BRUSSELS, June 13, 2011 (RISI) -There are some changing metrics in the recycling sector. One of the things being questioned is the environmental benefit of collecting paper in the US and then shipping it offshore, most notably China. Besides the environment, it also relates to the economy and American jobs.
The BlueGreen Alliance, a consortium of three environmental NGOs and 11 labor unions including the United Steelworkers (USW) union, is among those expressing concerns about spending US taxpayers' money to collect paper without the US reaping the environmental or production benefits because the paper is increasingly sent abroad. Rising exports of waste paper has contributed to regional shortages and price pressure, which has helped put low-end US recycled mills out of business.
Jon Geenen, a USW vice president representing the paper sector through more than 800 contracts and about 150,000 workers, says the concerns the USW has with the current system of recycling waste paper are twofold.
First, he says there is something "fundamentally wrong" with a system that makes it cheaper to ship recovered paper from Portland, OR, to Asia than it is to put it in a truck and ship it to Seattle, WA, both cities located about 170 miles (275 km) apart on the US West Coast. Geenan says that 61% of the paper recovered in the US in April was exported. This he says has led to Asia driving up the price for recovered fiber, making it difficult for the US to compete thereby leading to job loss. The situation does not help industry or the environment and does not drive the economy forward.
Second, Geenan says that if one looks at the foundation of the economy, and this can probably be said about most countries, it is the ability to make things. If there is not more focus put on the competitiveness of the manufacturing sector, there will be a "long-term hangover for the economy."
The USW is now in a fact finding phase, exploring possible action. This could include a "trade remedy" he says, harking back to the cost of transport he cited earlier. Also, the USW is looking at potential "legal remedies" concerning the recovered paper trade. "More US factories will be shut if we don't do something."
Similar questions are being asked in Europe about waste paper exports, and the EU is looking at the issue. (See March RISI article "Record OCC run to China showing no sign of halting.")
Steve Silver, president and CEO of recycled paper producer FutureMark Paper in Alsip, IL, believes waste paper export practices "won't change in the short-term, but it is an issue worth looking at."
For the last 10-20 years, the focus has been on increasing paper recovery. Now, in the US, paper recovery rates are up to about 64%, an all-time high and approaching the practical maximum (as tissue cannot be recycled). Environmental groups are now changing their focus from collection to the most beneficial use. And, Silver states, "The most beneficial use is not collecting it, shipping it to China and then having it shipped back as containerboard."
The basic question, Silver says, is why do people recycle? "To help the environment, and if they do recycle, they assume the benefits will accrue to them locally. We see a stronger push among environmental NGOs and community groups to make that happen. The resource conservation benefits of recycling should be enjoyed by the folks who are paying for curbside collection."
Conserving resources and creating jobs through recycled paper manufacturing in North America is among the goals of the Environmental Paper Network (EPN), a coalition of 67 NGOs. The EPN recently started the RePaper Project to boost waste paper recovery and recycling. By working with the AF&PA, the US EPA and other groups to develop recycling programs, the RePaper Project aims to raise the North American paper recovery rate to 75% by 2015.
Pam Blackledge, EPN's lead for the RePaper Project, believes recovering more higher-quality waste paper in North America will increase recycled content in paper manufacturing. "The goal is to expand and improve paper collection systems, which will help keep more waste paper for domestic recycling, ideally through regional or local closed loop systems," says Blackledge. "Recycled paper is a less energy-intensive process, which drastically reduces our climate impact. It also supports job creation. Based on numbers we've seen, we estimate the recycled paper industry can create potentially five times the number of jobs compared to the conventional approach of producing paper from trees."
FutureMark Paper's Steve Silver sees a potential problem with the US paper industry not investing in additional recycled production capacity. "If you look at paper, there is no doubt that the consumer preference is for green," Silver says. "Copy paper with recycled content is a great example. People are willing to pay a premium for it in stores. Higher recycled content will inevitably expand into other paper sectors. If paper buyers and consumers can't get it in the US, they will look to outside producers. We have to invest in recycled production capacity and keep investing in deinking technologies and process improvements. If we don't, we'll lose the expertise needed to compete. Recycled paper is a growth industry, and if we cede our advantage to foreign producers, it may be ground we can never get back."
Some groups believe that the US should expand waste paper collection and keep more of it for domestic consumption
The KISS concept at work
Another trend emerging in recycling is that paper buyers seem to see it as an environmental way of keeping it simple, says Silver. While green logos and certifications have proliferated, few are widely recognized by consumers. One of the few marks that still carries weight with consumers, says Silver, is the recycled symbol.
"The ‘chasing arrows' recycled symbol has struck a chord and people seem to accept that at face value. Simpler is better is what we now believe. Consumers want a simple proof of green. " As anecdotal evidence of this, Silver says "Our customers are some of the greenest corporations on the planet, so we know certification options are a must. We don't charge for a chain of custody letter but we can supply it. Surprisingly, though, the vast majority of our customers don't even ask for certified fiber, because it's enough for them to know the paper is recycled."