THE IMPACT OF IN-PLANT PAPER SCRAP ON RECYCLED PAPER POLICIES Prepared by: Nancy VandenBerg, Markets for Recycled Products
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1 'Io 1 THE IMPACT OF IN-PLANT PAPER SCRAP ON RECYCLED PAPER POLICIES Prepared by: Nancy VandenBerg, Markets for Recycled Products March 12, 1993 A considerable amount of scrap paper is generated within the paper mill which is not considered vvmill broke" in the US Environmental Protection Agency (EPA) recycled paper procurement guidelines, by the American Forest and Paper Associatip (AFPA) in its public presentations nor by the Recycled Paper Sub- Committee of the American Society of Testing and Materials (ASTM) in it's current proposed definitions. The ASTM definitions have not yet completed the balloting process and may change. This dry paper scrap is defined as ftbrokell in paper dictionaries. llfinishinglv broke includes trimmings and llcullfl (off- specification material that is re-pulped). lrconvertingll broke is generated on-site when mills produce finished products. Finishing and converting broke rarely, if ever, leave the mill. It is considered high-value fiber. Both the fiber and additive content and the chemistry are known. It is returned to the pulping vats. Paper mill technicians track this scrap paper as part of their efforts to control waste and improve the economic efficiencies of the mill. Finishing and converting broke are generated within the mill beyond the point when mill broke is produced. For reference, the current proposed ASTM definitions are: Mill Broke is any paper generated in a paper mill prior to the completion of the paper manufacturing process which is unsuitable for subsequent application but can be re-used in the paper manufacturing process. Parser Manufacturins Process is an operation which begins with the pulping of fibrous and non-fibrous raw materials and ends after the first slitter/winder with the cutting and trimming of the reel into smaller rolls. In an operation in which the finished product is sheeted directly off the machine, the production of rough sheets constitutes the end of the process. In and operation which involves supercalendaring, the end of the process is the at the slitter/winder following the supercalendar. In an operation which involves off machine coating, the process ends at the slitter/winder following the coater or the supercalendar associated with the coater. The EPA guideline did not exclude this material in the "waste paperf1 definition derived from the Resource Conservation and Recovery Act. Some mills count it toward their recycled content goals, other mills do not. Some mills include it in their use of tfpulp substitutell tonnages reported to AFPA, other mills may not. 1
2 One of the critical controversies raised by the EPA guideline is whether counting finishing and converting broke toward the minimum recycled content requirement should be allowed. Industry would like credit for its inherently economic practice; the environmental community sees no reason to offer special buying preferences for materials that have always been used for practical manufacturing reasons. Industry and procurement representatives at the January 1993 ASTM meeting voted against defining finishing broke and converting broke because %nnecessary definitions complicate the product specification process and make it harder to reach consensust1. Pulp substitutes were not defined because Itthe material is either mill broke or recovered paper material and identifying its possible usage is irrelevant". The environmental community disagrees. Mills that use and count their in-plant scrap in the recycled percentage of their paper have a competitive advantage over mills that count only scrap paper purchased from outside sources. Inplant fiber already belongs to the mill and most manufacturers consider it too valuable to sell off. The ratios and identities of hard and softwood fibers, chemical additives, fillers and so on are known in in-plant scrap. It can be entered directly into similar batches. Purchased scrap, even pulp substitutes, have variables that are not perfectly known to the mill using it. In addition, the value of purchased scrap includes transportation charges as well as any profit from those who process and broker it. This competitive advantage can easily transfer directly to the price per unit in competitive government and private bids for ttrecycledtt paper. To understand the impact of in-plant scrap generation on recycled paper definitions and content standards, we need to know what the scrap is and how much is generated each year. The attached research and analysis was conducted quickly. Information was gathered from technical representatives at a few mills, not from a complete cross-section throughout the industry for each product category. Sources and individual mill estimates are not given because they reveal competitive information. While the estimates are believed to be reasonably accurate, EPA should resolve this issue by conducting thorough research. Mill technicians have data about their own companies at their fingertips. Thorough research can be accomplished in less than a month. The data can be aggregated using existing procedures and the identity of each mill offering data can be withheld to protect competitive information. 2
