old newspapers (onp)

OVERVIEWTraditionally, old newspapers (ONP) have been recoveredfrom the waste stream and used as feedstock for a varietyof recycled products, including newsprint, paperboard, tis-sue, containerboard, molded pulp, animal bedding, insula-tion, and as a bulking agent for compost. The most widelytraded grade of ONP is commonly called Number 8News.1 This grade commands the highest price because ithas the least contaminants relative to the other three gradesof ONP.2 It is also the most sought after grade of ONP forrecycled newsprint mills, the single largest end users of re-covered ONP.

The Institute of Scrap Recycling Industries defines No. 8News as �baled, sorted, fresh dry newspapers, not sun-burned, free from magazines, white blank, pressroom overissues, and paper other than news.� Total outthrows (i.e.,contaminants) in No. 8 News should not exceed one-fourthof one percent. 3

In 1997, more than 282,000 tons of newsprint were gen-erated in North Carolina. That year, North Carolinaachieved a 57 percent recovery rate for newsprint, whichis slightly above the national recovery rate of 54 percent. 4

Of the tonnage recovered, 121,000 tons, or 76 percent,were collected by local governments, while the privatesector accounted for the remaining 24 percent (38,000tons).

The American Forest and Paper Association (AF&PA) re-ported the amount of recovered ONP rose in 1997 dueto an increase in domestic mill consumption.5 This increasein domestic demand can be attributed to three factors: (1)the strong economy and the consequent demand for news-print advertisements, (2) increased recycled newsprint ca-pacity due to mill improvements in production efficiency,and (3) the underlying effect of state governments� mini-mum recycled content newsprint regulations.

Paper: Old NewspapersC O M M O D I T Y P R O F I L E

M A R K E T S A S S E S S M E N T 1998

North Carolina Department ofNorth Carolina Department ofNorth Carolina Department ofNorth Carolina Department ofNorth Carolina Department ofEnvironment and Natural ResourcesEnvironment and Natural ResourcesEnvironment and Natural ResourcesEnvironment and Natural ResourcesEnvironment and Natural Resources

DIVISION OF POLLUTION PREVENTIONAND ENVIRONMENTAL ASSISTANCE

Demand for ONP remains strong in North Carolina andthe Southeast region. Because of the presence of some ofthe largest newspaper mills in the nation, the region con-sumed almost 26 percent of the total domestic demandfor recovered newspapers in 1997.6

SUPPLY OF ONPGenerationAccording to EPA, the national generation of total ONP(domestic shipments plus imports) has been declining slowlyfrom 1993 to 1996.7 Because of the strong economy andadvertising climate, however, 1997 appears to representthe first increase in the generation of newsprint in four years.The AF&PA reported that 1997 was a record year for do-mestic newsprint shipments in the United States. After de-clining from 7.13 million tons in 1992 to 6.93 milliontons in 1996, United States newsprint shipments increasedto 7.25 million tons in 1997. According to the AF&PA, theincrease in newsprint shipments is primarily a result of theexpanding domestic demand driven by robust economictrends and the strong advertising atmosphere in 1997.8

Paralleling the increase in domestic shipments, imports arealso expected to increase in 1997. As a result, while EPAdata for 1997 are not yet available, the total generation ofONP, including imports, is expected to increase over the12.3 million tons generated in 1996.9

To calculate the supply of ONP in North Carolina, thegeneration of ONP was estimated as the combination ofpost consumer newsprint, overissue newspapers, and un-coated groundwood products such as newspaper insertsand coupons. The following section outlines two primarymethods of calculating the supply of ONP in North Caro-lina.

First, supply could be estimated using a per capita nationalaverage derived from EPA data.10 However, this aggregatemethodology results in a supply figure that does not ac-count for the differences in newspaper density and reader-ship levels between states with extremely large metropoli-tan areas versus less urbanized states. As a result, the aggre-gate approach overestimates the supply of ONP in NorthCarolina. Using this approach, the supply of ONP in NorthCarolina in 1997 would be 344,621 tons.

