January/February 2004
The paper industry wants to recover 55 percent of all fiber consumed in the United States by 2012. What are the opportunities and obstacles involved in meeting that goal? Here’s the first of a two-part series on increasing paper recycling.
By Robert L. Reid
Imagine filling the Empire State Building with scrap paper. Then repeat that image 22 times. That’s how much additional fiber the paper industry hopes to find each year under an “aggressive” new recycling goal that seeks to recover 55 percent of all paper consumed in the United States by 2012, says the American Forest & Paper Association (AF&PA) (Washington, D.C.), which launched the program last year.
To help reach this 55-percent goal, AF&PA has developed integrated public- and private-sector partnerships with U.S. EPA, the CarrAmerica office building management firm, and the Keep America Beautiful organization
“to educate and encourage towns and cities, office buildings, schools and private citizens to recover more high-quality papers in their communities and workplaces,” the association notes. Details of these partnerships were not available at presstime.
ReMA has officially endorsed the 55-percent recycling goal and is working closely with AF&PA on that issue as well as other concerns through a joint task force whose mission statement seeks “to identify and address issues of mutual concern, starting with the issues of quantity, quality, and access to fiber.”
A Coming Crisis
Paper recovery in the United States stands at just over 48 percent, according to AF&PA’s 2002 figures, a level that represents “an outstanding success story in national recycling,” says W. Henson Moore, AF&PA’s president and CEO. Despite that success, “a crisis is looming” that requires the industry to find even more fiber, he warns.
“As domestic and export demand for U.S. recovered paper continues to grow, the paper industry runs the risk of seeing existing recycled paper and paperboard capacity idled due to insufficient amounts of available recovered paper,” Moore explains. In particular, “domestic demand will be squeezed by an anticipated 50-percent surge in U.S. recovered paper exports,” mostly to Asia and especially to China, he notes.
Indeed, global demand for recovered paper is likely to increase by more than 6 million mt each year for several years to come, predicts Pete Grogan, manager of market development for Weyerhaeuser Recycling (Federal Way, Wash.), who adds, “So the challenge is pretty clear arithmetic.”
What’s also clear, however, is that it won’t be easy to find additional fiber to feed both domestic and export demand. Ask almost anyone in the recovered paper industry—from packers to mills—and one phrase keeps getting repeated: the “low-hanging fruit” is gone. In other words, all the easily collected, traditionally valuable material is already being recovered through existing paper recycling programs.
Take ONP and OCC, for instance. Those two grades are currently being recovered at rates of 71 percent and 74 percent, respectively, according to AF&PA. While many believe it’s possible to find some additional fiber in these categories—Grogan, for instance, thinks that the amount of corrugated being shipped to the United States as product containers is underreported—others predict that the industry is reaching the practical limits on collecting OCC and ONP from traditional sources.
For one thing, a certain portion of OCC is coated with wax, which makes it unusable by many mills. Containers that get contaminated by food residue also reduce the available supply of OCC. Indeed, the European Recovered Paper Council (ERPC) (Brussels, Belgium) recently stated that some 19 percent of all paper products can never be collected or recycled due to technical reasons or the way the products were ultimately used, such as paper stored in archives. Thus, “the maximum collection rate would not be 100 percent, but rather 81 percent, or even less,” ERPC concluded.
Moreover, it’s not simply a question of quantity. Fiber quality is also a major concern, especially in residential material collected at the curbside, notes AF&PA and various mills. Just ask SP Newsprint Co. (Dublin, Ga.), which must reach out as far as 600 miles to secure the fiber it needs. Even then, the mill must increasingly re-sort material that was supposed to be mill-quality, notes Ralph Simon, vice president, fiber supply and marketing.
Where, then, will the industry find the extra fiber it needs—in a clean enough form—to reach its 55-percent goal?
