A European panorama: the European collection scenario has one paper recycler believing that supplying recovered fiber globally will not be problematic

Recycling Today, Sept, 2004 by Henri Vermeulen

In light of the new Asian and European demand for recovered fiber, the question is already on the table: Is it possible to find enough recovered paper to meet all this demand? To give you a clear answer from my perspective, I think it is possible.

From a European perspective, we think the challenge will be manageable, but we need to do a lot of things in order for that to happen.

SCIENCE & STATISTICS. Just to give you something to think about, science says that the bumblebee's wings are too small to fly. But, the bumblebee flies. There is a lot of science, a lot of proof given in words that it is impossible for him to fly because his wings are too small. But science and statistics are not always proven to be true in reality. Fortunately, the bumblebee doesn't understand science, so he flies.

The same is true about the statistics and science presented in relation to the paper recycling industry from 1990 to 1992, especially in Europe. At that time, new packaging waste legislation was being introduced in all of Europe, but there was a concentrated focus in Germany. The Topfer Decree of 1992 triggered the legislation. In light of this legislation, a lot of extra collection was needed, and everyone expected that it would lead to a surplus of inexpensive recovered paper supply in Europe until 2000.

I can remember those days. At that time, I was working for a waste management company responsible for selling recovered paper. In our management strategy, we went to paper mills and offered them huge tonnages close to 1 million tonnes--for five to 10 years with a price of $0, delivered at the mill. Fortunately for everybody, nobody signed those contracts.

All the science was clear: Throughout the 10 years following the legislation, there would be a surplus of recovered paper available at much lower prices. But what actually happened? In the first two or three years in Germany, specifically, and in Europe, generally, this scenario was completely right, even when the dip in '94 is considered. But afterward, the scenario was not valid anymore because everyone had seen the larger picture.

You can have a lot of statistics and a lot of science, but the market will exert its own forces to play on that. That is what happened in the years 1990 up until now. Although all major statistics forecasts were flat and low for the period 1990 to 2002, there was a big peak from 1994 to 1995.

Now, the forecasts indicate that China will eat everyone's recovered paper in the future, but what will be the true impact of all this new capacity?

I do not think that China will eat everyone's recovered paper. Why not? European developments are very rapid. Collection is increasing already, especially in the United Kingdom, France, Italy and Spain.

Also, collection is increasing in the Eastern European countries. Initially, collection developments in these countries were quite low, with collection rates not above 30 percent. In this region, collection is really speeding up. Kappa Packaging h as a lot of facilities in Eastern Europe. We find that developments in this region are very good and that rates are growing rely rapidly.

EUROPEAN EVOLUTION. Paper recovery in CEPI (Confederation of European Paper Industries) countries is growing relative to recovered paper consumption ill these countries. That means that in Europe there is all overshoot of recovered paper that is still increasing.

A lot of people think recovery is going down, but when you take the whole of Europe, the overshot in recovered paper in Europe is growing. At the moment, I think we are at 3 million tonnes of recovered paper. That amounts to more paper collected in Europe than is finally consumed in Europe.

Although these numbers are not as high for North America, the same thing is happening there, where there is also clearly more collection than consumption of recovered paper. That is, of course, a crucial thing, because when there is more collection than consumption, at least the fiber is available. And that is the key point.

The evolution of recovered paper collection and collection rates in CEPI countries show that collection rates in Europe are still increasing. We are approaching the 60 percent level, and the amount of recovered paper is clearly growing. We are coming from 25 million tones of recovered paper collected in '90-'91 and we are now reaching levels of between 50 and 60 million tonnes, so it has clearly doubled. And the thinking is that this development will continue.

In terms of individual European countries, the following applies. In the United Kingdom, there was an overshoot of recovered paper collected ill 2001 relative to the amount of paper consumed. And if you look at the developments in the United Kingdom throughout the last three years, it's tremendous. According to the figures available for 2003, there is an overshoot of close to 2 million tones of recovered paper in the United Kingdom.

It is very interesting how that developed. I can remember operating a recycling business in '96 and '97. We were still exporting volumes of paper from Germany to the United Kingdom because there was a shortage of volume there. So you can see what tremendous collection developments there have been in the last few years.