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Is The Recycled Paper Industry Going Extinct?

Greenies_0711For years environmental advocates have encouraged consumers to seek out recycled paper and packaging as a way to curtail their impact on the environment. Many consumers, increasingly concerned about climate change and their personal carbon footprint, have switched to online publications and billing, or opted out of paper communication simply because they don't want to contribute to excessive paper waste or forest destruction.

These behavioral changes have gained the attention of major publishers, many of whom have made a concerted effort to incorporate post-consumer recycled paper into their printing processes. Despite this apparent increase in demand, two major paper recycling mills in the Pacific Northwest have gone belly up since the beginning of 2011.

Both Blue Heron Paper Company and Gray's Harbor Paper recently announced that they were taking steps to permanently close their facilities. In press release announcements, both mills cited the continued high price of raw recycled materials and lower than expected sales as reasons for the closure.

Foreign Mills Benefit from Subsidies and Cheap Labor

"All the paper products we manufacture use a high percentage of recycled fiber in them," said Blue Heron president Mike Siebers. "Mills like Blue Heron are where the actual recycling of the collected waste paper you set out at the curb takes place. But China and other countries have developed an insatiable appetite for recycled fiber to support their own paper plants which are then subsidized by their parent countries in other ways to maintain their jobs. This allows them to drive up the price for waste paper to unsustainable high levels for periods of time, giving them an unfair advantage over companies like ours," said Siebers.

Reports dating as far back as 2005 confirm Siebers' claim, finding that "U.S. scrap paper often ends up in the new Nine Dragons recycled paper mill -- the world's largest -- in Dongguan, China, north of Hong Kong. Workers there are paid about $3.40 a day to sort mixed paper by hand -- far less than American workers, who are paid at least the $5.15 per hour minimum wage" (Treehugger).

Demand for Imports Drives Prices Up

It is thought that demand for new paper products, both print materials and packaging, is ultimately at the root of this shift. Because Asian countries have such tremendous buying power, they are able to influence export rates in their favor to meet their massive manufacturing needs.

As American Recycler points out, much of the recycled material shipped to Asia eventually comes back to the U.S. in the form of packaging for products they export to us. So in a way, our own demand for imported products is at the root of the problem.

Even companies with a unique and cost-effective strategy for collecting post-consumer paper waste are feeling the pinch.

FutureMark is an environmental paper manufacturer based in Chicago that quickly developed a national reputation as the only company in North America capable of manufacturing up to 100 percent recycled coated mechanical printing paper (i.e. the glossy stuff). Unlike other paper recycling companies, which must purchase the raw fiber before milling it into paper, FutureMark harvests the urban forest: dumpsters, shredders and recycling bins all over the Chicago area. Even with this low-cost approach to sourcing, FutureMark recently announced that it was raising its prices, a move that doesn't bode well for its cash-strapped customers.

American Workers Feel the Pinch

A recent article in Paper and Pulp International highlights the problems that are driving recycled content overseas, along with the jobs that it used to provide for American workers. According to Jon Geenan, a vice president of the United Steelworkers union representing the paper sector, there is something fundamentally wrong with a system that makes shipping recovered paper from Portland, OR, to Asia cheaper than trucking it to Seattle, WA, which is only about 170 miles away.

Second, Geenan states that the foundation of any economy is its ability to make things. If the U.S. doesn't focus on the competitiveness of the manufacturing sector, including paper, there will be a "long-term hangover for the economy." Geenan told P&P that the USW is currently in a fact-finding phase concerning this issue, and will be looking at potential legal remedies concerning the recovered paper trade. "More U.S. factories will be shut if we don't do something," he said.

Prologue

Shortly before the Natural Choice Directory went to press, our paper supplier notified us that the Blue Heron paper mill had gone out of business, leaving us without a supply of recycled paper. Happily, we found a supplier of paper made from 100% post-consumer fiber, and retained our 18-year track record of publishing on recycled paper. Unfortunately, we had to sacrifice the quality of the paper, creating a thinner, flimsier edition of the Directory than we would have liked.

The closure of the Blue Heron mill forced us to confront an economic reality that faces any "green business" today: environmentally responsible businesses must confront the age old forces of the market that businesses have always had to face. And there is no guarantee that one's business will survive, regardless of effort, funding, or good intentions.

Nevertheless, another economic reality gives us reason for a positive outlook: with change comes opportunity. And despite the current recession, foreign competition, and wide-spread opposition to policies that would promote environmentally sustainable business practices, the "green economy" continues to grow.