Seeking Untapped Sources
For Fred von Zuben, chairman and CEO of recycled boxboard maker The Newark Group Inc. (Cranford, N.J.), “the answer has to be greater recovery from the not-fully-tapped mines of offices, schools, institutions, and households.”
That’s what Fred von Zuben told a paper recycling conference last year, and his views on untapped paper “mines” seem to be supported by EPA’s recent study of municipal solid waste in the United States. According to the agency’s figures—which some in the recycling industry challenge as too low—Ameri-cans sent some 45 million tons of paper and paperboard products to landfills in 2001, including nearly 4 million tons of newsprint and over 8 million tons of corrugated containers.
Though some of this paper is probably too contaminated for reuse, “our sense is that there is a great deal of paper going into the waste stream that could be recovered,” says Janet Kincaid, AF&PA’s manager, fiber recovery and utilization. For instance, only about 40 percent of all paper consumed in offices is being recovered, she notes. That includes fiber traditionally associated with an office environment—such as envelopes, computer paper, and ledger paper—as well as material that employees might simply have brought to their desk to read over their morning coffee.
“I can’t even begin to imagine the amount of newspapers and magazines” that get thrown into the trash of a high-rise office building every day, says Johnny Gold, senior vice president of The Newark Group’s Recycled Fibers Division (Marblehead, Mass.).
Households are also seen by various mills and packers as a potential source for extra fiber. Along with residential ONP, households could be an untapped mine of OCC—in part, from all the boxes used to ship products purchased over the Internet directly to homes or from the fiber-rich containers people use to carry home products bought at bulk-purchase retailers.
Then there’s all the paper consumed by home offices—estimated at more than 30 million such enterprises and growing by several million a year.
More Mixed? More Exports?
Though it may be possible to separate out some of the more valuable grades of fiber from these office, residential, or institutional streams, many in the industry believe that increasing the collection of such material means putting more mixed paper on the market. Fortunately, that “happens to match up well with demand,” especially China’s rapidly growing appetite for mixed material, notes industry consultant Bill Moore of Moore & Associates (Atlanta). In his view, mixed paper is “the only frontier” in paper recovery.
Not everyone is thrilled with that prospect. SP Newsprint’s Ralph Simon, for instance, believes the 55-percent goal should work “to improve recycling across the board, not just generate more mixed paper.” The AF&PA/ISRI task force’s mission statement stressed the need to recycle “greater amounts of premium quality recovered paper,” Simon notes, and he wants to be sure that the general push for more paper doesn’t overlook those “who need a particular grade to make a product.”
Opinions also differ on whether more recovered fiber is needed simply to ship overseas or to feed domestic mills. In contrast to record export demand, domestic capacity declined in 2001 and 2002 and was expected to drop for the third straight year in 2003 before rising slightly in 2004 and 2005, AF&PA says. While some of the additional fiber that AF&PA hopes to see recovered will inevitably be exported because foreign markets are likely to pay higher prices, “if the American public recycles 55 percent of all the paper that’s consumed in the United States, the U.S. paper industry will be able to use all of that fiber,” says Janet Kincaid.
Moreover, the realities of the global scrap paper market mean that material will shift from region to region, chasing demand, notes Ben Harvey, an owner of E.L. Harvey & Sons Inc. (Westborough, Mass.) and president of ISRI’s Paper Stock Industries (PSI) Chapter. “Who knows where it’s going to end up?” he asks. Though Harvey has no answer, he stresses that “by collecting more, it’s going to stabilize the market for our domestic mills.”
Of course, recognizing that there’s uncollected fiber in offices, homes, and institutions such as schools and hospitals isn’t the same thing as obtaining that extra paper. After all, the paper has been there all along—it simply hasn’t been easy enough or economical enough to pursue.
Let’s look at offices first. In a subsequent issue, Scrap will explore efforts to extract more fiber from residential and institutional programs, as well as moves by various mills to secure additional material on their own.