In contrast, supply could be estimated using North Caro-lina-specific data on the following factors: 1) unprinted news-print shipped to North Carolina, 2) out-of-state papers im-ported across the state line, and 3) inserts. This approachensures that the statewide supply of ONP reflects the dif-ferences in local newspaper circulation and paper densityacross the nation. For instance, states with large metro-politan areas, such as New York and California, have thickernewspapers and higher per capita newsprint consumptionthan more rural states, such as North Carolina. The AF&PAreports that 235,343 tons of unprinted newsprint wereshipped to North Carolina in 1997.11

According to industry experts, in 1989, groundwood in-serts comprised the equivalent of eight percent of the weightof the ONP supply. More recently, however, experts esti-mated that inserts have increased to roughly fifteen percentof the weight of ONP in 1997.12 To account for the addi-tion of groundwood inserts in the supply of ONP in NorthCarolina, the total figure for unprinted newsprint was in-creased by fifteen percent. Furthermore, to account for thenet imports of out-of-state newspapers (e.g. the New YorkTimes, the Washington Post), the supply of ONP was in-creased by an additional five percent. In summary, theunprinted newsprint figure was increased by 20 percent toaccount for inserts and imported newsprint. As illustratedin Figure 1, the total supply of ONP in NC in 1997 was282,412 tons.

Projections for the supply of ONP in 2002 are based onpopulation increases in North Carolina and assume thatthe per capita generation and recovery rates will remainconstant at 1997 levels.13 As a result, the projections mayunderestimate the actual ONP supply in 2002. Because ofprevailing of regional market dynamics in the newsprint in-dustry, the generation and recovery for North Carolina�sborder states and for the southeast region are provided inFigures 2 and 3.14 Old newspaper generation and recov-ery estimates for 1997 and 2002 for the southeast regionand the border states are based on national per capita aver-ages from 1997 EPA data. As previously explained, this ag-gregate method of calculation may overestimate genera-tion and recovery of ONP.

2 Paper: Old Newspapers

Figure 1: Estimated Supply of Newsprint in North Carolina

1997 2002Generation (tons) 282,412 299,673Recovery (tons) 159,594 169,611

Source: AF&PA and North Carolina S.W. Management Annual Report 1996-97.

RecoveryNorth Carolina achieved a 56.5 percent recovery rate fornewsprint in 1997, primarily due to the proximity to endusers in the Southeast region and mandatory recycled con-tent newsprint regulations. Currently the national recoveryrate is 54 percent, and industry experts estimate that, giventhe existing recycling infrastructure, optimal recovery levelsfor ONP should be between 65 to 70 percent.15

In North Carolina, local government curbside and drop-offcollection programs are the primary methods of recoveryand supply to paper brokers, dealers and end users. Duringthe past five years, local government recovery of ONP hasincreased more than 28 percent (Figure 4). In 1997,121,000 tons, or 76 percent of the total ONP recoveredin the state, was collected through local government pro-grams. Private (i.e. non-local government) recovery of ONPaccounted for the remaining 24 percent of the total ONPrecovered (38,000 tons).

While the percentage of ONP recovered has increased inrecent years, the quality of the recovered ONP supply isdeclining. Due to consistently low prices for No. 8 Newsduring the past three years, local governments have notemphasized source separation and, thus, have not achievedhigh quality ONP. Furthermore, in the aftermath of the re-

cent price decreases, some North Carolina local govern-ments have chosen not to maintain separate ONP and resi-dential mixed paper (RMP) systems due to the increasedefficiencies of combining ONP and RMP collection. Dueto the trend toward commingling ONP and RMP collec-tions, the local government ONP recovery calculations inthis report reflect an increased tonnage to include 50 per-cent of the tonnage reported as mixed paper by local gov-ernments in fiscal year 1996-97. As a result, nine percentof the 121,229 tons of the total ONP recovered consistsof ONP reported as mixed paper.

DEMAND FOR ONPWhile various technical and economic factors affect demanddecisions at mills, the following section describes seven fun-damental factors that have a significant impact on the de-mand for ONP.

§ General Demand for Paper and PaperboardProducts: In general, the demand for paper andpaperboard products parallels the health of theeconomy. Due to the strong economy and thecontinued demographic shift toward the southeast-ern United States, the demand for advertising innewsprint remained high throughout 1997.

Paper: Old Newspapers 3

Figure 4. Local Government Recovery of ONP in North Carolina

FY 1992-93 FY 1993-94 FY 1994-95 FY 1995-96 FY 1996-97Tons of ONP Recovered 85,728 97,534 109,927 104,034 110,242Percent Change, 1992-93 Baseline 13.8% 28.2% 21.4% 28.6%

Source: NC Solid Waste Management Annual Report 1996-1997. Does not include ONP reported as mixed paper.

Figure 2: Estimated Supply of ONP in North Carolina and Border States

1997 2002Generation (tons) 1,426,123 1,514,828Recovery (tons) 771,532 819,522

Source: Based on US EPA MSW Characterization Report, 1997 Update.

