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Recycled Paper

Recycled Paper

INDUSTRIAL CODES

NAICS: 32-2121 Paper (except Newsprint) Mills Manufacturing

SIC: 2621 Pulp and Paper Mills

NAICS-Based Product Codes: 32-21213

PRODUCT OVERVIEW

Printing and writing paper with postconsumer recycled content is a somewhat recent phenomenon. Used paper has been collected for reuse in the production of new paper and paper products for some time. However, using this reclaimed paper to make higher grades of paper, such as printing and writing paper, is relatively new.

The ability to use recycled paper pulp to produce paper of a grade sufficient to make printing and writing paper—or what many think of as copy paper—relies on advanced de-inking technology that has only been in use since the late 1980s. In the most basic terms, the de-inking process involves three steps:

  1. Reclaimed paper is sorted and then wetted. A de-inking composition consisting of a nonionic ethoxylated and propoxylated surfactant is added to the resulting wastepaper pulp slurry.
  2. This slurry is washed in order to cause the separation of the ink from the pulp fibers.
  3. The de-inked paper pulp is then separated from the ink that remains suspended in the surrounding solution.

In order for the resulting de-inked paper pulp to be of use in the production of printing and writing paper, the inks must be removed to an extent that was not economically possible before the late 1980s. Prior to that time, de-inked paper was used in the production of lower grade paper products such as corrugated paper board and industrial grade paper towels.

Printing and writing paper is the grade of paper most often encountered in daily life. It is the largest category of paper other than newsprint and comprises approximately 27 percent of U.S. paper production by volume. As a product volume leader in the paper trade, adding even a small amount of de-inked pulp to the manufacturing process significantly expands the quantity of raw material needed for its production.

The collecting and transporting of paper for recycling requires energy. It generates pollutants from collection vehicles, especially if recycling routes are not synchronized with municipal solid waste collection. However, the process of producing paper from virgin raw materials is also an energy intensive process and one that creates pollutants and waste. Trees must be harvested and transported to the mill. Harvested tree wood contains approximately 50 percent moisture. Wood pulping processes waste a lot of the initial raw material. The process used to make the type of pulp needed for making printing and writing paper—high quality bleached kraft pulp—yields around 55 percent of the initial wood input. The combination of high moisture and low yields means that as many as 3.5 tons of trees must be harvested to produce one ton of virgin bleached kraft pulp. Compared to the costs of collecting and transporting paper for recycling, the energy costs of harvesting and transporting trees per ton of virgin pulp produced are very high.

Four important developments during the final decade of the twentieth century had a profound impact on the U.S. paper industry and on the supply and demand for recycled printing and writing paper in particular: the recovered paper market, curbside collection programs, industry investments, and the implementation of paper recycling goals.

The Recovered Paper Market

The very existence of a market for recovered paper proves that paper is a valuable raw material. A national and international market for recovered office paper exists. Pricing in this market has tended to be volatile. For instance, the average annual price for sorted office paper was $92 for a short ton in 1998. In 2000 it was $148. During the 2001 recession, it fell to $85. Between 2002 and 2006, the price of sorted office paper was $105, $114, $131, $108, and $119. For the first quarter of 2007, it climbed to $152 for a short ton. The price for sorted office paper is influenced by demand, wood prices, oil and energy prices, and landfill fees. During the first decade of the twenty-first century, the cost of virgin wood fiber has trended upward. Oil and energy prices have risen as well. Landfill fees have been on an upward trajectory. In an era of growing pressure on natural resources, the recovered paper market is expected to grow in importance as a source of raw material for printing and writing paper.

Curbside Collection Programs

The expanding number of curbside collection programs for recyclable material throughout the United States proves that paper is a valuable raw material. Paper makes up approximately 30 percent of municipal solid waste and 90 percent of waste material generated in offices. It is relatively easy to identify and sort. In 1988 approximately 1,000 U.S. curbside programs were in place; in 2005 almost 9,000 such programs were operated. Municipalities and their agents operate curbside collection programs to make money from the recovered paper market, and to save money on solid waste tipping fees. Since the early days of curbside collection programs in the early 1980s, efficiency has increased through optimizing routes, collecting additional materials (like plastic), and increasing citizen participation. Financial incentives are also used to encourage participation in curbside pickup programs. In Minneapolis, Minnesota, for example, residents who participate in recycling receive a $7 monthly garbage bill credit.

Industry Investments

During the 1990s investments valued at more than $10 billion were made at de-inking facilities and for recycling-based manufacturing capacity at paper mills. Both integrated and non-integrated new construction for pulping was oriented toward recovered, sorted office paper rather than virgin fiber. Even though the yields from the de-inking process consistently run at approximately 65 percent, early nonintegrated de-inking systems endured all-time low prices in 1993, in addition to quality problems. As a result, some facilities closed. Surviving facilities improved quality, obtained long-term supply contracts that provided them stability, and solved sludge disposal problems. Sludge can be burned for energy, composted, landfilled, or used to make concrete and gravel for roads. By 2000 at least four large mills and 14 smaller mills had integrated de-inking plants, compared to eight in 1989. Numbers continue to increase because de-inking was eventually institutionalized within paper mills via staged construction. De-inking systems achieve economic scale at 200-400 tons per day, compared to 1,000-1,400 tons per day for new virgin kraft pulp mills. Smaller recycling systems of around $100 million allowed incremental expansion. They can also be rapidly permitted and built.

Paper Recycling Goals

The paper and forestry industries have been instrumental in setting goals for paper recovery, suggesting that these participants in the field are well aware of the value of paper as a raw material. Paper recycling is a success story. In 1993 approximately 38 percent of paper and paperboard consumed in the United States was recycled. Recognizing its value as a raw material, the American Forest and Paper Association (AFPA) established a goal of 50 percent recovery by 2000. The industry met that goal. AFPA then set a goal of 55 percent by 2012. Increased collection rates reflect increased economic opportunities. A nonprofit organization in New England formed the Business Recycling Co-op to efficiently route transportation through rural areas to reduce collection costs. Acting as an agent for many, it was able to obtain higher recovered paper prices. The largest U.S. nonprofit recycler emerged in 2001 from the municipal program in St. Paul, Minnesota. In 2003 Eureka Recycling launched a fleet of 14 biodiesel recycling trucks. In 2004, it opened a materials recycling facility capable of handling 60,000 tons per year.

To make a full economic and environmental comparison between recycling-based paper manufacturing and fiber-based paper manufacturing, a task force was assembled. It consisted of representatives from Duke University, Environmental Defense Fund, Johnson & Johnson, McDonald's, The Prudential Insurance Company of America, and Time Inc. The task force was to thoroughly study the costs associated with paper manufacturing from virgin fiber and from recovered paper. The economic comparison involved examining costs for recycling and solid waste management; comparative costs of manufacturing recycled and virgin paper; and market fluctuations in the recovered paper market. The environmental comparison involved three life cycle analyses: virgin production plus landfilling, virgin production plus incineration, and recycled production plus recycling.

Comparative costs of manufacturing recycled and virgin papers were analyzed. The recycled fiber system analyzed used paper collection; transporting recovered paper to a material recovery facility (MRF); processing material at the MRF; transporting the processed recovered material to the mill; manufacturing paper using recovered fiber; and disposal of residuals from both MRF operations and paper manufacturing. The virgin fiber system full life cycle analysis included harvesting trees and transporting logs (or chips) to the mill; debarking and chipping; manufacturing paper using virgin fiber; collecting paper after its use as part of municipal solid waste; transportation to landfills or incinerators; and disposal or processing.