Office Obstacles
Price is always a driving force in paper collection, especially from hard-to-reach sources such as downtown office buildings. Unfortunately, even PSI’s Harvey concedes that “the prices aren’t good enough today in the marketplace to make me aggressively go out and scour through every waste basket to see what kind of scrap paper is in there.” Still, he’s bullish on scrap paper’s future, believing the potential demand is strong enough to “kick up” prices to a level where recyclers will soon aggressively seek that additional office fiber.
Another recycler describes the efforts needed to collect additional fiber as an investment in the future. This investment, the recycler says, would prepare packers for the possibility that export demand will create domestic fiber shortages in the next few years. “Are the markets good enough today? That’s hard to say,” comments Jeff Kibler, executive vice president of the recycling division of Pratt Industries U.S.A. (Conyers, Ga.), formerly known as Visy Recycling. “But when the dust settles, can you afford not to do it?”
Office scrap paper is, of course, a valuable commodity, and recyclers do pay large generators of this material for their fiber. But recyclers often charge small generators to collect their office fiber. The value of the paper collected can reduce the amount of this bill, but for some offices the fact that they must pay anything to have their office paper recycled is a stumbling block.
“People don’t think twice about paying for trash removal,” notes Les Ulanow, general manager of ABC Recycling Services (Washington, D.C.). Yet some building owners resent paying for recycling services, which they see as an extra payment for a “waste” product they feel could have been tossed in the trash.
Sometimes, ABC will offer the desktop bins or other collection equipment for free to ease the cost of collection for customers, but in the end there’s still a charge for the overall pickup.
“It’s the biggest obstacle we run into,” says Ulanow, who estimates that he loses three customers who want to stop paying recycling fees for every two new accounts he signs up. At ABC, office collections are like “fighting a slowly losing battle,” he says.
Another obstacle to collecting office paper is that different firms might service neighboring buildings. So recyclers must work hard to establish a high-enough density of accounts for their commercial pickups, explains Bill Moore. “This involves getting a sales force out there that can identify accounts and put together a route that has, say, 80 stops in seven miles,” he says.
Also, be sure to use the right equipment, he adds. Moore favors front-end loader trucks that require only a single person to operate, though he concedes that such vehicles are expensive and “not real common in the commercial recovered paper business.” Other recyclers stress the benefits of using smaller route trucks for downtown pickups rather than trying to maneuver on city streets with the 53-foot semitrailers used for other collections.
The physical layout of the office building itself can be a problem. Older buildings, for instance, often have little room for storing scrap paper between pickups. That’s one reason why City Carton Co. Inc. (Iowa City, Iowa) has invested “quite a bit of money” in rolling tubs and 90-gallon carts to collect office material, says Andy Ockenfels, vice president of operations. “We realized that Gaylord boxes and wooden pallets aren’t something that fits into everybody’s building plans,” he explains.
Plus, there can be local government restrictions on the times when material can be picked up. “In some cities, you can’t start to collect until after 7 a.m., which makes it difficult because now you’re dealing with rush-hour traffic and all-day traffic,” says Ben Harvey. Moreover, “now you’re competing for dock space with other materials that are coming into the office building,” especially when the building can only staff the loading area during certain hours, he notes, concluding, “It does hinder the collection of more office paper.”
Expanding Options
A key factor in collecting more office paper seems to be making the recycling programs easy to understand. That’s why Balcones Recycling (Austin, Texas) developed its trademarked “Anything That Tears” program, which quite literally takes any kind of paper that can be ripped—from newspapers and white or colored paper to OCC, envelopes, magazines, soft-cover books, spiral binders, and so on. Basically, only paper contaminated with food, restroom papers, or papers that contain synthetic materials are excluded.
“Every time we’d go on a sales call to try to acquire a new generator, they would ask: ‘What can we put in? What can’t we?’” explains Clay Wilson, senior vice president for Balcones’ Dallas operations. “You’d spend a lot of your conversation going through the list, rather than just saying ‘put anything that tears in the bin’—which is what we found ourselves saying a lot anyway.”
