Testimony before the U.S. Senate Committee on Environment and Public Works
July 11, 2002
Hearing on the Progress of National Recycling Efforts
Mr. Fred von Zuben, Chief Executive Officer
The Newark Group
On behalf of
The American Forest & Paper Association
Mr. Chairman, and members of the Committee, my name is Fred von Zuben and I am pleased to have this opportunity to present the views of the American Forest & Paper Association on a subject of critical importance to our industry: recycling. I am CEO of The Newark Group, Inc., a 100% recycled paperboard manufacturing company headquartered in Newark, New Jersey. My company has over 100 years of experience manufacturing recycled paper products, and I am pleased to lead a committee of CEO’s in the industry focused on issues related to recycling and recovered fiber.
The American Forest & Paper Association (AF&PA) is the national trade association representing more than 240 member companies and related associations that engage in or represent the manufacturers of pulp, paper, paperboard, and wood products. America’s forest and paper industry ranges from paper mills employing thousands of workers to family-owned sawmills and millions of woodlot owners. More than 80 percent of our manufacturing members from the smallest to the largest producer rely to some extent on recovered paper as a raw material.
Over the past two decades recovered fiber became an integral component of the paper industry. Capital investment, raw material sourcing, and product design decisions now often include consideration of the use of recovered fiber and greater recycled content. For companies such as mine, this is not a new idea, but for others in different segments of the industry, the greater reliance on recovered fiber came about more recently.
In the 1980’s, we saw a great increase in the public’s interest in recycling and a willingness to participate in collection programs spawned by concerns over possible landfill shortages and the media coverage given the “garbage barge” looking for a home for urban solid waste. In very short order cities across the country put in place residential curbside collection programs and offices sorted out the valuable white papers for sale to our mills.
AF&PA responded to pressures from the public and elected officials to increase our use of these recovered materials. In the early 1990’s our industry pledged to recover for recycling 40% of all U.S. paper produced. This was an unprecedented goal and as you might imagine many – including some in our own industry – were skeptical of our ability to meet such a goal. But we did meet it – as billions of capital dollars went into upgrades of our facilities and building of brand new mills. We institutionalized the market for clean, sorted papers coming from residential and commercial users across the U.S. Our recovery goal is now 50% and we expect to meet that level within the next few years.
As the Committee considers the progress of national recycling efforts we believe you will agree that the paper industry represents an outstanding success story. According to EPA statistics, more paper is recovered in the U.S. for recycling than all other materials combined. Paper recovery increased 97% since 1987 when the recovery rate was 28.8%. For specific product categories such as newsprint and corrugated containers the numbers are unprecedented: 78% and 75% recovery levels respectively. (As you may have experienced, finding an empty cardboard box behind a grocery store has become much more challenging as our customers invest in profitable baling and recovery operations.) Printing and writing papers – often scarce in curbside programs have climbed to over 42% recovery due to the greater diligence of commercial establishments and office buildings. So far this has worked, but a crisis is looming. (See Attachment 1, “Recovered Paper Statistical Highlights 2002 Edition”) Perhaps even more significant than the increase in the recovery rate is the increase in the domestic utilization rate for recovered fiber, which now accounts for almost 38% of the industry’s raw material supply.
Our expectations of an increasingly constrained recovered paper fiber supply were confirmed recently in a study prepared for AF&PA by Franklin Associates Ltd., a U.S. consulting firm with years of experience analyzing domestic recovered paper markets, and EU Consulting, located in Starnberg, Germany, and known for its expertise in global paper recycling trends. The report concluded that domestic paper mill demand for recovered paper will be squeezed in coming years by an anticipated 50% surge in U.S. exports of recovered paper, with much of the incremental demand coming from China. The two largest recovered paper grades – news and old corrugated – are expected to be in particularly tight supply in the 2004-2006 time period. The report calls for collecting as much news and corrugated as is economically and logistically feasible and collecting more mixed papers from homes and offices to fill the anticipated gap.
As domestic and export demand for U.S. recovered fiber continue to grow, we run the risk of seeing existing recycled paper and paperboard capacity idled due to insufficient fiber availability. Our industry looks to recovered paper as a valuable raw material, not as a garbage or waste problem to be dealt with. As recyclers we continually fight against programs which would give financial incentives to those who would use paper as a fuel source, or municipal waste managers who would deny us access to recovered paper in their communities.
Misguided federal procurement policies exacerbate our recovered fiber supply. I have heard many calls for raising the content requirement for federally purchased copy paper from 30% to 40%. This is a simplistic idea that may in fact hurt more than it helps, as it may increase the demand for recovered fibers currently going into other recycled products, like tissue or paperboard, without leading to a corresponding increase in recovery. Currently, 42% of Printing/Writing papers are recovered, but 35% of that is exported, almost 25% is used for tissue and an additional 21% is used in recycled paperboard. The unobstructed flow of recovered fiber into the products in which it can be most efficiently utilized will help, rather than hurt recycling in the long run by allowing it to continue to develop in a cost-effective manner.
