Packaging manufacturers say prices for recycled fiber and pulp will go north and supplies will go south if the U.S. Environmental Protection Agency goes ahead with tough revisions to the 1988 federal procurement guidelines for recycled paper and packaging. The guidelines are only advisory, and only apply to federal buyers. But companies such as International Paper, Union Camp and Mead, to name a few, predict that revisions proposed by the EPA in March 1995 will stimulate demand for already short supplies of old corrugated containers (OCC), launching already stratospheric prices into the ionosphere (see pricing survey, p. 62). On the other hand, the same companies seem to be pleading for at least some remnant of guidelines as a way to prop up minimal demand for recycled content. That is important because many of the companies have spent many millions of dollars in the past few years to modify mills to handle recycled OCC and other materials. The key, but by no means the only, point of contention is whether the EPA should keep a post-consumer content guideline for essentially two packaging categories, or go to a two-tier guideline for eight categories. There would be floor percentages of recovered fiber and post-consumer fiber. The numbers in these two categories would generally be more difficult to satisfy than those in the current guidelines. "Mead strongly opposes the concept of government-imposed recycled content requirements-a position which is validated by the current paper market," says Ronald Budzik, vice president for international and government affairs at Mead (Dayton, OH). "However, absent future amendment, compliance with the existing Resource Conservation and Recovery Act (RCRA) is not an option, but a responsibility." Of course the EPA guidelines do not mandate anything; they recommend, and then only to federal procurement officials. Nonetheless, Mead's strong opposition to the proposed 1995 revision, echoed by others, has rattled the EPA, forcing the agency to seriously consider retreating. Dana Arnold, the EPA official responsible for the guidelines, says, "When we published these proposed revisions, we asked industry to tell us whether our numbers were feasible. We got a lot of responses back saying 'No, they are not.'" She says it is likely that the EPA will stay with some version of the 1988 guidelines, which she describes as "maintenance-oriented"-as in maintaining the current situation-as opposed to the proposed "incentive" guidelines in the March 1995 proposed revision. Eliminate guides? Some manufacturers want EPA to eliminate the guidelines, period. "The PPC believes that it is time for EPA to declare victory in its effort to foster a healthy and growing recovered paper market, and to confine its future role to one of encouraging continued progress through public education and financial support of expanded collection programs," states John McIntyre, president of the Paperboard Packaging Council. "There would have to be an extremely compelling set of circumstances before we would do that," Arnold replies. But Mead and some other companies want some semblance of guidelines to remain. They have made expensive capital improvements to mills and don't want demand for their recovered materials packaging to disappear, which might happen if EPA signalled government buyers to "go slower" on purchasing recycled-content packaging. Riverwood Inter-national (Atlanta, GA) spent $21 million to expand recycled fiber capacity over the last three years at two domestic paper mills, and is using approximately 300ꯠ tons of post-consumer fiber per year. Riverwood actually is happy that the 1995 revision includes a category for carrierboard. The company makes Aqua-Kote® for beverage containers. "We believe that listing carrierboard will help clarify the confusion which resulted from the mis-characterization of the 'recycled paperboard' category in the 1988 document," says Robert Hart, senior vice president for the paperboard operations group at Riverwood. '88 guidelines revisited Those 1988 guidelines divide packaging into two categories, unbleached packaging and recycled paperboard. Within the first category, post-consumer content recommendations are made for corrugated boxes (35%), fiber boxes (35%) and brown paper (5%). The second group includes recycled products including folding cartons (80%) and pad backing (90%). Those 1988 guidelines stemmed from RCRA's admonition to the EPA to "foster markets for recovered materials." Paper producers feel the guidelines have worked splendidly. In 1994, for example, 40% of all paper and paperboard used in the U.S. was recovered for recycling. Currently about six out of 10 corrugated containers are being recovered. In fact, Terry Serie, vice president of the Containerboard & Kraft Paper Group of the American Forest & Paper Association (AFPA), points out that 71% of all OCC will have to be recovered to supply fiber needs in 1997. That is because U.S. containerboard makers currently plan to add over 4 million tons of additional linerboard and medium capacity during the 1995-1997 period. Most of that production will use 100% recovered fibers. Yet acccording to a study by Franklin Associates, the maximum achievable recovery rate for OCC is 66-72%. Recycled fiber limits OCC prices have been climbing since 1992. Bob Barakat, manager of recycling programs for International Paper (Memphis, TN), says the sales price has gone from a range of $25 to $35 per ton to $210 to $230 per ton. End-users are now balking at prices. Buyers of packaging are backing off recycled OCC for reasons besides price, too. Paul Langenus, national sales manager for containerboard at International Paper, says his customers are much less interested in recycled OCC corrugated boxes than two years ago. "Strength and printability are reduced with recycled containerboard, and that is a problem for some customers, packers of fresh fruit for example," Langenus explains. It could also be a problem for discount retailers who stack corrugated boxes, and depend on well-designed and clearly-printed boxes to do the selling of the product. It is much less a problem when the box contains breakfast