RECYCLING: Recycled Paper Demand Outstrips Supply

Policies and investments have continued to transform the North American newsprint industry from virgin-based paper to recycled content paper, according to a report released by the Council of State Governments' Northeast Recycling Council (NERC), Lexington, Ky.

In response to the growing demand, newsprint recyclers have already invested approximately $1 billion and plan to build at least three new deinking mills in the northeast.

Between 1989 and 1994, historically low market prices were offered for recycled newspapers. So, NERC and eight of its member states initiated discussions with the region's newspaper publishers. As a result, goals were set to increase publishers' purchasing levels of recycled content newsprint through the year 2000. This guaranteed long-term demand reportedly will enable manufacturers to confidently invest in new deinking systems.

In 1988, before publisher commitments, there were nine facilities in North America capable of deinking and converting fiber into newsprint. Today, more than three dozen facilities are in operation.

In fact, the deinking of old newspapers (ONP) and old magazines (OMG) to produce newsprint has increased more than 400 percent since 1988. The report suggested that for investments of this scale to continue, the infrastructure that recovers, processes and delivers quality wastepaper to markets must expand and adapt to the in-creasing demands.

In addition, newspaper publishers' commitments to buy recycled content newsprint must continue in order to allay the fears of mill owners. This concern reportedly has caused reluctance in some mills who've considered deinking system investments. Recently, investment levels have dropped due to these concerns, but are expected to stabilize, according to the report.

Publishers have met and often have exceeded their purchasing goals through 1994 despite the "tight market for finished news-print." This caused difficulty for some publishers during the past two years, who were trying to meet their recycled-content newsprint buying goals, the report states.

Nevertheless, a return to a more stable relationship between news-print supply and demand are exhibited by a leveling in the producer price whose increases nearly doubled newsprint between 1994 and 1995.

Publishers should be able to continue purchasing the preferred recycled content newsprint because of the increasing price stability, and deinking mills will continue to expand to accommodate both the ONP and OMG supply along with publisher's demands, the report concludes.

The current recycled newsprint in Eastern North America is 28 percent. Assuming that the three deinking planned projects are completed by 1998, newsprint's recycled fiber produced in the region could increase to 32 percent.

Nationwide, the American Forest & Paper Association, Washington, D.C., estimates 36 percent of ONP is used to make newsprint. This means approximately six out of every 10 newspapers are recovered, creating 8.1 million tons of ONP.

The industry demand for OMG and ONP is approximately 693,000 to 2.38 million tons per year (tpy). Along with the new projects, the demand for OMG and ONP from newsprint manufacturers will increase to between 926,000 tpy and 2.92 million tpy respectively, the report said (see chart).

In most states, publishers have set 1997 purchasing goals for recycled newsprint at 31 percent. However, since no additional deinking facilities are planned for this period, the publishers' goal will remain above the 28 percent estimated newsprint availability.

This could make it more difficult for publishers to purchase higher levels of recycled content newsprint. Based upon these limitations, the report predicts that purchasing goals set through 2000 will follow this trend due to recycled content news-print's suspected "lower aggregate availability."

These potential problems are not for lack of paper, but rather a shortage of capable deinking and processing facilities. For every ton of deinked pulp produced, 1.2 tons of wastepaper will be required. However, according to the report, there is plenty of paper available for recovery and both ONP and OMG can be used to fill the demand.

As of 1994, the recovery rate for ONP was 1,725,440 tons, according to the NERC. Given increased efforts in states with recovery rates below 70 percent, the region's rate could be raised by about 250,000 tons. Unrecovered ONP is greatest in Massachusetts, New Jersey, New York and Pennsylvania.

While estimated OMG generation in the council's states for 1994 was 948,260 tons, it is difficult to estimate OMG's total collection rate because its collection typically is not reported separately, but rather is collected with ONP or with mixed papers. It is known that OMG's potential recovery rate is even higher than ONP. However, because it would involve some mixed-paper sorting, the recovery would be more arduous, the report said.

The current wastepaper breakdown at most deinking lines is 70 percent ONP; 30 percent OMG.

For more information or to obtain a copy of Northeast Publishers' Commitments to Purchase News-print: 1996 Status Report (C070-9500) and Old Newspaper and Old Magazine Supply in the Northeast (C144-9600), contact: The Council of State Governments, 3560 Iron Works Pike, P.O. Box 11910, Lex-ington, Ky. 40578-1910. (800) 800-1910.