3 IN-PLANT PAPER SCRAP GENERATION, BY MAJOR INDUSTRY CATEGORY (in 000 short tons) a b C d 1991 Finishing Converting Total Paper Grade Prod. Broke Broke F + C Total Production 81,064 Construction (e) (1, 570) Paper/Paperboard 79,474 % Amt. % Amt. % Amt. PAPER 39, 078 Printing Coated Gdwd Coated Free Uncoated Gdwd Uncoated Free Bleach Bristol Thin Cotton Total Printing 22, 066 4,040 f 3,319 f 1,718 f 11,504 f 1,146 g 197 g 142 g In-Plant Scrap Tissue 5,669 f Newsprint 6,841 f Pkg & Industrial 4, PAPERBOARD 40,416 Corrugated 24, * Linerboard 17, h Medium 7, h Total Corrugated In-Plant Scrap Boxboard 7, Export 4, Total Paperboard In-Plant Scrap Total In-Plant Scrap 4, In-plant + (DLK) out-of-plant corrugated converting* 6,657-9,233 In-Plant to Total Production = 6% to 9% In-Plant + DLK to Total Production = 8% to 12% see next page for explanatory notes papfncnv.asm 3
4 SOURCES AFPA - American Paper Institute, (now American Forest and Paper Association) 1992 Statistics of Paper, Paperboard & Wood Pulp, data through FAL/RAC - vlevaluation of Proposed New Recycled Paper Standards and Definitionsvv, Franklin Associates, Ltd., January 27, 1992 for the Recycling Advisory Councills IvFinal Report on Recycled Paper Definitions, Procurement Standards, Measurement Protocol, Labeling Guidelines and Buy-Recycled Initiatives" February 6, NOTES a. AFPA 1991 US production data in 000 short tons All estimates of scrap generation rates were provided by technical mill personnel based on the experience of their own mills and general knowledge of their industries. b. Finishing Broke = The waste paper resulting from the various finishing operations performed after it leaves the paper machine. Finishing operations include supercalendaring, plating, slitting, rewinding, sheeting, trimming, sorting, counting and packaging. Ruling, punching. pasting, folding, and embossing are also sometimes considered as finishing operations. Adapted from: The Dictionary of Paper, API, 1980 c. Converting Broke = trimmings or unusable material generated in the mill, after completion of the finishing process, when fabricating a base material into a product with different characteristics or form. Total F+C = the total estimated amount of finishing and converting broke generated in-plant. Some plants ship parent or jumbo rolls off-site for conversion to final product. With the exception of corrugated, these estimates do not reflect off-site conversion because it is not a large percentage at many mills and because conflicting estimates of industry-wide practices were offered. e. Construction in 000 short tons = wet machine board (loo), building paper (600) and insulation board (870). These products are not covered by the EPA paper guideline. f. Separate finishing and converting estimates were not provided. g. Estimates for uncoated paper were used without independent verification. h. Corrugated converting scrap (8%-9% or 1,959-2,203 thousand tons) is nearly all produced at box plants some distance from the linerboard and medium mills. 4
5 IN-PLANT PAPER SCRAP AS A PERCENTAGE OF AFPA RECOVERY GOAL (in 000 short tons) a b C* d* % Recovery In-Plant In-Plant Paper Grade Prod. Goal - AFPA Scrap plus DLK % Amt Amt % AFPA Amt %AFPA Total Production 81,064 Paper/Paperboard 79,474 40% 31,790 4,698 15% 6,657 21% (- Construction) to 7,028 22% 9,233 29% PAPER 39,078 40% 15,632 2,682 17% to 4,114 26% Printing Paper 22,066 40% 8,826 1,471 17% NA to 2,428 28% NA Tissue 5,669 40% 2, % NA to % NA Newsprint 6,841 40% 2, % NA Pkg & Industrial 4,506 40% 1, % NA to % NA PAPERBOARD 40,416 40% 16,166 2,016 12% 3,975 25% to 2,914 18% 5,119 32% Corrugated 24,483 40% 9,793 1,000 10% 2,959 30% to 1,319 13% 3,524 36% Boxboard 7,326 40% 2, % NA to % NA a. AFPA 1991 US Production in 000 tons b. AFPA 1995 goal for recovered paper c. Estimated in-plant scrap generation (included in AFPA goal) d. DLK = double lined kraft clippings generated from corrugated paperboard by box plants off-site NOTE 1: * Percentage shown is the portion of the AFPA goal that is met by in-plant scrap, not the % of total scrap used. NOTE 1: There is significant additional converting scrap tonnage generated out-of-plant by related and un-related entities. NOTE 2: 40% is also a reasonable estimate for high preconsumer requirements in a dual minimum content standard system.
