At times more than half of the paper production within China has come from recycled materials derived from foreign paper products. Currently, the problem is that shifting to use domestically produced waste paper is not as easy as it sounds. Sorting policies are lacking, and the quality is often low, particularly since much of the paper has come from recycled products in the first place.
This comes at a time when domestic waste is also growing, due to a rapid increase in consumption led by the ease and convenience of online shopping in China. The most recent Singles Day shopping holiday on November 11th witnessed a 25 per cent increase in the amount of parcels sent in the 10 days following the event over the year before. Landfills are approaching capacity and incineration units cannot be built fast enough. A growing environmental awareness means both options are increasingly frowned upon by the public.
While the paper recycling industry is transforming to treat more domestic waste paper, the transition period is presenting opportunities for companies to supply sustainable, quality pulp to paper companies, particularly when it comes to food packaging.
“In the case of paper packaging, companies are definitely willing to use fresh forest fibre pulp for packaging because of food safety and other issues,” says Tang Yanju, Secretary General of the Recovered Paper Branch of the China Recycling Resource Association. “This is the trend, theoretically, but we don’t yet know how much demand will be triggered. There is no data to study this yet.”
Technically recycled paper cannot be used for food packaging, but this is underregulated beyond first and second tier cities.
Demand for certified pulp could increase with more enforcement
There is an increasing need for inspected pulp in China that meets food contact standards, as well as forest certified paper products exported into foreign markets according to Zhang Tao, Customer Service Manager with Metsä Fibre in Shanghai.
“It is getting more popular as some customers need more certified pulp for exported products, though it is still not as strict for domestic paper,” Zhang says. “Food contact certificates are needed, and this is increasing demand for paper that comes into contact or is used to wrap food, like at McDonalds or KFC.”
Demand from some companies is outpacing supply in certain cases for particular certifications, according to Zhang, but the company has more than enough certified pulp available.
“Metsä Fibre has enough pulp for customers, and all of our pulp could be certified under the existing standards,” Zhang notes.
Zhang explains that each year the company sends samples to the National Paper Quality Supervision and Inspection Center, where they are checked for traces of microorganisms, heavy metals, fluorescent substances, formaldehyde, arsenic, lead, odours, dirt and other contaminants.
While food contact standards are in place, they are mostly followed by large food chain companies. It would likely take increased government enforcement of the standards outside of major urban centres, such as Beijing, Shanghai and Shenzhen, to really drive a stronger market for pulp of that quality.
Challenges of industry consolidation
China’s paper recycling industry is also presented with challenges regarding the handling of domestic waste, now that foreign streams for waste paper are increasingly being cut off with a full ban of imported waste paper expected by 2020. Increased enforcement of environmental protection standards have led to the closing of smaller, dirtier operations that were not complying with regulations. This has advanced the consolidation of larger, but leaner and greener recycling operations.
Tang said that the next two years will be important as waste paper sorting centres become standardised with the government moving to tackle the increasing amount of residential waste being generated.
“Last year, there were more than ten thousand waste paper collecting companies in China, and less than a thousand of these are of a larger size,” says Tang of the operators collecting and baling the paper into cubes before sending them on to pulp mills.
“The future is definitely centralised, and large companies have a higher market share, which is very helpful for stabilising the market price of waste paper. These companies will establish their own front-end channels and continue to build into the streams from residential communities to control the price and quality of front-end procurement. The quality of waste paper has been improving very fast in the past two years,” Tang adds.
The need for quality, teaching sustainability
China is also presented with challenges in that it does not have many of its own domestic pulp makers and forests have become managed much more strictly in the past few years. So, pulp is either coming from softwood and hardwood sources outside of the country, or from recycled sources. That also presents challenges and opportunities, according to Zhang:
“With some recycled fibre, the quality is not so good, and the fibres weaken after several uses. Most of our customers are using high speed machines and they need a fresh fibre with good strength that they can’t get from recycled fibre.”
Another big issue is communicating the idea of sustainability. As pulp suppliers, recyclers and papermakers consolidate into larger companies, the message is slowly getting across.
“Local environmental protection departments are now training these companies, telling them what they can and can’t do,” Tang says. “This is increasing the need for employees handling environmental management and other outside verifiers that can help those companies ensure they’re meeting environmental protection standards,” she adds.
Zhang agrees, saying that know-how developed by Metsä Fibre at its facilities in Finland, and with partners worldwide, should be shared more readily.
“We need to share the message or organise more seminars with customers to explain our ideas of sustainability,” Zhang says. “We need to spread this knowledge to customers in China. People are getting richer, the middle class is growing, and they want something more sustainable, they want to take responsibility for society and the planet.”