Figure 3: Estimated Supply of ONP in the Southeast Region

1997 2002Generation(tons)

2,697,144 2,852,883

Recovery (tons) 1,459,155 1,543,410 Source: Based on US EPA MSW Characterization Report, 1997 Update.

§ Recycled Content Legislation: Since the early1990s, minimum recycled content laws have beenimportant mechanisms to develop the domesticdemand for ONP. As of 1998, 28 states supportedmandatory or voluntary recycled content levels.Thirteen states have passed mandatory newsprintlaws across the country, and 15 states have estab-lished voluntary guidelines for publishers to use re-cycled newsprint.16 Many of the states adoptingsuch initiatives have also established programs withincreasing recycled content targets, so that the in-dustry can gradually develop demand for ONP. In1994, the North Carolina legislature required pub-lishers to use 30 percent post-consumer recycledfiber by 1998 with an increase to 35 percent by2000.17 Florida and Kentucky have also adoptedmandatory recycled content legislation by 1998.Virginia is the only state in the southeast that en-courages publishers to purchase recycled contentnewsprint through voluntary guidelines.18

These laws have provided an effective incentivefor newspaper publishers to demand recycled con-tent newsprint from paper mills. Possibly moresignificant than helping increase the demand forONP, the minimum content laws have provided a

stable domestic demand for ONP and provided acritical balance to the fluctuating foreign demandfor ONP.

§ Capacity for Recycled Newsprint Produc-tion and Consolidation Trends: In reaction tothe increased demand for recycled newsprint frompublishers, many newsprint mills invested heavilyin facility expansions with deinking capabilitiesthroughout the mid-1990s. In the Southeast re-gion alone, five newsprint mills reported using acombined total of more than 1.2 million tons ofONP in 1997.19 Despite the lack of announcedexpansions of deinking capacity, the mills surveyedfor this report anticipated increases in productioncapacity for recycled newsprint because of im-provements in production efficiency. Additionally,the current industry-wide trend toward consolida-tion could result in the acquisitions and expansionof smaller paper mills and increased capacity forrecycled newsprint production in the Southeast re-gion.

§ Export Demand: Fluctuations in the foreign de-mand for ONP have caused significant price vola-tility in ONP in recent years. For example, when


Figure 5: Price History of ONP (Processor and End User Prices)

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Source: Recycling Times. Processor Prices not available prior to 1995.

foreign market demand for ONP peaked in 1995,the prices for recovered paper increased dramati-cally (see Figure 5). Unlike the slow but steadilyincreasing domestic demand for ONP, foreign pa-per buyers have tended to enter the market some-what spontaneously and present large purchaseorders in short time periods, thus driving prices uprapidly. Unfortunately, they tend to cut orders justas quickly and create demand voids with parallelprice declines.20

From 1995 to 1997, the five largest foreign im-porters of ONP from the United States wereCanada, Mexico, Korea, China, and Indonesia.21

According to the AF&PA, total ONP exportsachieved a record high of 2.2 million tons in 1995.However, the level of ONP exports dropped to1.5 million tons in 1996, due to decreased for-eign purchases, increased recovery efforts abroad,increased supplies of recovered paper from Eu-rope, and the devaluation of foreign currencies.Despite the devaluation of Asian currencies in1997, exports rebounded to 1.9 million tons.22

China is expected to lead the growing Asian de-mand by increasing imports of recovered paper inthe short term. Industry experts anticipate that, asMexican and Asian economies strengthen, exportsof ONP will rise to 2.4 million tons by 2002.23 Inthe long term, increased investments in recyclednewsprint capacity in Asia along with increased re-covery efforts will eventually lead to a decrease inAsian demand for ONP exports from the UnitedStates.

§ Discontinuity between Supply and De-mand: Throughout the past five years, fluctuationsin ONP prices have reflected the inability of localONP suppliers to respond to large increases inforeign demand as well as a historical disharmony

between recycling collection efforts and domesticdemand. For example, because of their relianceon long-term public education campaigns, localgovernment collection initiatives maintain constantONP collection efforts despite fluctuating pricesand subsequent demand fluctuations.

§ Virgin Pulp Capacity: : : : : Although the process ofconverting virgin pulp is more energy intensive thandeinking and repulping recovered newsprint, manymills continue to rely heavily on virgin inputs dueto their consistent quality, reliability, and availabil-ity.24 Several factors that favor the continued reli-ance on virgin pulp supplies include the decentral-ized organization of recovered paper suppliers, theprice volatility of recovered paper relative to virginpulp, and the quality problems associated with thesupply of ONP.