Now, when Balcones launches a recycling program at a new account, it distributes desktop bins that prominently display the “Anything That Tears” slogan. The company also sets up a booth at the building’s entrance or in a public area such as the cafeteria and might even have the janitorial staff place flyers on all the employees’ chairs, Wilson explains. These educational efforts will “usually line up the things you can recycle in one column and the things you can’t in another,” he says. “So you have one really long list and right next it you have a real short list of don’ts—that’s eye-catching and appealing to people that this is going to be pretty easy to do.”
Balcones collects about 50-percent more fiber with this comprehensive effort than a white paper-only program, Wilson estimates. Indeed, the program has been successful enough to license the “Anything That Tears” phrase to Tri-R Recycling in Denver as well as American Airlines and Dell.
Pratt Industries’ recycling division takes a similar approach in the Southeast, using front-end loader equipment to collect office paper along with phone books, magazines, junk mail, and everything else that tears, explains Jeff Kibler. The companies’ two containerboard mills—one in Conyers and the other on Staten Island in New York—have modern enough equipment to take such a varied stream of fiber, he says. This technology, which is heavy on screening and features a shorter-than-average forming table, even enables Pratt’s mills to use shredded paper from the company’s document-destruction services. (Pratt’s corporate parent in Australia goes even further to find additional fiber: “We ‘single stream’ whole office buildings [there], take in everything, then sort out the garbage,” says Kibler. This approach works even when the paper is contaminated with food wrappers, soda cans, and other waste—provided the levels aren’t too high.)
The idea of combining office collections with document-destruction services is catching on. At City Carton, for example, the combined collections represent a sort of “valet service” for an office’s fiber, with a single stop taking care of both recycling and paper shredding—especially for smaller generators, who would be charged for pickups anyway, notes Andy Ockenfels.
The document-destruction side of City Carton’s business is growing due to government privacy laws such as 1996’s Health Insurance Portability and Accountability Act (HIPAA), Ockenfels says. As a result, City Carton is actively seeking more fiber through paper shredding—and working hard to make sure the material remains usable for its mill customers. For instance, City Carton works closely with its accounts to keep out contaminants such as microfiche and plastics that would render the material unrecyclable. The company’s sales force—recently enlarged, in part, to seek out more such shredding work—helps promote the economic incentive of having offices presort the documents that will be destroyed.
“We show them the dollar numbers—what it costs to pick up, what the shredding costs are, and what the return on the fiber is—and adjust their pricing accordingly,” Ockenfels says. “So if they want to keep a clean program, it’s more cost-advantageous for them.”
Keeping It Clean
Such presorting may be essential, sources note, because HIPAA rules can actually prevent a document-destruction firm from separating out contaminants from office paper. “In some cases, you’re not even allowed to look at the product,” explains one source. “You have to throw the whole corrugated carton with the records into a grinding operation ... and when you grind something up, it becomes totally unsortable. You cannot break it back down. So there may be problems with trying to make a new product out of the material.”
If the office being serviced is a medical or dental office or a pharmaceutical operation, the problems can increase. One firm recalls handling a load of shredded paper that apparently had included a quantity of obsolete pills that were ground up with the paperwork. “When the load was dumped on the floor, up came a cloud of dust, and several of our employees got sick,” the source explains.
For mills and packers, such stories emphasize the need to maintain fiber quality while also seeking to recover more quantity. Though some believe that an overall larger pile of scrap paper will actually improve quality by giving recyclers more material to cull through, others aren’t as sure, pointing to what they see as a growing contamination problem with residential fiber when it’s collected at curbside.
Scrap will explore those concerns and other aspects of finding more fiber in the March/April issue. •
Robert L. Reid is managing editor of Scrap.
The paper industry wants to recover 55 percent of all fiber consumed in the United States by 2012. What are the opportunities and obstacles involved in meeting that goal? Here’s the first of a two-part series on increasing paper recycling.