Environmental data gathered on both systems included total energy used (purchased and fossil fuel derived); environmental releases to air (total greenhouse gas, net greenhouse gas, nitrogen oxides, particulates, sulfur oxides, hazardous air pollutants, volatile organic chemicals, and total reduced sulfur), to solid waste, and to water (absorbable organic halogens, biochemical oxygen demand, chemical oxygen demand, and suspended solids); and effluent flow. Data were compiled for four grades of paper, including office papers. The paper task force analysis documented the full life cycle advantages of recycling. Advantages are both economic and environmental. Paper recycling conserves total energy (purchased and fossil fuel derived), reduces air and water pollution, reduces solid waste, and conserves forest resources.

The report proved that recycling paper has a payoff. It results in reduced total manufacturing energy consumption from using recovered paper rather than virgin wood. The decrease in total energy consumption is larger than the increase in energy required to collect and transport paper. This is true even though the recovered paper analysis overstated recycling energy use in two ways. It relied on data from curbside collection and it included processing all recovered paper at material recovery facilities. Collection from commercial sources represents the majority of total paper recovery. Paper recovered from commercial sources often bypasses the material recovery facility and is delivered directly to the mill; the analysis assumed processing all paper to overstate energy use in collecting postconsumer material.

Definitions

In printing and writing paper, a distinction exists between preconsumer and postconsumer content. Paper labeled 100 percent recycled generally contains a percentage of both types. Preconsumer material includes scrap from manufacturing processes such as converting envelopes, paper plates and cups, boxes, and cartons. The term includes paper recovered from printing runs. The vast majority of preconsumer paper scrap has been recycled for decades. The term, however, does not include mill broke; paper machine trim reused within the mill does not qualify. Postconsumer materials are finished products that served their useful lives and will end up in landfills or incinerators if not recovered or diverted from the solid waste steam for reuse. This distinction is important.

The postconsumer distinction was established by the Resource Conservation and Recovery Act (RCRA) in 1976. It gives credit in the marketplace to paper manufacturers who invest in equipment that expands industry infrastructure so that paper that otherwise goes to a landfill can be utilized. Without the postconsumer/preconsumer distinction, mills could apply a 30 percent recycled content label to paper made from easily recovered preconsumer scrap, the scraps of their own production process. The distinction provided manufacturers with a substantial incentive to invest in de-inking equipment needed to incorporate postconsumer paper in the manufacturing process. This equipment is not necessary when using most preconsumer paper.

The quality, performance, and price of printing and writing paper with recycled content has improved since the early 1990s. Performance and price parity exists. Paper performance is assessed in two ways: technical specifications like moisture, opacity, brightness and smoothness; and performance in office equipment like copy and fax machines, and laser and inkjet printers. By either standard, printing and writing papers with recycled content perform as well as virgin counterparts in every grade, weight, size, and color. General price parity emerged due to a combination of factors. Mills became more integrated over time via staged construction of de-inking equipment. Mills added one or more recycled brands to compete more effectively for the best customers (which are large purchasers like the Federal government). Non-integrated mills buy de-inked pulp for the same reason. The de-inked pulp market enables mills to run 24 hours per day. Running at less than full capacity is expensive. Economies of scale reduce costs.

The paper industry was restructured between 1989 and 2000. Permanent restructuring was geared toward printing and writing paper with postconsumer content. A market for recovered paper grew stronger. Curbside collection programs expanded to feed the growing demand for postconsumer inputs to the system. New technology was put in place. Paper industry recycling goals have increased to 55 percent by 2012. Performance and price parity emerged. Concurrent with industry restructuring was the evolution of market demand. Beginning in the 1970s, strengthening in the 1980s, and culminating in the 1990s, legislation and presidential direction required the purchase of paper with recycled content for use within the government. The changing purchasing patterns of the Federal government, followed by all 50 states and the District of Columbia, created a market for printing and writing paper with recycled content. This is a relatively new phenomenon. The brief history of the emerging demand for printing and writing paper with recycled content is summarized in the next section on the market.

MARKET

In 2002 the paper industry reported total shipments valued at $41.2 billion, according to a U.S. Census Bureau report on the industry. From 1997 to 2002 the value of industry shipments increased 3.2 percent from $39.9 to $41.2 billion. The Census Bureau does not distinguish between paper with and paper without recycled content. Printing and writing paper is part of what the paper industry refers to as uncoated freesheet paper. In 2002 product shipments for all uncoated freesheet paper totaled $10.5 billion, down 9 percent from $11.6 in 1997. While product shipment value may be down, in April 2007, American Printer reported that demand for recycled papers is on the rise. It reiterated that in the 1990s, few mills offered recycled content printing and writing paper with even 10 percent postconsumer pulp; yet such paper with 30 percent postconsumer content was considered a standard product by 2007.

The market for recycled content printing and writing paper evolved slowly between 1976 and 2000. While measuring the size of the market takes a degree of specificity not available, federal action increased purchasing in the new segment. Legislation and presidential direction contributed to the growth of the market by requiring recycled content printing and writing paper for all federal agencies. Eventually such requirements were built into federal contracting.

Legislative Directives

In 1976 Congress established a recovered materials preference program (RCRA section 6002). It stipulated the maximum use of paper with postconsumer material. Procuring agencies had to adopt either a case-by-case policy or a minimum content standard in a written affirmative procurement program. The two largest supplies of printing and writing paper to the Federal government are the Government Services Administration (GSA) and the Government Printing Office (GPO). During the 1970s, levels of compliance were not tracked. Most procuring agencies probably adopted by default the case-by-case policy, since printing and writing paper with a minimum recycled content was not generally available.

In 1984 RCRA section 6002(c), as amended by its Hazardous and Solid Waste Amendments, required federal agencies to buy paper products containing "the highest levels of postconsumer material practicable," as long as products performed well, and were available and reasonably priced. The Environmental Protection Agency (EPA) funded a private sector study. In 1988 of 12 national paper mills, only four could meet the new requirement. Once again, compliance was not tracked. During the 1980s printing and writing paper with recycled content was not yet an idea whose time had come. GSA and GPO relied on the "reasonably available and reasonably priced" loopholes in the recovered materials preference programs to put off major efforts to comply.

Presidential Direction

In the 1990s President Clinton issued two Executive Orders (E.O.) mandating recycled content product purchasing. The 1993 E.O., "Federal Acquisition, Recycling, and Waste Prevention," was referred to as the first Buy Recycled order. It provided that the minimum postconsumer content of printing and writing papers purchased by federal agencies increase to 30 percent by the end of 1998, when reasonably available and priced. After four years under the first Buy Recycled order, paper purchases with 20 percent recycled content averaged 39 percent among the General Services Administration and Government Printing Office. This represented an estimated quadrupling of Federal government purchases of recycled paper from 1993 to 1998.