§ Quality of Recovered Paper Supply: The con-sistently low prices for No. 8 News during thepast three years have not supported source sepa-ration of ONP by local governments. Since theprice decline in late 1995 and the expanding op-portunities to market mixed paper, many commu-nities in North Carolina have combined ONP withmixed paper collection in an effort to increase col-lection efficiencies. In addition, industry analystsindicate that the lack of consistent public educationconcerning material preparation has also contrib-uted to the decline in the quality of ONP sup-plies.25 With this trend toward non-source sepa-rated collection and reliance on material recoveryfacilities (MRF), mill officials have noted a declinein the overall quality of recovered paper supplies.Mill officials cited non-specification materials, suchas plastic and unbleached boxboard, as major con-taminants limiting the potential for using ONP inthe future.


Figure 6: Breakdown of End Uses for ONP

National Consumption ofONP by End Use

Tons (000) Percentage ofTotal

Newsprint 2,676 36.2%Recycled Paperboard 1,393 18.9%Exports 1,048 14.2%Tissue 496 6.7%Containerboard 264 3.6%Printing-Writing 176 2.4%All Other 1,333 18.0%

Source: AF&PA Recovered Paper Statistical Highlights (1997)

End User DemandRecycled newsprint production has traditionally been theprimary end use for recovered ONP in the United States.The AF&PA reports that more than 36 percent of ONPrecovered nationally was consumed by newsprint mills in1996. Paperboard mills consumed an additional 19 per-cent of the nation�s recovered ONP in 1996, while 14percent of of recovered ONP was exported. Figure 6 pro-vides a more detailed breakdown of the national uses ofONP in 1996, according to the AF&PA.

Nationally, newsprint mills are the largest and fastest-grow-ing end users of ONP. In an effort to support the rapidgrowth of recycling collection programs from 1989 to1993, many states introduced recycled content newsprintlaws to stimulate the demand for ONP. Partially as a resultof the increased demand from recycled content laws, al-most 56 percent of the growth in the consumption of ONPhas been attributed to increased newsprint consumption.26

Due to the prevalence of newsprint and paperboard millsin the southeastern United States, the region maintains astrong demand for ONP. The following section reviewsthe demands and concerns of five major newsprint mills inthe Southeast, because they constitute a majority of ONPdemand in the region. These descriptions do not implyendorsement by DPPEA or DENR of any company or itsproducts.

§ In 1997, Alabama River Newsprint Co., Per-due Hill, Alabama, produced 245,000 tons ofnewsprint sheet with approximately 115,500 tonsof recovered paper feedstock. Ninety-one percentof the recovered feedstock consisted of No. 8ONP with the remaining nine percent from pre-consumer coated groundwood. In 1997, onlyabout 2.5 percent of the recovered feedstock wasobtained from North Carolina. The mill does nothave any plans to expand recovered paper capac-ity. However, the Perdue Hill mill estimates that,on average, mills in the Southeast increase theirrecovered paper capacity by roughly 2.5 percentper year due to improvements in process efficiency.

§ In 1997, Augusta Newsprint Company, Au-gusta, Georgia, produced 35 percent recycledcontent newsprint with approximately 160,000tons of Number 8 ONP. In addition, Augusta ob-tained 60,000 tons of old magazines for its re-cycled content newsprint in 1997. Approximately15 percent of the recovered ONP was suppliedby North Carolina sources. Less than one percentof the OMG was obtained from the North Caro-


lina. Augusta plans to increase recycled content to40 percent by 2002 given the possibility that inminimum content legislation may expand or in-crease in the southeast states. As a result, the mill�sdemand for Number 8 ONP will increase to237,600 tons per year in 2002. Due to the steadydecrease in price for ONP since 1995, Augustahas experienced an increase in contaminants aris-ing from poor collection and material separationat the local level. During the past few years, themill has received some shipments with contami-nant percentages approaching 5 percent. Augustarecycles ONP almost exclusively from offset printingoperations.27

§ In 1997, Bear Island Paper Co., L.L.C.,Ashland, Virginia, produced newsprint with ap-proximately 28 percent recovered paper feedstock.Bear Island�s recovered paper composition con-sists of a 90 percent ONP and 10 percent OMGmix. In 1997, Bear Island obtained 12 percent ofits total 92,000 tons of recovered feedstock fromNorth Carolina. Specifically, North Carolina pro-vided 19,700 tons of ONP and OMG in 1997.Bear Island plans to expand recovered paper ca-pacity to 34 percent by December 1998, withplans to achieve a 40 percent recovered paper feed-stock percentage in the long term. The mill uses aflotation deinking process to recycle the ONP fromoffset newsprint.

