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Flexo Sustainable : Fall 2014
The Current State of The Sustainable Paper Packaging Market Paper packaging is the largest sector of the recycled materials market, accounting for roughly 65 percent. Excluding glass in some speci c countries, paper and paperboard also have the highest recycling rates worldwide. Demand for paper packaging will continue to grow, due to the manufacturing economies of China and other emerging countries. In fact, the overall market for recycled paper packaging will grow at a compound annual growth rate (CAGR) of 5 percent to reach $139 billion in 2018. e paper packaging market is examined in detail in Smithers Pira's e Future of Sustainable Packaging to 2018. GEOGRAPHIC FORECASTS In the U.S. and Canada, paper and paperboard recovery has increased by 81 percent since 1990, and has reached a recycling rate of 70 per- cent in the U.S. and 80 percent in Canada. European countries have reached an average of 75 percent for recycling paper, with some coun- tries like Belgium and Austria achieving almost 90 percent recovery. In the U.K. and many other countries in Western Europe, the paper recycling rate is 80 percent. Eastern Europe and the rest of the world tend to lag behind in paper recycling, mainly due to a lack of adequate recycling infrastructure. Recovered paper accounts for 37 percent of the U.S. pulp supply. e demand for paper pulp is growing rapidly in developing countries; China, India and the rest of Asia are the fastest growing users of paper per capita. e increase in the transit packaging sector in China, combined with growing consumerism, is leading to rapidly growing demand for paper packaging. Paper packaging demand has been growing at a rate of 6.5 percent since 2008, far higher than anywhere else in the world. Along with this demand for paper packaging, the demand for recycled paper is also increasing. Containerboard packaging represents the largest market for recycled paper packaging. About 30 percent of the paper and paperboard recovered in the U.S. is used to produce containerboard, which is the material used for corrugated packaging. A large amount of recovered paperboard is exported to China, while the rest is used to produce other paper packaging such as boxboard, which includes folding boxes. In 2011, exports of recovered paper to China and other countries account- ed for 42 percent of the paper collected in the U.S. for recycling. WHAT'S NEXT? It is estimated that the demand for recycled paper will exceed supply by 1.5 million tons of recycled pulp per year by 2018. e paper in- dustry is investing in paper packaging plants in the developing world to satisfy growing demand in these regions. In the future, paper packaging is the most obvious choice for replacing polystyrene. Many key players in the industry have already switched to, or are experimenting with, paper products. For example, Star- bucks uses only paper cups and is actively involved in paper recycling initiatives, including closed loop systems in select locations. Further improvements in paper recycling will also help to grow the market, as recent advances have made it possible to recycle coated paper packag- ing along with corrugated paper. is will reduce the cost of recycling signi cantly, driving up the demand for recycled paper. THE FOOD SERVICE INDUSTRY One of the fastest growing markets for recycled paper is the food service market. Although it represents a small percentage of the overall market for recycled paper (<1 percent), it is expected to grow faster than overall demand for recycled paper packaging. With the economy improving, the food service market will start to see more growth at, combined with increasing consumer awareness of litter and solid waste caused by discarded plates and glasses, will drive the demand for recycled paper. Industry players are also getting active in this market, as pressure from governments and various environmental groups keeps increasing. To nd out more about the sustainable paper packaging market, download Smithers Pira's report, e Future of Sustainable Packaging to 2018. " About 30 percent of the paper and paperboard recovered in the U.S. is used to produce containerboard, which is the material used for corrugated packaging." FALL 2014 | Sustainable FLEXO 3