To improve compliance, EPA developed its first Comprehensive Procurement Guidelines in 1995 and a Paper Products Recovered Materials Advisory Notice (RMAN) in 1996. It issued Comprehensive Procurement Guidelines II in 1997. To track compliance, the Clinton administration held a White House Summit on Copier Paper every six months. At the June 1998 summit, the Department of Education claimed that all its copier paper (188 million sheets) contained recycled content; the Executive Office of the President claimed 99 percent of its copy paper met the standards. After the June 1998 summit, the General Services Administration announced it would sell only recycled paper. According to the Washington, D.C.-based nonprofit Government Purchasing Project, the GSA decision meant that all 18 billion sheets of copy paper bought for resale to Federal agencies contained recycled content starting in 1998.

In preparation for the 1998 increase to 30 percent postconsumer content, EPA issued its Paper Products RMAN II to reflect the higher content level. It compiled lists of manufacturers and merchants of printing and writing papers with compliant products. The large national paper mills complained during the public comment period. They felt that the government was intruding into private sector manufacturing processes. EPA's response was that RMAN II was not a mandate for makers to change processes; compliance was required only for those who wished to provide paper to Federal agencies like GSA and GPO. Spending by the U.S. Federal government runs at 20 percent of Gross Domestic Product (GDP). At the time of the first Buy Recycled Executive Order in 1998, Federal purchasing totaled $1.65 trillion.

In late 1998 Clinton's "Greening the Government through Waste Prevention, Recycling, and Federal Acquisition" E.O. expanded Federal commitment to buying recycled content paper. It eliminated the availability and price loopholes, required 30 percent postconsumer content when available, and mandated at least 20 percent postconsumer content in all purchases. Clinton encouraged compliance, in part by highlighting success and rewarding it with public recognition. He also established the Office of the Federal Environmental Executive, which encouraged further GSA and GPO action. Compliance improved.

Compliance

A 2000 report on compliance with the Greening the Government E.O. reported that the Federal government annually bought 20.9 billion sheets of copy paper. This equates to 10 million sheets every hour of every working day. As a result of Greening the Government, recycled content paper purchases from the two largest suppliers of copy paper to the Federal government—the Government Services Administration and the Government Printing Office—increased to 98 percent in 2000 from 12 percent in 1994. Government Services Administration reduced the price of recycled content paper below the price of virgin paper.

Legislation and Presidential direction between 1976 and 2000 galvanized the vast purchasing power of the government. Federal leadership, in essence, created the market for printing and writing paper with recycled content by creating a sizable base level demand for the product. Demand rose concurrent with development of industrial capacity. A precedent was set for establishing legal requirements for recycled printing and writer paper in contracting documents. EPA procurement guidelines institutionalized recycled content paper purchasing.

States followed federal precedent because state governments are funded in part by federal dollars and those funds are subject to federal procurement preferences. The Federal Acquisition Regulation requires private sector contractors, hired with federal funds, to submit documents on recycled paper. In 1986 only 13 states had Buy Recycled laws; by 2000 all 50 did. State Buy Recycled campaigns changed state government purchasing patterns, and municipal governments followed.

Local government procurement patterns were eventually modeled after state patterns, which were modeled on federal guidelines. The 2000 report on Greening the Government claimed that at least 3,000 U.S. businesses, organizations, and associations increased purchases of recycled printing and writing paper. The EPA encouraged the private sector to adopt the 30 percent postconsumer content standard through its National Recycling Challenge. Government leadership made it easier for the private sector to follow suit. The legal community accepted the challenge. For instance, the District of Columbia Bar Association issued guidelines for law office Buy Recycled programs in 2000.

The EPA mid-Atlantic regional office announced in January 2001 that it would use only 100 percent postconsumer fiber paper, exceeding the federal 30 percent postconsumer standard. The mid-Atlantic region covers Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia. Federal, state, and local Buy Recycled guidelines created market demand, since together these government agencies consume approximately 20 percent of all printing and writing papers sold in the United States.

A 2003 Worldwatch Institute study titled "Purchasing Power: Harnessing Institutional Procurement for People and the Planet" described a changed approach to environmental activism. Instead of making demands on individual consumers to change the world, the report recognized the power of mega-consumers such as government agencies to change the market by creating demand. It credited government purchasing with spurring the rise of recycled content copy paper to the level of a standard office supply in America. Worldwatch Institute called on universities, international organizations, and other mega-consumers to harness their power to influence the market. Purchasing patterns of private sector mega-consumers changed first.

The Actions of Other Large Buyers

In early 2003, Staples, a major retailer of office supplies and business services, announced its goal to achieve an average of 30 percent postconsumer recycled content across all paper products it sells. Staples is a mega-consumer and client for paper manufacturers. Office Products International reported in 2005 that Staples is the top seller of copy paper to small and medium-sized businesses. A 2006 federal procurement guideline lists Staples as the sole source provider of office supplies, including paper, to the U.S. Department of Health and Human Services. Though its move toward recycled content paper purchasing was voluntary, Staples had been the target of a two-year campaign by the nonprofit organization, Forest Ethics. Other private sector mega-consumers of paper followed Staples into recycled content paper purchasing, perhaps to avoid becoming the next target of Forest Ethics. FedEx Kinko's, Citigroup, and Office Depot are mega-consumers that changed purchasing patterns.

In March 2003 FedEx Kinko's announced that it used 30 percent postconsumer recycled content for all standard black-and-white copy and print orders. With annual revenues of $32 billion worldwide, FedEx Kinko's is a major consumer of paper, with purchasing power to create demand for paper with recycled content. Kinko's offers its customers upgrades to 100 percent recycled white paper upon request at no additional charge. The fact that this offer is an offer to upgrade says a lot about attitudes toward recycled paper in the twenty-first century. By 2006 FedEx Kinko's stocked more than 50 different postconsumer recycled papers, including 12 with 100 percent postconsumer recycled content paper and two tree-free selections.

In mid-2003 Citigroup announced that all its U.S. Citibank, Global Corporate and Investment Bank, and Global Investment Management locations adopted 30 percent postconsumer recycled copy paper. The new paper cost the same or less than virgin paper. Citigroup is the world's largest financial services firm. Financial services firms are among the largest paper users in the private sector. Though its decision was voluntary, Citibank was also influenced by a nonprofit. Environmental Defense said the change will save 6,700 tons of wood every year, enough to build 500 average U.S. single family homes.

In 2004 Office Depot followed Staples into the recycled paper market. Office Depot reported that 65 percent of its 2004 U.S. paper sales contained recycled content, a 373 percent increase over 2003. It also reported that the average recycled content of paper sold across its U.S. retail, contract business, and commercial paper sales channels reached 10.5 percent, up from 4.5 percent in 2003. With annual sales approaching $14 billion and 995 retail stores in North America, Office Depot is a mega-user with purchasing power to create demand for recycled content printing and writing paper.

In 2006 OfficeMax joined its competitors Staples and Office Depot in spurring demand for recycled paper. OfficeMax employs more than 35,000 associates at 900 stores. It announced that all OfficeMax Print & Document Services Centers nationwide use Boise Aspen 30 percent postconsumer content paper in standard print and copy applications. In 2006 the U.S. Department of Defense (DOD) started using Aspen 50 percent postconsumer content paper.

By 2007 the EPA's Comprehensive Procurement Guidelines searchable database allowed users to search by vendor, product category, or material type. While the database contained only two concrete/cement suppliers and nine paint suppliers, it listed 230 paper suppliers. For instance, International Paper offered products in eight printing and writing paper product categories: envelopes, file folders/filing products, cards, reprographic paper, tablet paper, forms bond, coated printing paper, and offset paper.