§ Bowater, Calhoun,Tennessee, produces news-print using an average feedstock ratio of 80 per-cent virgin and 20 percent recovered paper. Themill currently produces newsprint sheets to differ-ent states varying its range of recycled content from80 percent virgin and 20 percent recycled to 60percent virgin and 40 percent recycled. The millused approximately 200,000 tons of recoveredpaper in 1997. In 1997, the recovered paper feed-stock ratios were approximately 70 percent ONPand 30 percent old magazines (OMG). TheCalhoun mill obtained between 30,000 and50,000 tons of ONP in 1997 from North Caro-lina mostly through round-trip pickups after drop-ping off unprinted newsprint shipments in the state.Currently, there are no plans for mill expansion inCalhoun, but increased mill efficiencies are ex-pected to increase the demand for recovered pa-per. The mill can recycle both offset and flexographicprinted newspaper.28


§ In 1997, Southeast Paper ManufacturingCompany & Southeast Recycling Corpora-tion, Dublin, Georgia, produced 530,000 tonsof 100 percent recycled content newspaper. Be-cause of their absolute dependence on recoveredpaper feedstocks, the Southeast Paper Manufac-turing Company manages the Southeast RecyclingCorporation, a paper collection and sorting cen-ter. The Southeast Recycling Corporation obtainedapproximately 700,000 tons of ONP in 1997.The Southeast Recycling Corporation also obtaineda small percentage of old magazines and inserts intheir 700,000 total tonnage. In 1997, SoutheastRecycling acquired 30,000 tons, or roughly fourpercent of its ONP supply, from North Carolina.The Dublin plant has the ability to process bothflexographic and offset ONP. While there are noimmediate plans to expand the Dublin mill, theyexpect to increase consumption of ONP by 50,000to 75,000 tons by efficiency improvements through2002. Furthermore, the possibility that Southeastwill acquire smaller mills in the region providesthe potential for increased demand capacity forONP during the next five years.

Other End UsesWhile newsprint mills consume the largest share of thedemand for ONP, paperboard mills also consumed 31 per-cent of recovered ONP in the Southeast region in 1996.However, paperboard mills are not ideal candidates for in-creases in demand because they represent a relatively low-end use for recovered newspaper utilization. More specifi-cally, because mills can substitute low quality mixed papergrades for ONP based on price differences, there appearsto be a limited potential for realizing sustainable increasesin ONP demand through recycled paperboard production.In addition, the potential for increased demand for recov-ered ONP from tissue and containerboard end users islimited by the shortness of fibers resulting from the repulpingof ONP.

Two other end uses are cellulose insulation and animal bed-ding. Cellulose insulation is an emerging market with sig-nificant potential for future growth.29 In contrast, animalbedding has been repeatedly mentioned during the past tenyears as a potential market for reuse of ONP; neverthe-less, end users have been reluctant to purchase and trans-port ONP from recovery locations to rural markets. As aresult, unless prices drop further or transportation costsare subsidized, the potential for increased demand throughanimal bedding will be limited by the price of ONP and theproximity of the appropriate farms.

Figure 7 estimates the demand for ONP in North Carolinaand its border states and the southeast region.

SUPPLY / DEMAND RELATIONSHIPNationally, the market for ONP can be best described ashaving a fairly stable demand structure with steady supplysources. Despite the strong and steady demand for ONPin the southeast, regional prices have varied significantly dur-ing the past five years due to large fluctuations in foreigndemand. The lack of flexibility innate to local curbside col-lection efforts has resulted in a fairly stable supply of ONPdespite the price fluctuations. As a result, despite the varia-tions in the market prices, the total quantity of ONP re-covered in North Carolina has increased steadily duringthe past five years.

In response to the consistently low prices for ONP in theregion during the past three years, many local collectionefforts have shifted toward commingled collection and pro-cessing of ONP in combination with residential mixed pa-per (RMP). Combined with a decrease in the quality ofsource separated ONP, the shift toward commingled col-lection provides an indication that supply exceeds demandfor ONP in the southeast.

