NOVEMBER 2011

Paper recyclers face challengesClick to Enlarge
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In the mid 1960s, IBM advertising touted that the “Office of the Future” would become “paperless” with the advent of the computer age. At first, the opposite happened. Dot matrix printers spewed out more paper than anyone ever predicted to ensure hardcopy backup and provide office workers with tangible working documents. Concurrently, office copiers began gobbling up paper at an unprecedented rate.

Since then, it’s all changed as society has become comfortable with digital information. Every day there is greater transition from paper to electronic information in every sphere of personal and commercial life. While we will never become paperless, we are certainly on a course to becoming less paper dependent, at least in the area of communications.

The United States Postal Service is a good barometer of the decline of paper. The amount processed each year is down by more than 20 percent in volume since its peak in 2006. Hardest hit have been first class mailings – bills, letters and promotional offers, mostly replaced by email, on-line banking and couponing. Daily newspapers continue to decline as they lose readers to online periodicals and televisions’ local news reports.


The Association of American Publishers recently stated that e-book sales continue “powerfully strong growth.” Industry experts now estimate that e-books represent more than 10 percent of all book publishing revenues.

Further diminishing paper use, we are in the midst of a mobile computing revolution as wireless networks upgrade to 4G-LTE (Long Term Evolution), which will transmit and store vast quantities data. Voice command inventory systems directing workers through tasks previously communicated on paper is but one example of business moving away from paper. Massive data is being stored in cloud computing rather than on paper.

Higher Global Demand

Yet with this great migration from paper to digital in the realm of communications, recycled paper fiber is in higher demand than ever before for writing, printing, packaging and industrial applications and commanding commensurately high prices.

“I think the paper recycling industry is a strong growth industry because of world demand. Prices are going to fluctuate. Right now they are very high, but are coming down a little. I believe they will remain high for the next couple of years,” predicted Johnny Gold, senior vice president of the Newark Recycled Fibers division of the Newark Group.

The Newark Group, founded in 1912, is an integrated global producer of 100 percent recycled paperboard and paperboard products with significant manufacturing and marketing operations in North America and Europe.

“Collections have been off for some time for two reasons,” said Gold. “One is due to poor economic conditions in this country. Business has been slower. It picked up a little after schools went back into session. The other reason is the fact we are getting more and more paperless no matter where you look. Everything is going electronic as the world moves forward. If the economics of this country get any better, and hopefully they will, supply could get very tight very quickly.

“If it were not for world demand, everything would be in line with each other, but developing nations need newsprint and more fiber for all applications. That demand for fiber has increased heavily compared to what it was 5 or 10 years ago.”

Data for 2010 indicates that 31 percent of the paper and paperboard recovered in the United States went to produce containerboard and 12 percent went to produce boxboard, which includes folding boxes and gypsum wallboard facings. Exports of recovered paper to China and other nations absorbed nearly 40 percent of the paper collected for recycling in the United States in 2010.

While world demand is up significantly, the amount of paper consumed in the United States has declined according to the American Forest & Paper Association (AF&PA). During the past 20 years, 1999 had a record high production of 105,316 million tons with 44.5 percent, or 46,818 million tons recovered for recycling. By 2010, the supply dropped to 81,209 million tons, but with a much higher, 63.5 percent recovery rate, or 51,545 million tons recovered. In other words, a net increase of 4,727 million tons more recovered in 2010 than in 1999.

The Wellesley Model

Even though curbside pickup of paper is convenient for residents, it results in additional taxes or sticker fees to cover the cost of collection and windblown paper is sometimes messy on collection day.

If the overall objective is to increase the recovery of paper and maximize its recycled value, Wellesley, Massachusetts presents a good case. It has avoided collection costs by instituting a highly effective drop off program for both trash and recyclables that exceeds average recovery rates and produces substantial income through the sale of paper, metal, plastics and other recyclables.

Wellesley has been progressive in more than recycling. In 1914, it was the first town in America to adopt zoning laws. By the 1920s it was recognized as one of the leading suburbs of Boston. Today it is an affluent community of 27,000 with a distinguished recycling record due to its “Step-Up” program of community outreach and education that could well serve as a model for materials reduction, reuse and recycling for the rest of the nation.

“We have about 10,000 vehicles a week that drive through our recycling facility. We are a very unique municipal operation in the sense that we utilize profit-making strategies in an attempt to maximize our revenue. I like to think of what we do as squeezing out every penny in terms of saving and making money,” said Gordon Martin, superintendent of Wellesley’s recycling and disposal facility. “We don’t offer municipal curbside so residents have two choices. They can either bring their trash and recyclables here – 85 percent choose to do that, or 15 percent hire private haulers that pick up at their home or business and bring it here.