Hard facts about spending on recycled content paper are hard to come by as contradictory market data exist. In 2002 the nonprofit Conservatree stated in Resource Recycling that demand for recycled printing and writing paper contracted sharply since an estimated high of 10 percent in the early 1990s. The 2003 Worldwatch Institute report credited government purchasing with spurring the rise of recycled paper to the level of a standard office supply in America. Mega-consumers changed purchasing patterns, further spurring demand.

One way to estimate the size of the recycled paper market is to examine demand for market de-inked pulp. It is an expensive, superior product used in the higher grade papers that need to be bright white. In 2005 de-inking mills operated at 90 percent capacity. For the first quarter of 2007 the price for sorted office paper climbed to $152 per short ton, almost double what it was during the 2001 recession. In 2006 3.9 million tons of de-inked, sorted, office paper pulp were shipped. Half of this total was used in tissue products, one-third was exported, and 13 percent was used in printing and writing papers.

Paper economists attributed high capacity at de-inking facilities and price increases of recovered, sorted, office papers to increased demand created by mega-consumers like Staples, Kinko's, Citigroup, Office Depot, and OfficeMax. The 13 percent used in printing paper does not, however, reflect the volume of pulp made and used at mills that are integrated with their own de-inking facilities. An industry consultant, Bill Moore, based in Atlanta, Georgia, specializes in the recovered paper market. In May 2007 he estimated that at least 10 to 15 percent of the $10.5 billion worth of uncoated freesheet products contained recycled content.

A conservative estimate of the total demand for recycled printing and writing paper is 20 percent, based on the fact that governmental entities at all levels purchase approximately 20 percent of all paper made in the United States. To this conservative base of 20 percent, additional demand can be seen as a consequence of the changing policies of mega-users. Financial services firms are among the largest paper users. With annual revenues of $11, $32, and $14 billion, respectively, the purchasing power of mega-users of paper Staples, Kinko's, and Office Depot also served to increased demand. While measuring purchases takes a degree of specificity not available, based upon the evolution of the market due to the two RCRA actions of 1976 and 1984 and the two presidential directives of the 1990s, the figure of 25 percent is used to estimate the size of product shipments from the mill that contain recycled content. Recycled content varies from 10 to 100 percent, but 30 percent is standard.

Uncoated freesheet is shipped from the mill in four major categories. In order of market size they are: (1) bond paper, (2) writing paper, (3) printing paper, and (4) cover and text paper. Each represents approximately one quarter of the uncoated freesheet industry.

Bond Paper

Bond paper had a product shipment value of $2.9 billion in 2002, down from $3.5 billion in 1997, a decline of 16 percent. Of this $2.9 billion, an estimated 25 percent, or $730 million, contained some recycled content.

Writing Paper

Writing paper is growing in importance to the industry. Between 1997 and 2002, it grew 32 percent, from a product shipment value of $2.1 billion to $2.8 billion in 2002. Of this $2.8 billion, an estimated 25 percent or $700 million contained some recycled content. Writing paper is shipped in four formats. The major format is paper for communication or copying, comprising approximately 75 percent of shipments. Paper for communication or copying had a product shipment value of $2.1 billion in 2002, up from $788 million in 1997, an impressive 156 percent increase. Growth in this rapidly growing format is due to the increased demand for printing and writing paper for laser and digital printers and copiers. Based on the Worldwatch Institute 2003 report that concluded changed government purchasing patterns raised recycled content to a standard, it is estimated that most of this rapidly-growing class contains, at a minimum, a recycled content of 30 percent. The other three classes are technical and reproduction paper, writing tablets, and ledger, onionskin, and wedding paper.

Printing Paper

Printing paper had a U.S. product shipment value of $2.5 billion in 2002, down 10 percent from $2.8 billion in 1997. Of this $2.5 billion, based on the evolution of the market, an estimated 25 percent, or $630 million, contained some recycled content.

Cover and Text Paper

Cover and text paper had a product shipment value of $2.4 billion in 2002, down from $3.3 billion in 1997, a decline of 28 percent. Of this $2.4 billion, an estimated 25 percent, or $600 million, contained some recycled content.

The April 9, 2007 issue of the weekly news magazine, Time, revealed how mainstream paper with recycled content had become in the 1990s. The article stated, "Paper does grow on trees: 900 million of them every year become paper. We can reduce that number by buying more recycled paper. It uses 60 percent less energy than virgin paper." The April 9, 2007, special issue on global warm-ing implied that printing and writing paper with recycled content is finally an idea whose time had come and that demand was expected to continue to grow as consumers consider changing world environmental conditions.

Printing and writing papers with recycled content are classic nondurable goods. Nondurable goods are purchased for immediate or almost immediate consumption and have a life span ranging from minutes to three years. Nondurable goods are destroyed by their use so users need to repeatedly replenish their supply throughout the year. The nondurable goods market is characterized by a large variety of similarly priced products to tempt users. For example, in November 2006, Quick Printing estimated that there were more than 400 recycled printing papers on the market. An entire carton of ten 500-sheet reams of Office-Max copy paper with 30 percent postconsumer content costs $45, or $4.50 per ream. Brand loyalty for it is generally low because consumers view nondurable goods as a necessary commodity. Mega-consumers purchase paper from mills at prices at or below virgin. Consumers purchase cartons of paper based on price. Office supply stores like Staples, Office Depot, and OfficeMax typically offer "buy two get one free" specials. Since performance parity exists, consumers are expected to buy what is on sale.

There is one industry-wide exception. Changes in the paper industry in the 1990s created a well-defined premium paper segment characterized by smaller mills. The availability of market de-inked pulp had positive structural impacts. A decreasing reliance on tree cultivation made nonintegrated smaller mills more viable. Smaller mills differentiated themselves from the mega-mills created by the consolidation movement of the 1990s by focusing on premium paper, such as that used for letterhead, annual reports, and other corporate activities. Roughly speaking, premium paper sells for four times the price of commodity uncoated freesheet paper. For example, one ream of International Paper's Hammermill Copy Plus with 30 percent recycled content is $5.25, while one ream of 500 sheets of Neenah's premium specialty brand Classic Linen 100 percent recycled content paper costs approximately $25. Premium paper is characterized by heavier weights and textured finishes. For highly visible paper such as business letterhead and annual reports, the price premium exists and is willingly paid.

KEY PRODUCERS/MANUFACTURERS

The top North American manufacturers of uncoated freesheet paper control 70 percent of the market. According to Market Share Reporter 2006, the top three uncoated freesheet manufacturers in North America are Domtar Corporation (34%), International Paper (25%), and Boise Cascade, LLC (10%). Top manufacturers of premium freesheet paper are Mohawk Fine Papers, Inc., Neenah Paper, Inc., and Wausau Paper Corp. Each is profiled in alphabetical order.

