Europe
Approaching the midpoint of 2025, the European recovered paper market finds itself at a critical juncture. The industry is grappling with a confluence of factors: persistent market volatility; evolving export dynamics; and an increasingly complex regulatory environment.
The market in Europe has experienced wild price swings in the early part of the year. After a period of decline in late 2024, prices for OCC and mixed paper began to recover in January and February, driven by supply shortages and increased demand from mills. Contract and spot prices, which had suffered significantly, started to show signs of recovery and to indicate a market correction.
However, this recovery has been tempered by ongoing challenges. High energy costs - particularly in Germany, France and the Benelux region - have put mill operations under pressure, leading to extended shutdowns and reduced production capacity. Additionally, the lack of a harmonised “end-of-waste” status for recovered paper across the EU is creating uncertainty, hindering trade fluidity and transparency as far as compliance is concerned.
Europe’s recovered paper exports have faced headwinds owing to changing global demand and regulatory developments. Traditional export markets in Asia - such as India, Indonesia and Vietnam - have offered subdued demand, partly owing to disrupted logistics and increased competition from other regions. The new EU Waste Shipment Regulation will further restrict exports to non-OECD countries, compelling the industry to seek alternative markets and to adapt to new compliance requirements.
The UK reported a slight drop of around 2.5% in recovered paper exports in 2024, while Germany and the Netherlands experienced declines of over 12% and 9%, respectively. These shifts underscore the need for European exporters to diversify their markets and enhance domestic recycling capacities.
The European recovered paper sector has witnessed significant consolidation in recent months. In January this year, International Paper received conditional EU approval for its US$ 7.16 billion acquisition of UK-based DS Smith, contingent upon the divestment of five plants in France, Portugal and Spain in order to address competition concerns. This move is aimed at strengthening International Paper’s presence in the European packaging market.
Meanwhile, Mondi has completed a Euro 634 million deal to acquire the Western European assets of Schumacher Packaging, including facilities in Germany, the UK and the Netherlands. This acquisition enhances Mondi’s operations in the region and aligns with its strategy to balance recycled and virgin paper operations.
These strategic moves reflect a broader trend towards companies seeking to optimise assets and expand their market presence amid industry consolidation.
Increasing demand for sustainable packaging, among other factors, is expected to fuel regular growth in the European recovered paper market over the next few years. To navigate the evolving landscape, industry stakeholders are expected to follow one or more of the following paths: exploring new markets and diversifying product offerings to mitigate risks associated with regulatory changes and market volatility; adopting advanced recycling technologies and automation to enhance efficiency and product quality; and/or aligning operations with environmental regulations and sustainability goals to improve competitiveness and meet consumer expectations.
By proactively addressing these areas, companies can position themselves to achieve resilience and growth in Europe’s dynamic recovered paper market. How bold European mills are going to be and how willing they are to undergo the structural changes which are necessary to stay ahead of the curve, only time will tell.