“I just finished our fiscal 2011 annual report and we managed to put back into general funds $866,000. We routinely turn back an average of three-quarter of a million dollars each year. We are probably the only town in America where we have a budget to buy recyclable material from other communities as well as from public sector businesses. We try to be the best option for communities around us. We buy their recyclables and process it. More often than not we export, but also sell domestically. Either way we make money!

“We try to teach our residents to recycle as much as they can and make our facility very user friendly to drive through. After they drop off their recyclables, residents go into the area where they dump their trash. Even there we have newspaper and cardboard drop off, right next to the trash compactor as a last chance to collect paper. I think we are capturing the majority of it. Last year we collected 3,569 tons of newspaper and cardboard for $457,241 in sales. It’s the highest volume in our recycling stream and also has the most value.

Wellesley issues free permits to residents to keep non-residents from illegally dumping at the facility. “We are surrounded by communities that have pay-as-you-throw, or permits that cost big money, upwards of $150 dollars. We don’t want out-of-town people trying to sneak their trash in here. I think what we do here is very unique. I don’t think you’ll find too many communities that have invested in a recycling program as we have. Our numbers indicate that the investment was well worth it,” Martin added.

Recycled paper or solid waste?

There is another challenge of vital concern to the paper recycling industry –an issue that is now being considered by the Senate in the form of Senate Resolution-251. It “expresses support for policies in the United States that promote recycling of materials, including paper, which is commonly recycled rather than thermally combusted or sent to a landfill.” SR-251 also, “expresses support for policies in the United States that recognize and promote recyclable materials as essential economic commodities, rather than wastes.”

The definition of “biomass” is another challenge for the paper recycling industry that could cause great harm. According to the Congressional Research Service, biomass is defined as: “…organic matter that can be converted into energy.” Common examples of biomass fuels include food crops, crops for energy such as switchgrass, wood waste and animal manure.

Over the past few years, however, biomass has expanded to include algae, construction debris, yard and food waste, and municipal solid waste (MSW). Each year, 243 million tons of waste is generated by Americans and 82 million tons, or 33.8 percent is recycled. Paper represents the lion’s share of MSW, at a whopping 28.2 percent.

MSW is increasingly being incinerated at waste-to-energy plants. Of the 243 million tons generated each year by Americans, 29 million tons or 12 percent was combusted for energy recovery.

“An issue we work on day in and day out is making sure the government doesn’t do anything to subsidize the ultimate destruction of our paper such as in municipal waste-to-energy facilities, or in landfills” says Terese Colling, a Washington DC representative of the Paper Recycling Coalition (PRC). “We don’t want the government providing subsidies to do so. We don’t want our government competing against us.” We provide tens of thousands of good paying jobs at mills across the United States and we can compete in an unmanipulated market for our fiber needs.

PRC is an association of 100 percent recycled containerboard and paperboard manufacturers responsible for processing over six million tons of recovered fiber per year. Since 1990, it has been educating policy leaders, regulators, and others about the 100 percent recycled paper industry and the need for access to the recovered fiber supply to maintain tens of thousands of jobs at mills across the United States. “The mission of the PRC is to protect the fiber supply. The PRC supports fair and unmanipulated markets in determining where and how fiber should flow. And, the PRC strongly opposes any subsidies for others to use recovered fiber as a feedstock,” Colling added.

Under the EPA’s CHP (Combined Heat & Power) Partnership there are seemingly endless state and federal incentives applicable to biomass and biogas projects, including a slew of financial incentives and favorable regulatory treatment. The sheer size of these programs are staggering. On the EPA website, over 180 separate state and national programs are listed. It’s so complex that the CHP Partnership updates the information twice a month on financial incentives, such as grants, tax incentives, low-interest loans, favorable partial load rates and tradable allowances, all of which help CHP project developers attract additional private investment for their CHP or biomass project.

CHP or biomass project development can also be expedited with regulatory treatment that removes unintended barriers such as standard interconnection requirements, net metering, and output-based regulations.

With stringent emissons control, many people see MSW going to energy plants as a positive development, both to power steam generators to produce electricity and to conserve landfill capacity. But anyone involved in paper recycling, or sustainability should have concerns over paper contained in MSW going up in smoke, rather than being recovered, especially when the practice is supported and incentivized by federal and state dollars.