Boise Cascade, LLC

With its paper headquarters in Boise, Idaho, Boise Cascade, LLC is the third-largest manufacturer of uncoated freesheet paper in North America, with an annual capacity of 1.6 million tons. It employed around 10,000 workers in 2006 and owned four paper mills located in International Falls, Minnesota; St. Helens, Oregon; Wallula, Washington, and Jackson, Alabama. Its Jackson, Alabama, mill was integrated with the ability to de-ink 300 tons per day of sorted office paper. Boise Cascade, LLC, was formed in 2004 when Madison Dearborn Partners purchased the paper and wood products (and building materials distribution) businesses from Boise Cascade Corporation, which is now known as OfficeMax, Inc. Boise focuses on the government sector. One of its major customers is the U.S. Department of Defense (DOD). In May 2006 Boise introduced Aspen 50, a 50 percent postconsumer recycled copy paper. It developed Aspen 50 within weeks of receiving the DOD request for it. The Aspen brand was developed to meet Federal and state guidelines for postconsumer content. Boise's corporate communication materials were designed for government and other large institutional buyers, or mega-consumers. Boise manufactures two brands of copier and printer papers, the X-9 and X-9 PLUS.

Boise-branded recycled copy and printer paper was made with a minimum 30 percent postconsumer fiber. Aspen has 30 percent postconsumer fiber, Aspen 50 has 50 percent postconsumer fiber, and Aspen 100 has 100 percent postconsumer fiber. Colored papers with 30 percent recycled content are sold under Boise-branded lines MP Colors and MP Brites.

Domtar Corporation

Headquartered in Montreal, Canada, with its operational headquarters in Fort Mill, South Carolina, the mammoth Domtar Corporation employed nearly 14,000 people in North America. Since its acquisition of Weyerhaeuser Co. in March 2007, this behemoth has grown even larger. It was the second largest uncoated freesheet producer in the world in 2007. The newly merged Domtar operated 16 uncoated freesheet mills in North America, and towered over other freesheet makers with a total annual capacity of 5.2 million tons of paper. Domtar shut down the paper machine at its mill in Baileyville, Maine, for six weeks in April and May 2007, controlling the market by temporarily reducing supply from its one paper machine with a 125,000 ton per year uncoated freesheet capacity. Paper giants like Domtar focus on commodity freesheet paper that can be cheaply made in large runs that efficiently utilize their expensive equipment. Giants must focus on producing paper for the largest consumers. Large consumers include the Federal government, so Domtar had a significant driving force to incorporate recycled content into its mammoth annual freesheet capacity. Domtar's corporate communication materials were designed for investors, not consumers.

Domtar Recycled Copy contains 30 percent postconsumer content. Domtar Pastel comes in nine soft shades all made with 30 percent postconsumer fiber. Domtar's Colors comes in 18 pastel colors; some contain 30 percent postconsumer content, some 20 percent. Domtar's Nekoosa line is a value premium brand with three lines: Bond, Linen, and 25 percent Cotton all contain 30 percent postconsumer fiber. Domtar Feltweave contains 30 percent postconsumer fiber, with the exception of Carrara white, which contains only virgin fiber. Domtar Proterra combines organic colors with a handmade look and 40 percent postconsumer content. Domtar Sandpiper is its most environmentally responsible line. It is made with 100 percent postconsumer fiber and comes in 11 spa-influenced colors. Domtar Skytone is imitation parchment paper with 30 percent postconsumer content in 10 colors. Domtar Solutions comes in 19 colors, all containing 30 percent postconsumer fiber except Carrara white.

International Paper

Headquartered in Stamford, Connecticut, International Paper was the second largest uncoated freesheet manufacturer in North America. It employed approximately 60,000 people worldwide and operated 18 U.S. mills in 2006. It announced it was to close its Terre Haute, Indiana, containerboard mill at the end of 2007. International Paper is vertically integrated. It owns forests and harvests and transports raw fiber. Its 55-page full-color, stylishly-designed 2007 "Sustaining the Environment" promotion detailed its dedication to sustainability, forest certification, environmental conservation, and recycling. It was a perfect example of extensive corporate communication designed for investors, not individual consumers of printing and writing paper. International Paper focuses on large customers like commercial printers and converters. Commercial printers buy large rolls of paper for long print runs. Converters buy large rolls of paper to convert into smaller sizes for specialty uses like envelopes, file folders, and writing tablets. It also operates an extensive private label program. Private label paper includes brands like 3M, Canon, Epson, and Hewlett Packard, which have private label papers ostensibly designed to work especially with their laser and inkjet printers.

International Paper makes Hammermill brand paper designed for business and home use in product categories including copy paper and multi-purpose paper. Hammermill Inkjet and Laser paper are both made with 10 percent postconsumer fiber. Hammermill Great White Copy contains 30 percent recycled fiber. International Paper reiterated in 2007 that Great White Copy meets the Presidential Executive Order for recycled content—a reminder that the presidential directives from the 1990s still influence paper production more than ten years later.

Mohawk Fine Papers, Inc.

Independently-owned Mohawk Fine Papers, Inc., is headquartered in Cohoes, New York. In 2006 it had 800 employees and an annual capacity of 175,000 tons. Mohawk is a perfect example of a small mill that focuses on premium printing and writing papers. Since it is nonintegrated, it benefits from structural changes that resulted in de-inked market pulp. The behemoth Domtar is 30 times larger with its annual capacity of 5.2 million tons. Since acquiring the fine papers business of International Paper in 2005 for $65 million, Mohawk has operated three mills (six paper machines), two converting centers, and four distribution centers. The acquisition more than doubled Mohawk's size and made it the largest premium paper manufacturer in North America. In 1991, at $80 million in annual sales, Mohawk differentiated itself from the mega-mills by segmenting itself firmly into higher end paper products. Revenues rose 7 percent, reversing a three-year decline. Its flagship grades include Strathmore, Mohawk Superfine, Beckett, and Via. Customers willingly pay the extra premium for specialty papers, not only because the quality is noticeably higher but because it helps send a sustainability message. For instance, the World Wildlife Fund and General Electric have used Mohawk paper for their annual reports. Mohawk's corporate communications are designed for the consumer. It is the only mill with one easy-to-read guide that charts each of its recycled content papers, including the percentage of recycled content in each.

Neenah Paper, Inc.

The high-end, publicly-owned Neenah Paper, Inc. was created in 2004 when paper giant Kimberly-Clark divested its premium text and cover paper business. The new company's first independent sales report was $775 million, up from 2003. Neenah Paper is headquartered in Alpharetta, Georgia, and had North American manufacturing operations in Wisconsin, Michigan, and Nova Scotia, Canada in 2006. Its mill uses freesheet equipment to make premium papers used for letterhead, stationery, resumes, business cards, brochures, and envelopes. It focuses on consumers—even at the scrapbooking and rubber stamping level. In 2007 Neenah acquired Fox River Paper Company, LLC, of Wisconsin, with its broad array of flagship premium brands. Fox River Paper had 2004 sales of $140 million. The 2007 acquisition demonstrated that Neenah saw prospects for growth in the high-end premium printing and writing paper market. Neenah planned to make money by optimizing the combined operations and product portfolios.

Neenah offers various levels of recycled options. Some papers in its Classic Crest line are 100 percent postconsumer fiber. In its Classic Laid line, some papers are 30 percent postconsumer content, as are some in the Classic Cotton and Classic Columns lines.

Wausau Paper Corp.

