Following the Paper Trail:

Market Barriers to Environmentally Preferable Paper    

by Wayne Cullen

A MillWatch Special Report, November 2004

Walk into almost any stationery store, including big box retailers, and try to find office paper with significant recycled content. It’s not easy. Those pallets at the entrances are almost always piled high with paper derived from virgin pulp, usually whitened with chlorine derivatives and without any guarantee that its origin is well-managed forests. If available, recycled paper is hidden in the nether regions, costs more and is usually not chlorine-free.

Environmentally Preferable Paper (EPP)

Paper with at least two of the following three characteristics:

• Significant (at least 30 per cent) post-consumer* recycled content;

• Bleaching technologies with no chlorinated substances (totally chlorine free); and

• Forest Stewardship Council-certified forest management on virgin fibre sources.

• Post-consumer – diverted from the waste stream after final consumer use.

Following the Paper Trail: Overcoming Market Barriers to Environmentally Preferable Paper (EPP) , a study funded by Industry Canada’s Office of Consumer Affairs, conducted by the Reach for Unbleached! Foundation and the Aurora Institute, analyses the office paper industry in Canada. The study looks at the Canadian pulp and paper industry within the context of the global industry, and assesses current production levels and markets for EPPs in Canada, identifies obstacles to further market growth, and makes recommendations for stimulating consumer demand as well as production capacity.

Study findings are based on 55 interviews with representatives from key stakeholder groups, focus groups, an Aurora Institute/Ipsos Reid poll of 1005 Canadians on their attitudes and paper purchasing habits, an on-line survey of 137 members of the Purchasing Management Association of Canada (PMAC) and an extensive literature review. An advisory committee of eleven experts representing all stakeholder groups supported the report findings.

A central finding is that a market opportunity is being missed by Canadian paper manufacturers even while they complain of flat revenues. It is the marketing of EPPs which offers the potential growth of a healthy and sustainable pulp and paper industry, but this will require producers, distributors, governments and consumers to jump aboard.

Consumer unawareness is a major obstacle. Many people are conscientious about their recycling practices, and consequently think the paper they buy contains recycled fibre. Incoherent labelling of paper products adds to the confusion. Paper producers in turn blame the lack of consumer demand for low production levels of EPPs. They site price, quality and convenience as consumer barriers – arguments refuted in the report. Instead, Following the Paper Trail points to entrenched industry structures, attitudes and relationships (between forest, chemical, manufacturing, wholesale and retail sectors) as the most significant barriers to an expanding EPP marketplace.

The Canadian industry produces mostly low-grade papers (newsprint, Kraft paper) with low market value and low post-consumer recycled content. (e.g. There are no mills in British Columbia producing standard office paper with a significant percentage of recycled fibres.) Most of the recovered waste paper collected in the province goes into Kraft paper, paperboard and newsprint, much of the latter ending up in California, where regulations push newspaper publishers to use 50 per cent recycled fibre.

While in recent years the Canadian industry has spent billions of dollars on upgrading environmental production methods and increasing mill capacity for recycled fibres, the pulp and paper industry still uses huge amounts of resources: energy, water and of course forests, and it remains the third largest industrial polluting sector in Canada, including significant production of greenhouse gases that contribute to climate change. Producing paper with more recycled and alternate fibbers, like agricultural waste and crops like hemp, kenaf and straw, would help Canada meet its Kyoto commitments.  

Clare Mochrie, Chair of the Aurora Institute, says institutional procurement policies that include green considerations would help turn things around. “Organizations could take great steps towards reducing deforestation around the world by changing how they approach paper buying. The price difference between EPP and virgin fibre paper is no longer substantial. If these organizations include social and environmental concerns in their buying policies, EPP becomes an easy choice.”

Shifting the marketplace toward EPPs will require greater consumer awareness – especially knowing that blue boxing alone is not enough and that “closing the loop” by actually purchasing EPPs is required – combined with a shift in strategy on the part of producers, distributors and retailers, a demonstration of political will, and a commitment from bulk purchasers in government, educational and health institutions and the private sector.

Findings on the Paper Trail

•     EPPs are a niche market in North America, claiming only 5 to 7 per cent of market share.

•     Fifty-eight per cent of the survey respondents would pay up to 5 per cent more for EPPs.

•     When asked, one-third of Canadians who claim to buy EPPs say their paper contains more than 50 per cent post-consumer recycled content. Sixty-one per cent of the retail consumers surveyed claimed they purchased paper with more than 20 per cent post consumer recycled content. These consumer beliefs are not supported by industry sales.

•     Canada recovers 44 per cent of its total paper waste for recycling, but only 15 per cent of its printing and writing papers (newspaper and paperboard account for the higher average)

•     Printing and writing papers are the highest added value paper sector and are the fastest growing segment of the Canadian industry.

•     Industry acknowledges that many of the quality issues surrounding recycled, totally chlorine-free papers have been resolved

•     Efforts by non-profit organization Markets Initiative have led to a significant increase in book and magazine publishers using EPP

•     The process of recycling paper consumes considerably less energy than is required to turn trees into pulp. Reprocessing is estimated to require only 10-40 per cent of the energy used to create pulp from timber

•     Despite the prognostications of a paperless world due to the proliferation of virtual communication practices, global demand for office papers continues unabated. World demand for paper has doubled in the past 20 years and is forecast to double again by the year 2010 (Forest Products Association of Canada (FPAC) (http://www.fpac.ca/english/info/future.htm)

•     A non-profit buying co-op run by Reach for Unbleached in BC now sells EPP paper containing 100 per cent post-consumer recycled content from Quebec. This is the closest Canadian mill to BC from which paper with this high degree of post-consumer recycled content can be obtained.