Victims of irrational legislation
My first full calendar year as President of the BIR Paper Division included two major features that would have been familiar to most of my predecessors, namely volatile market conditions and legislative uncertainty.
Starting with the latter, 2022 began with new recovered fibre import regulations in Malaysia, including pre- inspection in the country of origin. On top of this, and pervading the whole of 2022, were fears over the future for European exports of recovered fibre, particularly to non-OECD countries, as a result of the proposed revision of the EU Waste Shipment Regulation.
For many years, Europe has shipped a significant proportion of its surplus tonnages to customers in developing economies, mainly in Asia. This has been a truly symbiotic relationship as the importing countries have received good-quality recovered fibre to help fuel their industrial development at a time when their own domestic collections are not yet sufficiently mature to meet their raw material needs.
As explained by our Division’s General Delegate, Manuel Dominguez, at our meeting in Barcelona last May, the proposed shipment regulation revision threatens to introduce stricter procedures and control measures on EU recovered fibre exports in a way that would create a captive market within Europe, leading inevitably to lower prices and putting the sector’s future in jeopardy.
If viable exports are to be made significantly more difficult or even impossible, then who is the beneficiary?
Certainly not the planet which we are all supposedly trying to protect. The whole legislative approach appears unreasonable and irrational.
Let me underline here, some of the countries that would be affected by this regulatory tightening are Europe’s biggest customers for recovered fibre, such as India, Indonesia and Vietnam. Guest speaker Nishant Sahney of Gaurav Vipa Papers Pvt Ltd told our Dubai meeting last October that India alone imported 7 million tonnes from around the world in 2021 – roughtly equivalent to Europe’s entire recovered fibre surplus.
Europe is not alone in making life more difficult for our eminently “green” industry. India’s review of limits on non-paper materials in recovered paper imports will bring further controls in countries of origin and an increase in bureaucracy. And as explained in Dubai by guest speaker Atul Kaul of Waraq in Saudi Arabia, his own government’s policy was restricting exports of recovered paper, with both exports and imports having to work through a licensing agency.
These bureaucratic strictures are being applied even though free and fair trade remains crucial to the well- being of our essential industry. Latest data confirm for the umpteenth time that we continue to perform a huge service to the global environment.
As mentioned above, this threat to exports was combined with volatile pricing, particularly for OCC, to make 2022 a turbulent time for our industry. Demand for recovered paper was excellent in the early months of the year owing to healthy paper mill order books. However, the onset of far higher energy costs and an inflation- related slide in demand for finished products forced mills to significantly reduce their capacity utilization rates and, in some cases, take unprecedented levels of downtime. As I pointed out at our meeting last October, OCC prices had fallen by as much as 90% in preceding months.
To be fair, white grade and pulp substitute prices retreated only slightly from the high ground established many months earlier, thanks largely to elevated prices for virgin pulp. And a positive development for us as 2022 progressed was the improved availability and cost of both vessel space and containers.
Given these developments, it was perhaps prescient that a guest presentation at our Barcelona meeting focused on introducing some welcome predictability into the trading arena via cash-settled financial futures. Stein Ole Larsen of Norexeco ASA argued that hedging would help protect us from understandable nervousness at our exposure to volatile pricing.
His words remind us once again that we cannot avoid certain threats and challenges to our day-to- day business but we can certainly help ourselves by remaining alert to new ideas and new ways of operating. We can also look to “control the controllables” by running a tight ship and by finding the right customer fit.
“If viable exports are to be made significantly more difficult or even impossible, then who is the beneficiary? Certainly not the planet which we are all supposedly trying to protect.”
Made from vegetable fibres called cellulose, paper as we know it today was first created in China more than 2000 years ago. Since the advent of the printing press in the 15th century, its use has spread across all continents to the extent that, currently, it is hard to imagine the world without this versatile material. Around 420 million tonnes of paper and cardboard are produced worldwide every year, with well over half of the raw material coming from recovered sources.
Some 50-60% of recovered paper comes from industry and business. This includes paper trimmings, cuttings and shavings from manufacturers and converters, as well as goods discarded before they reach the consumer, such as unsold newspapers and magazines. The remaining recovered fibre comes from households.
THE NEED FOR FREE TRADE
Recovered fibre collections in, notably, North America and Europe easily exceed local consumption needs and so overseas trade has become a major component of this market. But despite the environmental, social and economic advantages of the worldwide trade in recovered paper, flows have been disrupted over recent years. China established itself as the leading importer of recovered fibre, buying around 30 million tonnes per annum from overseas suppliers at one stage. However, the Chinese government has recently imposed more stringent import rules, with the result that overseas purchases are believed to have declined below 10 million tonnes in 2019 and are expected to drop still further.