As our industry faces potential supply shortages for recovered paper the Federal government should rethink its artificial preference for so called “post-consumer” paper. Arbitrary definitions and recycled content percentages, based on the source of the recovered fiber, force recovered fiber into specific products and ignores underlying economics and technological constraints.
It is important to note that the RCRA requirements that underlie the Federal procurement guidelines were designed to create a market for the materials that were being collected in recycling programs. Today, 96 percent of all paper being collected for recycling is being used to make new paper and paperboard products. The rest is used in other applications, such as insulation, animal bedding, composting, and molded pulp such as egg cartons.
Our industry worked closely with EPA in developing the existing paper procurement guidelines. As a 100-year old recycler, a company such as mine stands to lose if the government arbitrarily raises the content guidelines for certain types of paper, like copy paper without an adequate supply of recovered fiber available in the market.
Mr. Chairman, in response to the Committee’s request for input on federal procurement of recycled-content products, we would like to point to the fact that paper products have received more attention in this area than any other product. This, I might say, is a testament to the great utility of paper, which we use to disseminate information and knowledge in the form of newspapers and books, as consumer goods packaging, transport packaging, as tissue and untold other uses.
Federal procurement guidelines for paper products were first developed in 1988, pursuant to RCRA Section 6002. Those guidelines identified numerous categories of paper products along with targeted recycled content rates. The EPA guidelines for paper products were updated in 1996, pursuant to Executive Order 12873, which also set specific percentage goals for printing and writing papers. A subsequent Executive Order 13101, specifically required Executive Agencies to purchase printing and writing papers meeting a minimum recycled content of 30%. Currently 98% of copy paper procured by the federal government meets the 30% post consumer content requirement. Yet Federal procurement of Printing/Writing papers accounts for only 2% of the copier paper procurement in the United States.
Implementation of Executive Order 13101 has focused the Federal Government’s efforts to buy recycled largely on paper products. There are, perhaps, similar opportunities in other products and other material groups which should be pursued. The successes of the paper-recycling program could serve as a guide for success in other product areas.
Mr. Chairman, Members of the Committee, there are many reasons for the government to take the lead in promoting recycling. Leadership, however, means taking a leadership role on both sides of the equation, supply and demand. Without a doubt, purchasing managers should be more cognizant of what they buy, but at the same time building managers needs to be more cognizant about what they throw out and what they recycle.
Given the current state of paper recovery in the U.S., and unprecedented use of recycled fiber throughout our industry, we would offer the following recommendations for Federal Government actions in the area of paper recycling:
1. Enhance the mission of the Office of the Federal Environmental Executive (OFEE) to give greater emphasis to recovery of used paper. The federal government is a huge user of many high grade office papers as well as nearly every product grade manufactured by our industry. We understand that many federal facilities do not offer collection programs or actively encourage participation in those programs which exist. Agency procurement officials seeking to encourage recycling through purchase of higher content recycled products may be missing a much greater opportunity by allowing the massive amounts of office paper generated within the walls of their own buildings to go unclaimed. The OFEE would be well positioned to assist agencies in devising collections programs and monitoring the progress of those agencies.
2. Work to improve paper recycling in federal buildings and encourage local officials to continue effective collection and sorting programs for municipal solid waste processing. As the Committee will undoubtedly be hearing today, local budget constraints are leading to the elimination of many curbside programs. Fortunately, paper recovery is often maintained due to the greater economic sustainability, and even profitability of paper – primarily due to the investments our industry has made in recycled paper manufacturing and processing (see above).
Our industry was a proud forerunner in building the recycling infrastructure starting with Boy Scout and church paper drives. As cities and counties have taken over these programs it is critical that they maintain a reliable, uninterrupted, and clean flow of recovered materials. Our industry invested billions of dollars to meet the demand for recycled content products on the assumptions that these private and municipal collection programs would continue as a reliable source of raw material.
Mr. Chairman, on behalf of the members of the American Forest & Paper Association, I appreciate this opportunity to appear before the Committee today. As you see from our statement, the paper industry is proud of its record on recycling and the recovery of paper from the waste stream. Use of recovered fiber is not on the periphery of our industry – it is a vital component of our economic health and well-being. We look forward to working with you and members of the Committee as you evaluate federal policies which will encourage ever-increasing paper recovery in the U.S.
1. “Recovered Paper Statistical Highlights 2002 Edition”
2. Executive Summary of Franklin Associates and EU Consulting Study conducted for American Forest & Paper Association.