Agility needed in export markets

a new U.S. presidential administration and looming policies overseas have prompted recovered paper exporters to emphasize agility and adaptability in the new year.

In a Paper Industry Update Fireside Chat, hosted Jan. 15 by the Washington-based Recycled Materials Association and Davis Index, participants noted how fast the market can change and highlighted several issues impacting the recovered paper export market in 2025 and beyond.

“Most notably today ... we very well could have been kicking this off by discussing our second East Coast port strike in three months, so that right there, I think, speaks to how quickly things transpire in this business and how quickly one strategy can go right out the window,” said Jeff Rice, head of international sales at CellMark Recycling, a division of Swedish marketing and supply chain services company CellMark.

"I think the real key to get across here today is the need to be agile, the need to be able to adapt and overcome.” – Jeff Rice, CellMark Recycling

“I think the real key to get across here today is the need to be agile, the need to be able to adapt and overcome.”

Many of Rice’s customers are facing a policy in Europe that has them concerned.

In October 2023, the European Union adopted a CBAM, or Carbon Border Adjustment Mechanism, to put “a fair price” on the carbon emitted during production of carbon-intensive goods entering the EU and to encourage “cleaner industrial production” in non-EU countries. The policy aims to help the EU achieve carbon neutrality by 2050.

The EU’s CBAM is being implemented in phases and is expected to be fully in place by 2026. However, the policy initially will apply to certain products with a high carbon risk, including iron and steel, cement, fertilizers, aluminum, hydrogen and electricity.

When asked how CBAM will affect recovered paper exports to non-EU countries like the U.S., India and Thailand, for example, Rice said the issue is “absolutely something that is front and center for our colleagues across the pond.”

“It would definitely shake up the commodity flows out of Europe and, as a result, would have a ripple effect throughout the rest of the market,” he said.

Rice has overseen the Indian market the last several years and estimated that half, “if not 60-plus percent,” of the mills in India would find it difficult to meet the criteria set by the EU to import at the same pace.

“That right there is just one example of the second largest waste paper market in the world, second now only to Thailand, and with Thailand, I receive messages daily about crackdowns from customs on a myriad of commodities coming across their borders,” Rice said.

Some also question the fate of mixed paper exports, as countries like Thailand have imposed restrictions on recovered paper coming across their borders.

Part of the issue, Rice said, is the disconnect between inspectors and those working in the industry.

“There’s a disconnect between the inspectors ... and those of us in the industry that understand the fallible nature of these grades ... as byproducts of the waste stream,” he said.

“If just looking at industry standard specifications with a grade like mixed [paper], often, it’s going to be in the eye of the beholder. Oftentimes, for an inspector or a Customs agent, perception will be reality. As much as we … have come to understand the nature of these grades ... it’s not a perfect science.”

He said it’s challenging to explain to entities overseas that what they’re seeing is good-quality mixed paper because, if they have “an untrained eye,” they might still see it as trash.

“We see more and more markets implementing inspection protocols—whether it be Thailand, whether it be Indonesia. ... Now we see so much production in Malaysia, where those inspection protocols are required as well. I think it’s good for the industry that there’s a little bit more standardization to some degree, but again, having it recognized on paper is certainly different than in practice.”