For some time, we had known that 2020 was going to be a watershed year for the recovered paper industry across the globe. China had served notice several years earlier that, on the final day of last year, it would halt imports of all materials falling into the category of “solid waste”.
In its heyday as an importer of recovered fibre, China had bought in upwards of 30 million tonnes per year from a host of countries dotted throughout the world. In 2020, recovered paper import quotas approved by the Chinese authorities had dwindled to just 6.7 million tonnes. Although supplier nations had received several years’ warning of the import changes to be made by China, last year was to provide the exclamation mark to this market-altering shift in policy.
As 2020 finally dawned, however, few if any of us could have imagined that we were about to take our seats on one of the wildest roller-coaster rides in the industry’s history. Mainly as a result of the combination of China’s approaching import ban and the COVID-19 pandemic, the markets entered a state of almost constant churn: demand and prices headed sharply higher and then steeply lower throughout most of the year. The level of unpredictability was so exaggerated in 2020 that even the most experienced of industry professionals have been left struggling to predict what 2021 might hold.
Last year began with a continuation of the recovered paper market trends seen in late 2019: difficulties in finding adequate markets for all the material available to sell, resulting in heavy pressure on prices. But then COVID muscled its way into the spotlight: as severe lockdowns were imposed around the world, offices and industries shut their doors and economies stalled. Collection rates went into decline for a number of grades, notably deinking for which recovery rates remained low until the second half of 2020. For the lower grades, conversely, the year brought a surge in supply as pandemic-related restrictions forced the closure of many non-essential retail outlets and prompted a sharp swing to shopping online – the so-called “Amazon Effect”.
On the demand side, it was a case of either feast or famine. From relatively low demand in the first quarter of 2020, mill orders for recovered paper surged to record highs in the tumultuous early weeks of the pandemic’s global spread; by the end of the second quarter, however, demand plumbed the depths once again as our mill customers had built up substantial stocks. The year ended with one more twist as demand once again gathered a strong momentum, reducing mills’ stocks to almost zero as 2020 drew to a close.
As mentioned above, Europe, North America and several other parts of the world had been able to rely for many years on China as an outlet for much of their recovered paper surpluses. With the knowledge that this option was to be removed, exporting nations have spent the last two or three years seeking alternative outlets for this excess material which, in the case of Europe, amounts to more than 8 million tonnes a year.
During the BIR Paper Division webinar in October 2020, a panel of experts considered not only the great strides already made towards offsetting the loss of recovered paper orders from China, but also the need for further developments to account for the remaining surplus. Indeed, it is encouraging that, in Europe’s mill sector alone, an additional 2 million tonnes of new capacity is scheduled to come on stream in 2021.
Also welcome is the widespread research activity aimed at developing new markets for paper. In this context, Gilles Lénon and Fabienne Vercelli from the Centre Technique du Papier in France gave details at our October 2020 webinar of two emerging barrier technologies – chromatogeny and MFC wet lamination – which have the potential to extend paper and board usage within the gigantic and ever-growing packaging sector.
In 2021, demand for recovered fibre appears certain to remain high as new applications and capacities continue to be developed. It is equally certain, however, that 2021 will see us all taking another turn on the roller-coaster.
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.
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.