Paper industry’s future is in waste-to-energy business
Recycling is a centuries-old skill. Still a third of the paper we use lives only once and ends up on landfills. Recycling waste is a global business of which recovered paper makes up a significant part. Bales of recovered paper alone are bought and sold yearly with 20 billion euros worldwide. As a third of potentially recyclable paper is lost among other waste, the market still stands to grow.
Recycled fibre is already the most important raw material of the paper industry, and it will be utilised even more in the future. A steady growth is not to be taken for granted though.
– The supply of recycled fibre becomes limited as collection and sorting of it gets harder and harder, and thus its price will increase. Optimising between paper recycling and waste-to-energy operation is likely to become more common. Paper mills will be frontrunners in this development, argues Petri Ristola in his recent dissertation for Aalto University Department of Industrial Engineering and Management.
Paper mills utilising recycled fibre have prime prospects to participate in the waste management business. Handling the waste, and utilising it as energy, will make paper mills self-sufficient, cut down their expenses and improve energy efficiency – and above all, make profit.
– The times of cheap recycled fibre are over. Because burning recycled fuel is so profitable for paper mills, and as the material burned contains waste paper as well, a connection will emerge between the two markets, predicts Ristola.
The markets in 2020
Combining economics and future studies, Ristola has created scenarios about the common future of waste-to-energy operations and the recycled fibre market. He created a model with which to analyse the effects of supply and demand chains in three different markets: in recycled fibre, utilising waste as energy, and waste disposal.
The different scenarios are the result of combining the composite market model and knowledge derived from a Delphi study popular within future studies. Ristola consulted a panel of experts in the paper industry, in paper recycling, waste management and in waste-to-energy operation about the future issues and developments in the recycled fibre market and its connection to the waste-to-energy market.
– By the year 2020, the domestic European demand for recycled fibre will increase only mildly. Crucial will be the development of the recycled fuel market and the rising price of recycled fuel. The panel still remained confident that the market for recycled fibre will hold up against the fuel market, sums up Ristola his conclusions.
– For the panel’s prediction to hold, my model requires the price of mixed waste paper to rise from the current 100 euros to 150 per ton. This increase means that the market for recovered paper in Europe will be based on exports to an even greater extent than before.
Paper industry to recycle waste flows
In Europe, the paper industry is investing heavily on power plants using biomass and waste fuels. Paper mills will also begin to integrate vertically and create business in their neighbouring fields. Because entering waste management business opens up new strategies to source both raw material and fuel, also collecting and handling, for instance plastic, glass or metals, may very well become a major part of the paper industry. In the future paper mills might even be able to make ethanol out of otherwise useless waste flows.
– Paper mills utilising recycled fibre can create new business ventures in waste recycling. It of course takes considerable courage from paper companies to step outside their comfort zones.
petri.ristola [at] aalto [dot] fi
tel. +35 840 537 3798