dynamics could stress the supply of recovered fiber in North America. Reduced consumption may help ease some of this demand, but may only go so far.

"Consumption patterns around the world are changing, the markets are changing, the fiber baskets that supply the industry are changing," says Martin. "The North American industry needs to come up with some solid green credentials that involve innovating with agricultural residues and high performance recycled papers to gain more space in the marketplace."

In the last decade, production of deinked high-grade pulp has increased from 73% of capacity to better than 90%. However, actual overall recycled content used in printing and writing paper has hovered near 6-8%. When demand for recycled content was weaker, deinking pulp mills were running at lower capacity. Now as demand for recycled paper is increasing, mills are running near capacity. Without new capacity for deinked pulp, the industry will struggle to keep up with demand, both for more recycled printing and writing paper options, as well as for papers with higher recycled content.

"Answering the demand for recycled fiber, particularly for printing and writing paper, is a chance for the industry to revitalize this segment of the market, creating jobs and revenue in North America," says Kinsella.

Paper buyers are driving demand for more environmentally sustainable paper, helped in part by organizations who are working with buyers to improve their procurement policies.

To call attention to the environmental effects of using recovered fiber, the report highlights that using 100% recycled copy paper, compared to copy paper made from virgin tree fiber, "on average, reduces net energy consumption by 31.3%, reduces net greenhouse gas emissions by 43.6%, reduces wastewater by 53.3%, reduces solid waste by 39.1% and reduces wood use by 100%."

Demanding certification

Answering customer demands might be the watchword for the industry moving forward. Pointing out that the market has been the advocate for change, the report said the growth of land certified by the Forest Stewardship Council (FSC) was the biggest indicator of progress by the industry, 66 million acres (26.7 million hectares) in the last four years. This expansion, explains Martin, is in response the marketplace asking for specific forest certification efforts.

"The marketplace is demanding a forest certification that consumers trust and that they can be confident leads to results in the forest," says Martin. "FSC is the only certification with credibility in the conservation community and large purchasers recognize that and are asking for it. This is driving the need for suppliers to find additional sources of FSC-certified fiber."

Organizations within EPN's network are using this signal to increase partnerships and programs to help more landowners achieve FSC certification in order to meet goals of their own corporate social responsibility policies. Carbon Canopy, which includes Staples, Domtar, Dogwood Alliance and others, is an example of how these partnerships are working to get more land certified under FSC and supporting it as a greater portion of the fiber supply.

"The demand for environmentally sustainable paper is on the rise in North America because of the work Canopy and other EPN members are doing to help paper buyers create environmental procurement policies," says Neva Murtha, Canopy Campaigner and architect of the Ecopaper Database.

Overall, Martin emphasizes, the purpose of the report is a starting point for discussions on how all stakeholders can improve their environmental performance. Acknowledging that there will be multiple viewpoints on how the data is perceived, Martin hopes that this is more of a beginning for the conversation than a final statement.

"We can start with a common assumption that everyone wants a cleaner environment," says Martin. "We all have different views on how to get there, but we hope this data will inform our efforts to get to that common goal."

Pulp & Paper International is FREE to qualified subscribers. Click here to find out more.