6 IMPACT OF SELECTED MINIMUM CONTENT STANDARDS ON PAPER SUPPLIES The US Environmental Protection Agency (EPA) will have to substantiate its reasons to keep or change recycled content definitions and minimum content standards in the recycled paper procurement guideline. There is sufficient information on hand now to estimate the impact of various approaches. The debate about what qualifies as recycled content in paper and about how much should be required can no longer be pursued without estimates of the ultimate impact on potential recovered paper supplies. Various recycled content percentages for either or both preconsumer and postconsumer paper can be tested in a simple data base model. Various anticipated levels of industry participation can also be tested against sample minimum content standards. While there can be no assurance that any of the test scenarios will be accomplished over time, an overview of possibilities will certainly inform the decision making process. A few caveats must be used when selecting the variables: 1. Technically achievable minimum content standards must be chosen. 2. Accurate yield factors must be used. Franklin Associates, Ltd. developed yield factors for previously published research. These can be checked and revised as necessary during industry research for other purposes. 3. Estimates of recovered and recoverable preconsumer and postconsumer paper must be used. 4. Domestic production data available from AFPA should be used to estimate preconsumer scrap generation. 5. Domestic new supply data available form AFPA should be used to estimate postconsumer scrap generation. Two examples of this approach follow. They are based on information on hand. For example, 1991 AFPA data are used in some instances and 1990 New Supply data are used in others. While the differences between the two years is not major, more accurate results will occur if data from the same year are used. All postconsumer paper generated is not recoverable. A reasonable estimate of recoverable postconsumer paper should be used to measure the impact. 6
7 IMPACT OF SELECTED CONTENT STANDARDS ON POSTCONSUMER SUPPLIES Postconsumer (PC) Printing and Writing Paper (P&W) (1991 AFPA Production in 000 short tons) a b C d e f Grade 1991 Yield % of Total Total Type of PC Prod. %PC Factor Industry PC used PC gen. P&W (9) 22, ,017(h) Tissue 5, ,809 It Newspaper 6,841 30% Mags (i) Total Postconsumer P&W paper consumed in this assumption 3,226 Percent of total Postconsumer P&W generated 16% 1995 estimated recovered P&W office waste at 40% of supply 3,630 SOURCES AFPA - American Forest and Paper Association 1992 Statistics of Paper, Paperboard & Wood Pulp, data through FAL/RAC - "Evaluation of Proposed New Recycled Paper Standards and Definitionstf, Franklin Associates, Ltd., January 27, 1992 for the Recycling Advisory Council, February 6, Recovery of Office Waste - "Supply of and Recycling Demand for Office Waste Paper, 1990 to 1995, National Office Paper Recycling Project, Franklin Associates, Ltd. (FAL), July NOTES a. AFPA US production data in 000 short tons b. plausible percentage of Postconsumer paper selected c. Yield Factor = 1/FAL yield factor developed for RAC Example: P&W FAL yield = 70%; 1/.70 = 1.43 d. plausible though higher than current percentage of industry participation selected e. Total Postconsumer (PC) = (a) (b) (c) (d) f. based on FAL/RAC Table A-1; PC generation = 81.2% new supply new supply = US production adjusted for imports/exports g. P&W = Printing and Writing Papers h. Postconsumer P&W =.812(24,651) 1991 new supply = 20,017 see f i. 30% Mags = magazines (a P&W grade) used to deink newsprint 7
8 IMPACT OF RECOVERED PAPER STANDARDS ON POSTCONSUMER SUPPLIES Recovered Postconsumer and Preconsumer (RP) Printing and Writing Paper (1991 AFPA Production in 000 short tons) a b C d e f g Grade 1991 Yield % of Total Total Total Type of RP Prod. %RP Factor Industry RP used PostC PreC P&W (9) 22, ,786 20,017 Tissue 5, ,619 NA Newspaper 6,841 30% Mags (h) NA (i) Total Recovered P & W paper used on 7,875 Total Postconsumer available 20,017 Total Out-of-Plant Preconsumer available 4,250 AVAILABLE PRECONSUMER Available Out-of-Plant Preconsumer = 4,250 4,250 Available In-Plant Tissue Preconsumer = Low estimate In-Plant P & W Preconsumer* Total Preconsumer 5,260-5,900 * estimates of in-plant scrap generation and converting scrap overlap; converting scrap includes in and out-of-plant converting operations; a low, plausible estimate is included here. RELATIONSHIPS Available preconsumer to total recovered paper used 67%-75% Postconsumer needed with in-plant and out-of-plant 1,975-2,615 Postconsumer needed compared with postconsumer generated 10%-13% Postconsumer needed if no in-plant broke is used 3, 625 Postconsumer needed compared with postconsumer generated 18% see notes and sources next page 8
9 SOURCES AFPA - American Forest and Paper Association 1992 Statistics of Paper, Paperboard & Wood Pulp, data through FAL/RAC - '!Evaluation of Proposed New Recycled Paper Standards and Definitions'!, Franklin Associates, Ltd., January 27, 1992 for the Recycling Advisory Council's (RAC) Final Report on Recycled Paper, February 6, NOTES a. AFPA US production data in 000 short tons b. plausible percentage of Recovered Paper (RP) selected c. Yield Factor = 1/FAL yield factor developed for RAC Example: P&W FAL yield = 70%; 1/.70 = 1.43 d. plausible though higher than current percentage of industry participation selected e. Total Recovered Paper (RP) used = (a) (b) (c) (d) f. based on FAL RAC Table A-1; PC generation = 81.2% new supply PostConsumer generation = 81.2% (24,651) 1991 new supply g. Preconsumer generation = per FAL/RAC Table A new supply 1991 production data by product were not available to analyst (for comparison, AFPA 1991 new P&W supply = 24,651) 1990 P&W new supply = 25,067 converting scrap = 12.4% - net consumption = 21,959 overissue = 5.2% net consumption = total preconsumer = 3, 108 1,142 4, Magazines (part of P&W total) new supply 3, 343 converting scrap = 12% 401 net consumption = 2, 942 overissue = 20% net consumption = 588 total preconsumer magazines = In-plant P&W scrap generation 1,471-2,428 In-Plant Tissue scrap generation (NOTE: amount of double counting between in-plant estimates and FAL converting scrap calculations is unknown; FAL computed inplant and out-of-plant converting together) h. 30% Mags = magazines (a P&W grade) used to deink newsprint i. NA - Not Applicable 9
10 Y
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