Similarly restrictive import measures have also been introduced by other countries in Asia which had been leading buyers of surplus material from Europe, thus impacting the global market and creating widespread concern over the diminishing outlets for the world’s excess volumes because of a move away from the free trade principles supported by BIR.
According to industry estimates, paper can be recycled anywhere from 3 to 8 times. Each time recycling occurs, the fibres become shorter and weaker, and virgin pulp must be introduced into paper production to maintain the strength and quality of the fibre. Through this process, recovered paper and forest-based products complement each other ecologically and economically.
The recycling of paper follows a series of steps which may vary depending on the type of paper and its degree of deterioration.
Sorting: Paper products must be separated according to their composition and degree of deterioration. Different types of paper can sometimes be mixed. Others, such as paperboard, are recycled using a single-grade process, meaning that no other type of paper can be mixed in during its processing.
Baling: Large quantities of paper are packed using hydraulic machines which apply enormous pressure to compact recovered paper into blocks that are easier and more cost-effective to transport.
Shredding: Recovered fibre is shredded into smaller pieces and mixed with water to make pulp.
Washing: The pulp is washed, refined and cleaned, then turned into a slush that undergoes filtering through screens and other separation processes to remove contaminants such as ink, clay, dirt, plastic and metals. Dyes, coatings and other additives can be introduced during this process. Water is continuously drained and cleaned for reuse.
Bleaching: In order to whiten paper, the pulp can be bleached using hydrogen peroxide and chlorine.
Pressing: The resulting paper sheet, known as “web”, is pressed between massive rollers to extract as much of the remaining water as possible and to ensure uniform smoothness and thickness. The semi-dry web is then run through heated dryer rollers to remove any remaining water.
Rolling: The finished paper is processed into large rolls ready to be manufactured again into new consumer products.
In some instances, ink is not removed from the recovered paper but instead is dispersed into the pulp, giving the recycled paper a greyish tint. If the ink is to be removed, there are two different methods which can be used:
Washing: As the paper is pulped, chemicals can be added to separate the ink from the paper and allow it to be washed away with large amounts of water.
Flotation: Air can be passed through the pulp, producing foam that absorbs at least half of the ink, which can then be skimmed off.
- Recycling a single tonne of paper saves 4100 kWh of energy, 1720 litres of oil, approaching 32,000 litres of water and an average of 17 trees, while preventing the emission of 27 kg of air pollutants.
- Burning that same tonne of paper would generate about 750 kg of carbon dioxide.
- Recycling cardboard requires only 75% of the energy required to make new cardboard.
- The European Paper Recycling Council reports an increase in the continent’s paper recycling rate from 69% in 2010 to 72.4% by 2017. The aim is to achieve 74% by 2020.
- According to the American Forest & Paper Association, the overall US paper recovery rate registered an all-time high of 68.1% in 2018.
TEN QUESTIONS ABOUT PAPER RECOVERY AND RECYCLING
Recovered paper is a valuable raw material that can be reused to create new paper and board products. Paper recovery is preferable to landfill or incineration for energy recovery.
Almost any household paper can be recycled, including used newspapers, cardboard, packaging, stationery, “direct mail”, magazines, catalogues, greetings cards and wrapping paper. It is important that these papers are kept separate from other household waste, as contaminated papers are not acceptable for recycling.
Some paper products are not collectable and/or recyclable. The share of such paper products - which comprise, for example, cigarette papers, wallpaper, tissue papers and archives - is estimated at 15-20% of total paper consumption. Furthermore, it might not be economically or environmentally sound to collect and recycle all fibres that are theoretically available because of heavy transportation costs.
Depending somewhat on the paper grade, it can be recycled 3 to 8 times.
Basically all paper grades can be produced based entirely on recovered paper. However, paper cannot be recycled endlessly and so the system requires a constant injection of virgin fibres.
Yes it is, and this is done on a broad basis. Obviously, most paper products can be produced using only recovered or virgin fibres, but it is also possible to use both at the same time.
The method of collecting recovered paper depends on its source. From large industrial and commercial sources, the volumes are so high that they have dedicated collection equipment. For households, recyclable materials such as paper and board packaging, plastics packaging, etc. are collected together; in other cases, single-stream collections are undertaken.
The most important contribution is to ensure used paper is made available for collection via whatever local system is in place, keeping it separate from contamination such as food waste which could render it unsuitable for recycling.
Paper recycling contributes to sustainable development as natural resources are used in an efficient way. Consigning paper to landfills would be an utter waste of a valuable resource. Recycling of fibres allows for a more responsible way of managing soil and forests as trees can store more carbon dioxide for longer. It has been calculated that the recycling of a single tonne of paper saves 17 trees on average.
The biggest source of recovered paper is formed by industry and businesses (50-60%). This also covers converting losses (cuttings, shavings) and returns of unsold newspapers and magazines. The remaining recovered paper comes from households.