Wausau manufactures value segment premium paper. In December 2004 Wausau Paper acquired Missota Paper Co., LLC, an idled commodity freesheet paper mill in order to focus on growth in the premium printing and writing paper value market. Wausau restarted one machine to push out more of its value premium paper. Wausa has mill and converting locations in Brainerd, Minnesota; Brokaw, Wisconsin; and Groveton, New Hampshire, as well as a converting facility in Appleton, Wisconsin. In April 2006 Barron's reported that Wausau shares showed dismal results. Consequently, Wausau imposed some product price increases and announced plans to sell 42,000 acres of timberland.

Wausau is committed to communicating to the consumer. Its corporate communications explained in simple terms two popular paper industry seals that are not generally understood by the typical consumer. For instance, one brochure explained that the Green Seal certifies that the paper product contains 30 percent postconsumer fiber and that the Forest Stewardship Council seal certifies that the company bearing the certification uses sustainable methods to care for the forests from which it acquires its raw materials. Wausau's eco brochure highlighted its entire line of Exact Eco 100, because the entire product line contains 100 percent postconsumer fiber, unlike many other lines from competitor mills that offer only a few styles within a line with 100 percent recycled content. Another fact sheet discussed the benefits of recycled paper. These Wausau materials were designed to be educational and informative, rather than sales focused. Approximately 80 percent of Wausau premium papers contain a minimum of 30 percent postconsumer fiber. It utilizes more than 45,000 tons of postconsumer fiber each year, reducing landfill usage by over 150,000 cubic feet—approximately 2,250 semi truck loads per year.

MATERIALS & SUPPLY CHAIN LOGISTICS

Recovered Paper as a Material Input

Recycled paper is a term used to refer to both the product of recycling systems as well as the material input to that system. The quantity of used, recovered, sorted, and de-inked paper as a raw material for the pulp to make new printing and writing grade paper (uncoated freesheet paper) has varied over the years. Figure 181 provides data on how the average annual quantity has varied over the period 1976 through 2006.

Materials Used to Make Paper

Papermaking is an industry that is a frequent target of environmental activists. It is also an energy intensive industry. As a result, paper manufacturers tend to tout environmental activities surrounding energy use as part of their public relations campaigns. Small manufacturers make a special effort to promote environment-friendly energy usage, in part because their products—premium printing and writing paper—tend to be more expensive and are purchased by those who tend to be environmentally and socially conscious.

One example of the sort of environment-friendly production modifications made by a small paper manufacturer, and then promoted by the company is Neenah Paper's appearance on the History Channel's ModernMarvels program in January 2007. Neenah was featured in a segment about recycling. The program followed Neenah's process of manufacturing recycled paper and converting the wastewater into beneficial uses. Each year, 5,000 tons of sludge is converted to steam, electricity, and glass aggregate. Neenah then purchases the steam back to dry paper and heat its mill in Neenah, Wisconsin. For instance, in 2006, it re-purchased 350 million pounds of steam. The company estimates that using the steam, known as green steam, reduces its natural gas consumption and carbon dioxide emissions by 80 percent annually. Decreasing carbon dioxide by this amount is equivalent to planting 250,000 tree seedlings, which naturally remove carbon dioxide from the air. Neenah's use of green power makes it a Green Power partner. Other partners include Fortune 500 companies; local, state, and federal governments; trade associations; and colleges and universities; all involved in a voluntary program advocating green power as a way to reduce the risk of climate change

In another example of a paper manufacturer investing in ways to use energy more efficiently, Mohawk announced in 2003 that it was the first major manufacturing company to derive a significant amount of its electricity from renewable windpower through its purchase of renewable energy credits. At that time, it touted its Mohawk Windpower Portfolio, which included Mohawk Options, Strathmore Writing, Strathmore Script, Beckett Expression, Beckett Concept, Via Portfolio, and Mohawk Color Copy. Mohawk does not actually own any windmills; it instead purchases windmill produced electricity.

Material inputs to the paper manufacturing process, other than energy, are reported on at the national level by the U.S. Census Bureau. It reported that in 2002 the paper manufacturing industry used $15.1 billion worth of materials to produce $41.2 billion worth of products. The value of materials used declined by 14 percent between 1997 and 2002, from $17.6 billion to $15.1 billion. During the same period, the value of products shipped grew 3.2 percent from $40.0 billion to $41.2 billion. The majority of the materials used to produce paper are organic and inorganic chemicals, woodpulp purchased from paper mills, and pulpwood bolts and logs.

Industry-wide spending for organic and inorganic chemicals decreased 20 percent between 1997 and 2002, from $3.9 billion to $3.1 billion. The industry decreased its spending in every chemical class purchased, except for chalk. Chalk is an inorganic chemical also known as calcium carbonate used in papermaking as a filler and a pigment. Spending for it increased 6 percent from $262 million to $278 million.

The top three chemicals purchased, in order of 2002 expenditures, are starch, clay, and chalk, inorganic chemicals used primarily to improve paper strength. Starch is used at the wet end of the papermaking process to improve strength and at the dry end as a sizing. Clay is added during the pulping stage to fill in pores of wood fiber to create strong paper. Among all chemicals needed, the industry decreased spending the most for chlorine, caustic soda, and titanium dioxide.

Chlorine purchases decreased 73 percent from $82 million in 1997 to $23 million in 2002. Chlorine is used primarily to make pulp white. Caustic soda purchases decreased 54 percent from $248 million in 1997 to $113 million in 2002. Caustic soda is known by scientists as sodium hydroxide and by laypeople as lye; it is used to hasten pulp cooking and to make pulp white by removing impurities known as lignin. Titanium dioxide is a lustrous, lightweight, pure white pigment used to boost whiteness. Industry-wide purchases for it decreased 39 percent from $366 million in 1997 to $200 million in 2002.

Industry-wide spending for purchased woodpulp fell between 1997 and 2002, from $4.1 billion to $2.8 billion, a decrease of 32 percent. Manufacturers purchase woodpulp from two sources. The largest expenditure is for woodpulp obtained at the market rate from other paper mills. The other source is woodpulp produced at affiliated mills. Expenditures for woodpulp purchased at the market rate decreased 50 percent, from $3.3 billion in 1997 to $1.7 billion by 2002. Expenditures for woodpulp produced at affiliated mills increased 30 percent from $890 million to $1.1 billion.

Spending on pulpwood bolts and logs decreased 11 percent between 1997 and 2002, from $3.0 billion to $2.6 billion. Pulpwood bolts and logs are generally classified as either softwood or hardwood. Softwoods are integral for making high grade paper products. In order of expenditure value, softwoods are classed as southern pine; chips, slabs, cores, and other mill residues; softwoods such as Douglas Fir and Jack Pine; spruce and true fir; and hemlock. Expenditures for softwoods were $1.5 billion in 2002. Spending in all softwood categories decreased, with the exception of one. Douglas Fir and Jack Pine spending more than doubled, from $123 million to $259 million, an increase of 111 percent. Softwoods are known as conifers. Conifers like spruce, fir, pine, balsam, and hemlock are preferred because they are fast-growing, plentiful, easy to grind into pulp, and produce long fibers. Long fibers are favored for premium paper.

Hardwood pulpwood bolts and logs, along with chips, slabs, cores, and other mill residues, are also consumed. Industry-wide spending for hardwood products decreased 20 percent between 1997 and 2002, from $1.5 billion to $1.2 billion.

