Meeting a high-grade challenge

The shrinking supply of recovered high grades has been top of mind for tissue producers the last two decades. Increased digitization further exacerbated by the COVID-19 pandemic caused supply to plummet as office buildings were abandoned in favor of remote and hybrid work more than four years ago.

Certain industries still prioritize print records, but this has done little to affect dwindling supply, according to panelists on the High Hopes for High Grades? session at the Paper & Plastics Recycling Conference in Chicago in October.

“Whether it’s SOP [sorted office paper] or hard white, it’s been more and more difficult to get as a supply,” said Kelly McNamara, director of custom research and recovered fiber at Montreal-based Numera Analytics and moderator of the session. “There’s been a big reduction in people working in an office and, therefore, that paper has gone alongside that. But, as people return, will the consumption come back?”

According to recent foot traffic data, the answer to that question could be “No.”

Location analytics platform Placer.ai revealed roughly 70 percent of people have returned to the office, but this has not yet translated to a significant increase in high-grade paper generation. In fact, North American woodfree paper consumption has dropped 10 percent per year from 2018-2023, despite demand for high grades remaining relatively consistent, according to data presented by McNamara.

While consumption of old corrugated containers (OCC)—which make up 73 percent of the recovered paper market—has grown by approximately 5 million metric tons since 2010 given growing demand for packaging, consumption of other grades has fallen over the last 15 years, according to Numera’s data.

“High grades have dropped, but they’ve been dropping at a little bit more than half a percent a year,” McNamara said.

The session, along with McNamara, included Andrew Dunbar, director of commodity sales at Houston-based WM; Adam Holt, vice president of Baldwin Park, California-based Allan Co.; and Stephane Dube, vice president of sales at Toronto-based Cascades Recovery.

The panelists examined the state of high grades amid continued supply challenges and discussed approaches at the material recovery facility (MRF) and mill levels when it comes to boosting recovery, and as contamination and supply continue to pose difficulties while tissue demand increases, paper mills are confronted with the choice between virgin and recovered feedstock.

Making the switch

Shredding and document destruction companies traditionally have been large suppliers of SOP, but as more records are being created and stored digitally, MRFs and mills have seen decreasing supply.

Changing quality and availability of high grades also have raised concerns, particularly for export buyers, but Holt, who is based on the West Coast, said mill groups overseas have proven adaptable to fluctuating prices and market conditions.

“It’s been this gradual decline [of supply],” Holt said. “We see mills gradually adjusting.”

Holt suggested mills could begin dipping into the residential mixed paper stream to make up for this loss of SOP; however, Dube said, this will prove difficult.

“The tissue market is customer-driven, so at the end of the day, we’ll make the product we can sell to the consumer,” he explained, stressing that raw material used in tissue production, including mixed paper, must be clean.

“Talking about mixed [paper] as a raw material will be a big challenge. … In Europe, paper is beige and it works. Here in North America, it doesn’t work. It’s just not accepted.”

“It’s almost like you have two trains heading in opposite directions,” Holt added. “Especially in California, you have the state and municipalities in California asking for more and more material to go into the stream, and then you have the mill groups of the world asking for better and better quality. … Here, [recyclers] are in the middle just being stretched.”

Because of the need for clean raw material, mills increasingly could turn to virgin feedstock, like eucalyptus pulp, instead of recovered high grades. This will depend on how much mills are willing to pay for recycled fiber, especially when the bales don’t yield as much as they used to.

“It’s sad to say that because it’s a product that won’t be recycled,” Dube said of tissue products. “We’re using virgin fiber more and more to produce a good that is not circular.”

Making investments

Paper mills have been employing different measures and quality tests to pinpoint the root of contamination in high-grade bales, but these methods are not perfect.

“Each bale needs to be tested,” Dube said.

Cascades has invested in a technology called the probe system, which provides insight into the percentage of lignin, an organic polymer, in the bale, correlating to mechanical fiber contamination.

“It’s not totally reliable, but at least it gives us a kind of indication [of if we are] aiming in the right direction or not,” he said. “The technology, I don’t think, is fully ready to give us a full picture of lignin content.”

Instead, he said, work must be done at the source to provide visibility into contamination, which includes asking printers to clarify mechanical fiber content.

“As a [MRF], we have to be able to recognize it, to separate it,” Dunbar added. “If we can’t recognize it, either mechanically or physically by people, we have no chance of separating it.”

As high grades become scarce and the makeup of the stream evolves, he also said MRFs will pivot in whatever way is necessary to capture said material as long as it remains profitable.

“Where there’s demand and there’s a source and there’s ability, the economics of a trading market will make it so that bale will be made,” Dunbar explained.

With the decline of high grades in the material stream, Dunbar said MRFs have been focused on how and where to retrieve material and how to do it cleanly and consistently.

“When we’re having a lot of success with optical [sorters] and segregating that high-grade MRF inbound stream, … we see a lot of potential to all MRF operators in that high-grade MRF collective aspect,” he added.

Dube said many paper mills struggle to process emerging boxboard grades, like polycoated solid bleached sulfate (SBS), which, according to McNamara, is being generated at roughly 1 percent more per year.

“We need to invest massively in our equipment to be able to remove that fiber from the poly single-side or double-poly, which is even worse,” he said. “Now we’re facing a situation where even if you give me double-poly or single-side SBS, I’m not able to consume it. I don’t have the capacity to process that material, so options are a bit limited.”

Dube added that mills also will need continued investment in more cleaning equipment and upfront quality management systems to keep up with changing material streams.

“The mills have been investing,” Dunbar added. “What they use today is very different from 10 years ago. … That investment is a natural cause and effect to keep up with the [changing] stream. It’s the constant evolution, and the day they don’t invest, then we have a day of reckoning to say what happens to the paper next.”

The author is digital editor of the Recycling Today Media Group and can be reached at tkazdin@gie.net.