Growing and Sustaining Markets: Paper Recycling

Brian Hawkinson, AF&PA16th Annual Texas Recycling & Sustainability

SummitOctober 14, 2013Houston, Texas

About AF&PA

Advances a sustainable pulp, paper, packaging and wood products manufacturing industryFact-based public policy and marketplace advocacyAF&PA member companies make products essential for everyday life from renewable and recyclable resourcesCommitted to long-term success of industry, communities and environmentBetter Practices Better Planet 2020 Sustainability Initiative

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Historical Paper Market Trends

U.S. Recovery of Paper & Paper-based PackagingOverall: 65.1%Second highest recovery rateTrue environmental success storyOn track to meet Better Practices Better Planet 2020 goal:

Exceed 70% recovery by 2020

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U.S. Paper Recovery Rate 1990-2012

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70% Actual

Trend

Source: AF&PA

Historical Paper Market Trends

Historical Paper Market Trends

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20032004200520062007200820092010201120120

5,000

10,000

15,000

20,000

25,000

U.S. Recovered Paper Consumption by Major Grade 2003-2012

Corrugated

Newspapers

Mixed Grades

High Grade Deinking

Pulp Sub-stitutes

Thou

sand

s of

Sho

rt T

ons

Historical Paper Market Trends

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Mixed14%

Newspapers13%

Corrugated60%

Pulp Substitutes4%

High Grade Deinking9%

2012 Consumption of Recovered Fiber by Grade

Historical Paper Market Trends

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2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

5000

10000

15000

20000

25000

U.S. Consumption of Recovered Paper by End Use 2003-2012

Paperboard

Paper

Construction Paper & Board

Other

Thou

sand

s of

Sho

rt T

ons

Historical Paper Market Trends

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2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

10000

20000

30000

40000

50000

60000

Total U.S. Recovered Paper Consumption and Exports 2003-2012

Domestic Consumption U.S. ExportsThou

sand

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Affect of Quality on End Markets

Recovered Paper quality is marketplace issueMust meet production specifications:

CostAvailabilityMeet performance attributes of finished product

Processing requirements vary by gradeMills procure fiber that best meets production specifications

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“Advanced Resource Recovery” Affects

Marketplace issueQuality

Single stream collectionOutlet for non-recyclable paper

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Policy: Extended Producer Responsibility

Shifts responsibility form municipality to brand ownerWould disrupt existing effective infrastructureImpractical and unnecessaryIncrease costs for consumersIncrease costs for marginal returnFree markets should guide paper recovery & utilization

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Policy: Mandatory Commercial Recycling

Recovery should focus on meeting end user needsPotential for disrupting free flow of recovered paperUse and improve existing collection infrastructure

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Policy: Export Controls

Unlikely to increase paper recovery or utilizationStrong demand from export markets increase incentives to recover more paper Export restrictions:

Would eliminate incentives to increase recoveryWould leave large amounts of municipal single-stream mixed paper by creating an oversupply for domestic manufacturers…exports are the relief valveWould hurt municipalities and businesses across the supply chain Likely violate international trade rules

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Policy: Increased Recycled Content Mandates

Unlikely to increase paper recovery rateU.S. Paper Recovery and Recovered Fiber

Utilization

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1992 1996 2000 2004 2008 2012 20150%10%20%30%40%50%60%70%80%

Recovered Fiber Utilization Rate Recovery RateSource- AF&PA

estimated

“Best Practices” for Sustaining Recovered Paper Markets

Free marketplaceCollectionUtilization

System designed to meet end user requirements

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Thank You

Brian HawkinsonExecutive Director, Recovered FiberAF&PA202-463-2776brian_hawkinson@afandpa.org

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