Finally, the materials needed to package paper for shipping and selling are an important part of the total material input to the manufacturing process. Industry-wide spending for packing material was $1.2 billion in 2002. The types of packaging products used include paperboard containers, boxes, and corrugated paperboard; packaging paper and plastics film; and glues and adhesives.

DISTRIBUTION CHANNEL

Recycled paper is part of the larger paper industry and shares the same distribution channels as the industry as a whole. The distribution of recycled printing and writing paper, or copy paper, is characterized by the vertical integration of the top three manufacturers. Large retailers and institutional buyers also play an important role in the distribution channel for recycled paper.

The top three North American manufacturers of uncoated freesheet paper are vertically integrated. They own forests, systems for harvesting and transporting the lumber to mills, the mills in which paper is made, trucking operations for delivery of product, and distribution centers. Boise Cascade, LLC, for example, owns 30 distribution centers in North America. Domtar has more than 80 paper distribution facilities in North America. International Paper owns xpedx, which has more than 250 distribution branches located primarily in the United States.

Large retailers are another major segment of the distribution channel. From the manufacturers' perspective, these large entities—Costco, OfficeDepot, OfficeMax, Staples, and Wal-Mart to name the largest—are seen as mega-consumers. Most large retailers work through wholesalers or contract directly with paper manufacturers for the products that they stock on their shelves. Their influence on the use of paper with recycled content can be great. Because these large paper buyers are able to negotiate lower prices based on high volumes their willingness to highlight recycled paper can have an important impact on how much of this product is purchased by the public at large.

Another category of entities considered to be mega-consumers from the paper makers' perspective include government agencies at the federal, state, and local level. Together, government entities purchase approximately 20 percent of all printing and writing paper sold in the United States. Most government purchasing agencies, like the Government Services Administration and the Government Printing Office, purchase paper directly from the mill and are able to negotiate prices at or below the price of virgin paper. Because of legislative efforts over the years to mandate the use of recycled paper, the influence of this category of mega-consumer has had an important and disproportionately great influence on creating a strong market for both reclaimed paper and paper with recycled content.

The distribution channel that exists for some high-end paper products with recycled content, in particular the paper made by smaller mills, is different. These smaller, high-end manufacturers rely on paper merchants. Paper merchant stores are uniquely situated between the wholesale and the retail markets. Examples include Anchor Paper and Unisource. Mohawk has thousands of stock keeping units, five warehouses, and more than 300 paper merchants. Because Paper is heavy and people generally need it quickly, paper merchants make paper available at paper stores located geographically around the country, and deliver it next day when ordered.

KEY USERS

The users of recycled paper can be split into three categories, each based on how they buy paper. First are the large, mega-consumers, or the mega-users, which include large retailers and copy service companies, governmental purchasing departments, and large corporations whose purchases of paper are handled centrally. These users buy in bulk, and consequently, negotiate low prices and are often able to purchase paper with recycled content for prices comparable to the price of paper made with virgin pulp.

The second category of buyer is the small institutional buyer. This category of paper user includes small businesses both public and private. These buyers are usually not able to negotiate volume discounts as aggressively as mega-users, but in some cases, the larger participants within the category will work with retail chains to get some pricing advantage. Usually users at this level must be motivated to buy paper with recycled content based on something beyond its price advantage, since paper with recycled content is slightly more expensive than paper made with virgin pulp.

The third category of user is made up of individuals or small groups of people, such as churches and clubs. This category of paper user is motivated by a variety of concerns. Many such buyers buy exclusively based on price and simply purchase what is on sale at any one time. Others are sensitive to the impression that the paper itself makes on the recipient of their communications, as in the case of a resume, for example. Those interested in artistic pursuits may be driven by questions of quality when buying printing and writing paper. For the most part, as awareness grows about questions of resource allocation and sustainability, interest in recycled paper grows. Whether that interest is translated into purchasing decisions all depends on the uses to which the paper is intended and the ability of the buyer to pay a premium for recycled paper.

ADJACENT MARKETS

One of the key reasons behind the evolution of the recycled paper market and demand for recycled printing and writing paper is that using recycled paper saves trees in the forest from being harvested. Although this is true, the effect is more complex than it would first appear. Recycling can reduce the number of trees harvested for making paper because recycled fiber is a direct substitute for virgin fiber. Just because trees are not used for paper does not, however, mean they will not be harvested and used to make lumber, other wood products, or wood chips for exportation.

Changes in the paper industry during the last decade of the twentieth century increased the availability of high-quality, de-inked pulp. Its availability extends the virgin fiber base. Printing and writing is the grade of paper most often encountered in daily life. It is the largest category of U.S. paper, excluding newsprint, comprising approximately 27 percent by volume. Because it represents so much volume, adding even a small amount of de-inked pulp to the manufacturing process significantly expands the available raw fiber resources. The result may be that forests may be managed differently by those who own them.

RESEARCH & DEVELOPMENT

Resource management, cost containment, and compliance with government regulations are the three factors which drive most of the R&D efforts carried out by paper manufacturers and their suppliers in relation to recycled paper. The rising costs of energy during the first decade of the twenty-first century has led most manufacturing firms to focus on ways to conserve and to more efficiently use energy. The paper industry is no exception.

A great deal of water is needed in the paper making process as well as in the de-inking process. Consequently, water management is another area in which research and development efforts are focused by this industry. Years of drought in the western United States has brought the subject of water usage to the foreground nationally. The paper industry is investing in new ways to more efficiently use water and to recycle the water is does use to the greatest extent possible.

The de-inking process is another area in which a great deal of R&D is expended. The process itself is complex and requires fine tuning whenever there are changes in the mix of paper types coming into the system. Work is done almost constantly by way of fine tuning the process to achieve the best possible pulp output. The chemicals used in the de-inking process are also the object of much R&D expenditure.

Another area focused on by paper manufacturers related to recycled paper is the tracking of compliance with federal and state Buy Recycled program requirements. An example of this sort of research is seen in the State of California's hiring of Green Seal in 2003 to do a study of its buying patterns with special attention to paper product compliance, since paper represents one of the largest volume purchases by governments. The resulting report, "The State Agency Buy Recycled Campaign Evaluation" acknowledged that Buy Recycled campaigns were mandated but not often fully enforced.

California is considered to be a good model of Buy Recycled campaign compliance. Because of the volume of goods and services it annually procures, it is one of the largest among the 50 states. California's population and economy are larger than those of many countries and the programs it implements are viewed as models by many. California has long been addressing Buy Recycled guidelines. It leads all 50 states in its dollar volume of recycled content products purchased, both annually and cumulatively. For 2001, the last year for which data were available at the time of writing, California purchased printing and writing paper valued at $47 million. Of this total, paper with recycled content represented more than half (64%), or $30 million.

California spent $47 million on printing and writing paper in 2000–2001; an estimated $30 million or 64 percent had recycled content. Massachusetts, as of 1997, spent $5.7 million on printing and writing paper; an estimated $4.9 million, or 85 percent, had recycled content. Four Federal agencies reportedly spent $530 million on printing and writing paper; an estimated $400 million, or 75 percent, had recycled content. Only North Carolina had actual numbers available. In fiscal year 2001/2002, the State of North Carolina tracked its office paper purchasing. It spent $24 million on printing and writing paper; of that amount, $21 million, or 86 percent, contained recycled content.