cereal or paper towels, for example. The revisions the EPA proposed in March 1995 change the 1988 guidelines considerably, and in industry's view, unrealistically. Packaging is divided into eight categories. The real change, though, is that there is a post-consumer fiber target and recovered fiber target for each category. The product must meet the post-consumer number. If the recovered fiber percentage for that category is above the post-consumer percentage, then the product must contain some pre-consumer material as well. "The proposed minimum content level of 40 percent for corrugated does not appear to be economically or logistically feasible," IP's Barakat states. Industry specs? Packaging manufacturers contend that the EPA guidelines will quickly become de facto private industry purchasing specifications. Dana Arnold, the EPA official in charge of this issue, unabashedly admits that that is exactly what the agency hopes for. However IP's Barakat admits that the 1988 guidelines have had much more of an impact on private buyer demand for recycled writing paper than on packaging. In fact, federal purchases of boxes are very small. Bob Streeter, deputy director of the division of office supplies and packaging procurement for the General Services Administration (GSA), the federal buying agency, estimates that he buys about $50 to $60 million of several hundred different styles of boxes annually. Besides a disastrous impact on packaging prices, the new guidelines would force manufacturers to change the materials they use in bags and boxes, and not with the end-user's needs in mind. "A box made to hold fruits or vegetables will necessarily require containerboard with different properties than one made to hold cans of soup," explains the AFPA's Serie. For example, multiwall paper sacks can only use small amounts of recycled fiber. The short fibers in OCC limit the papermaker's ability to develop sufficient tensile strength. On the other hand, retail and fast food bags can be made with high percentages of recovered fiber. Grocery bags have different requirements still. Yet the EPA's 1995 proposed guidelines puts those products in the same category: "brown papers." What's 'mill broke'? Another big issue is EPA's desire to expand the definition of "mill broke." This is the waste created after paper goes through the last winder/slitter on a paper machine. It cannot be included as either pre-consumer or post-consumer. The 1988 guidelines for writing paper include levels for post-consumer content and "waste" content. The latter category is essentially pre-consumer waste excluding mill broke. But the 1988 guidelines for packaging mentioned only post-consumer, so mill broke has not been a packaging content issue. Mill broke would become an issue for packaging under the 1995 revisions if the EPA sticks to its new two-tier guidelines. By expanding the mill broke definition, less pre-consumer waste generated by mills could be included in the recovered fiber category. This comes into play most prominently for folding cartons and industrial paperboard. The EPA wants to include some material generated during paper finishing operations in mill broke. Barakat of IP argues that these materials are equivalent to converting scrap and other materials clearly included in the definition of "recovered fiber." But it should be pointed out that at the same time it wants to expand the mill broke definition, the EPA is proposing to allow companies to count some mill broke dependent on the extent to which they used recycled feedstocks in their packaging. Pre- and post-consumer The debate over the definition of mill broke is just one of the tributaries in the rushing river of controversy over the definitions of recycled materials. Some in industry would like to see the EPA drop its distinction between pre- and post-consumer material. "Both recovered fiber and post-consumer fiber must be processed and de-inked in the same manner," says Budzik of Mead. "This would minimize the confusion over 'what counts' and drastically simplify accounting and reporting requirements." But in its March 1995 proposed revisions, the agency rejected that request, saying, "A single, post-consumer level fails to acknowledge the continuing contribution to solid waste management and the investments made by mills that have been using all recovered materials, regardless of source, that require de-inking, cleaning or processing prior to use." It remains to be seen if the EPA will stick with its total recovered materials standard, with two categories, one for post-consumer, the other recovered fiber. If it does, it will most certainly lower the numbers it suggested in March, making paper manufacturers happy. However, some companies very much want EPA to stick to its guns and keep its proposed two-tier definition. "We are gratified with EPA's inclusion of a recycled content standard for carrierboard that sets minimum recovered fiber content at a technically achievable level," says Riverwood's Hart. He would like to see the proposed carrierboard category have a separate listing for paperboard, with a total recovered fiber level of 100% while keeping other carrierboard products in the 15% to 25% recovered fiber range. The EPA proposed 25% to100% for all carrierboard. Hart explains, "The 100 percent level of recycled material represents only 2 percent of the carrierboard market, and is not a practical application for this guidance." Riverwood would also like to see a 10% to 15% range for post-consumer, instead of the 15% that's proposed by EPA. Probably the sole point the EPA and all segments of industry agree on is the agency's tentative decision not to set guidelines for either bleached or unbleached sulfate paperboard. Containers made from these materials are typically used in such applications as milk cartons and foodservice, folding cartons, and linerboard. IP's Barakat says much of solid bleached paperboard is used for direct food contact packaging for fatty and aqueous foods. The FDA strictly regulates those food contact uses. "These strict regulations make it difficult for companies to use post-consumer recycled content," he explains.