CURRENT TRENDS

Recycled paper is not likely to be a passing fad. The two RCRA actions of 1976 and 1984 created a market by requiring federal purchases of recycled content paper. The two presidential directives of the 1990s strengthened demand. A 2003 Buy Recycled compliance research project showed that when compliance was tracked and/or estimated, federal and state Buy Recycled programs purchases averaged 77.5 percent recycled content paper. Eventually private sector demand for paper was spurred.

The newest trend is environmentally preferable paper. This is paper that reduces environmental impacts while meeting business needs. Former President Clinton's 1998 "Greening the Government through Waste Prevention, Recycling, and Federal Acquisition" Executive Order not only expanded federal commitment to buying recycled content paper, but also introduced the environmentally preferable concept. As federal, state, and local Buy Recycled programs grew, governments expanded their program to include environmentally preferable purchasing. These programs typically involve examining the multiple environmental impacts of products or services throughout their life cycles, from resource extraction to ultimate disposal. The EPA issued "Final Guidance on Environmentally Preferable Purchasing for Executive Agencies" in 1999.

The labeling of products, including paper, as sustainable or carbon neutral is a trend in the middle of the twenty-first century. In March 2006 Print Week reported that demand for sustainable paper is growing. The label sustainable means that the production methods used to produce the labeled product is carried out in an environmentally responsible manner that can be sustained into the future. The label of carbon neutral is used to describe an entity which has had its carbon dioxide emissions calculated; reduced where possible; and offset through the purchase of renewable energy credits and verified emissions reductions. Mohawk announced in May 2007 that four of its paper lines were carbon neutral. It accomplished this by purchasing wind power renewable energy credits, and combining them with verified emissions reductions credits to offset all of the thermal energy used in the production of four premium paper brands: Strathmore Writing, Strathmore Script, Beckett Concept, and Beckett Expression. Emissions from all energy used to make papers in the four carbon neutral lines is offset with purchased wind-generated electricity renewable energy credits and verified emissions reductions. By doing so, Mohawk was seeking to make paper with a net zero energy climate impact.

An item developed to promote awareness of responsible resources usage in the production of paper and to educate people about the differences between virgin pulp papers and recycled papers is the paper calculator. This calculator is designed to determine the carbon footprint of a particular paper. It calculates the summation of U.S. average energy and wood consumption and environmental releases across the full life cycle of each of five major grades of paper and paperboard. For a given grade, it allows the user to compare the environmental impacts of papers made with different levels of postconsumer recycled content, ranging from virgin paper to 100 percent recycled paper. The calculator provides a detailed printout of wood and energy consumed in production, as well as the quantity of greenhouse gases, wastewater, and solid waste produced as a byproduct of production and use of the paper in question. The paper calculator was developed by the Environmental Defense paper task force cited earlier, and underlying data is updated regularly.

TARGET MARKETS & SEGMENTATION

Two environmental certifications are available regarding recycled paper content. Green Seal certifies that recycled papers are made with a minimum of 30 percent post consumer fiber, and the Forest Stewardship Council ensures paper meets standards for responsible forest management.

Founded in 1989, the Washington, D.C.-based Green Seal is an independent, non-profit organization that promotes environmentally responsible products and services. Green Seal works with manufacturers, industry sectors, purchasing groups, and all levels of government. Green Seal environmental and evaluation standards are considered to be the most rigorous measures—based on state-of-the-art science, using internationally recognized methods and procedures.

An international non-profit organization founded in 1993, the Washington, D.C.-based Forest Stewardship Council (FSC) supports the growth of responsible forest management worldwide through international standards. It has guidelines for labeling products from certified forests. In 2004, it updated standards regarding the use of FSC logo on products and on promotional materials to ensure consistent and correct use of FSC labels on products. Three different FSC labels exist for three different types of certifications: FSC 100%, FSC Mixed Sources, and FSC Recycled.

FSC 100% label

This seal applies to virgin fiber. Products with an FSC 100% label come from forests certified as being in compliance with the environmental and social standards of the Forest Stewardship Council. Because the Forest Stewardship Council emerged from an industry trade association, the American Forest and Paper Association (AFPA), its communications are oriented toward industry members, not consumers. It rarely explains its labeling, and its ubiquitous FSC 100% label tends to be viewed by consumers as an indication of recycled content.

FSC Mixed Sources label

Products with a Mixed Sources label support the development of responsible forest management worldwide. The Mixed Sources label replaces the FSC's old system for percentage based claims. Paper carrying the Mixed Sources label is made with wood that comes from FSC certified forests, company controlled sources, and/or recycled material. Company controlled sources follow FSC standards to exclude: (1) illegally harvested timber, (2) forests in which high conservation values are threatened, and (3) wood from forests harvested for the purpose of converting the land to plantations or other non-forest use. Five sub-types of the Mixed Sources label exist.

FSC Recycled label

Products with a 100% Recycled label support re-use of forest resources and, in accordance with FSC standards, only use postconsumer recycled wood or fiber. The recycling symbol identifies postconsumer recycled content in these products

RELATED ASSOCIATIONS & ORGANIZATIONS

American Forest and Paper Association, http://www.afandpa.org

Environmental Defense, http://www.environmentaldefense.org

Green Seal, http://www.greenseal.com

National Office Paper Recycling Project, http://www.usmayors.org/uscm/uscm_projects_services/environment/national_paper_recycling_project.html

National Paper Trade Association Alliance, http://www.gonpta.com

The National Recycling Coalition, Inc., http://www.nrc-recycle.org

National Resources Defense Council, http://www.nrdc.org

Recycled Paper Coalition, http://www.conservatree.com

U.S. Environmental Protection Agency, http://www.epa.gov

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"Citigroup Chooses Recycled Copy Paper." Environmental News Service. 24 June 2003.

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"EPA Office Opts for Recycled Paper." Environmental News Service. 30 January 2001. Available from 〈http://www.ens-newswire.com/ens/jan2001/2001-01-30-09.asp〉.

"Federal Procurement: Better Guidance and Monitoring Needed." United States General Accounting Office. June 2001. Available from 〈http://www.gpp.org/greengovt.pdf〉.

"General Services Administration to Buy Only Recycled Paper." Government Purchasing Project. 26 February 1998. Available from 〈http://www.gpp.org/feb26-98.html〉.

Gleason, Gerard, et al. "Recycled Paper-Plenty Available." Resource Recycling. February 2002.

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Hall, Bob. "Recycled Paper Goes Round and Round." Quick Printing. November 2006, 20.

"In Brief: Paper Demand is Growing." Print Week. 23 March 2006, 22.

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Lenz, Sabine."Green Glossary: Environmental Protection Agency Sets Standard for Paper." American Printer. 1 March 2006.

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Paglia, Todd. "At the White House Copier Paper Summit." Washington Post. 18 January 1998.

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"Recommendations for Purchasing and Using Environmentally Preferable Paper." The Paper Task Force of Duke University, Environmental Defense Fund, Johnson & Johnson, McDonald's, The Prudential Insurance Company of America, Time Inc. 1995 and 2002. Available from 〈http://www.environmentaldefense.org/documents/813_PTFcomplete.pdf〉.

The State Agency Buy Recycled Campaign Evaluation. State of California, Environmental Protection Agency. July 2003.

see also Copy & Printer Paper, Premium Paper

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