It can be assumed that all recovered ONP was utilized fornewsprint, other paper products, cellulose insulation, oranimal bedding. Actual demand for all four grades of ONP

Figure 7: Estimated Demand for ONP

1997 2002North Carolina 127,382 153,651NC and Border States 523,820 557,880Southeast Region 1,429,800 1,515,140

Sources: North Carolina Demand numbers from Survey of seven end usersNorth Carolina and Border States and Southeast Region demand based on 1998 Utilization data (AF&PA)

is therefore roughly equivalent to supply. Figures 8 and 9,however, represent the demand from the five largest news-print mills in the Southeast for ONP recovered from NorthCarolina and the Southeast region. The demand estimatesreflect the general trend of increased ONP demand fromnewsprint mills in 1997 and 2002. These tables do notaccount for all the end users in the region and are not in-tended to provide comprehensive ONP demand estimates;it is likely that the demand provided in the tables underesti-mates total demand in 1997 and 2002.

Regionally, the needs of newspaper publishers and the re-cycled content capacity of mills directly affect the demandfor ONP. While North Carolina, Kentucky, Florida, andVirginia have provided leadership in the establishment ofrecycled content laws in the Southeast, other states havenot adopted minimum recycled content initiatives. Cur-rently, South Carolina, Georgia, Tennessee, Alabama, andMississippi lack state guidelines for recycled content news-print. Several of the largest mills in the southeast have indi-cated the capacity to produce at least 40 percent recycledcontent newsprint sheet thus providing the technical capac-ity to increase recycled content consumption. In contrast,some states in the northeast and upper mid-west have ex-perienced difficulty attaining sufficient recycled content dueto low levels of recycled fiber from Canadian newsprintshipments. Finally, with no apparent increases in the futureconsumption of ONP, the demand for ONP can be furtherdeveloped in the southeast through higher percentages forrecycled content newsprint. Missouri has already providedsuch leadership by increasing its target level to 50 percentrecycled content newsprint by the year 2000.30

CONCLUSIONONP represents one of the largest single sources of mate-rials discarded in the waste stream. As such, ONP shouldremain one of the top priorities for reaching the state�s 40percent waste reduction goal. Given the mill capacity toincrease recycled content levels and continuous improve-ments in production efficiency, it appears that the domesticdemand for ONP should continue to grow at a slow butsteady pace in the near future. In addition, while the statehas little influence on foreign markets, industry experts ex-pect the foreign economies to rebound in 1998 along withtheir demand for recovered paper.

RECOMMENDATIONSThe following recommendations are intended to improvethe ONP recycling market through demand developmentand improved effectiveness of recovery efforts in NorthCarolina.

§ As a result of the technical improvements in re-cycled newsprint production at mills in the South-east region, it is recommended that the state ofNorth Carolina reconsider its current recycled con-tent goals. North Carolina should play a leader-ship role in the region by reviewing the currentmandates in order to account for possible improve-ments in mill capacity. The telephone survey con-ducted for this report revealed the two largestnewsprint mills in the southeast currently have thecapability to produce 40-percent recycled contentsheets. Two of the remaining three mills in theregion stated their intention to reach a 40-percent

Figure 8: Estimated ONP Supply and Demand for North Carolina

1997 2002Supply of ONP (Recovered in NC) 159,594 169,611Demand for NC�s ONP (Reported) 127,382 153,651

Sources: Supply numbers reflect recovery as reported by the North Carolina State Annual Report for 1997. Demand numbers from survey of five end users in North Carolina and its Border States.

Figure 9: Estimated ONP Supply and Demand in the Southeast Region

1997 2002Supply 1,459,155 1,543,410Demand 1,216,772 1,430,544

Sources: Supply numbers reflect the recovery of ONP based on EPA estimates. Demand numbers from survey of five end users in North Carolina and its Border States.


recycled content capacity in the near future. As aresult, the state should consider working with pub-lishers and newsprint manufacturers to establishadditional recycled content targets beyond the year2000. The state should also review exceptionsgranted under the current 35 percent regulations.

§ In the absence of price stabilizing mechanisms suchas futures markets, the state should address thediscontinuity between supply and demand by en-couraging contact between end users and localgovernment suppliers. More specifically, the statecould facilitate efforts to have recycled newsprintmills present their needs to local governments inNorth Carolina. The state should organize effortsto investigate the potential for voluntary partner-ships and/or long-term contracts between end us-ers and local governments. Because of labor andoperating cost reductions, many mills have ex-pressed a preference to receive ONP directly frommunicipalities rather than through processingplants.31

Closer ties between ONP suppliers and mills wouldalso lead to more timely and efficient shipments ofONP. For example, during summer periods of peakenergy costs, recovered paper suppliers could helpoffset the high energy costs associated with virginpaper processing by increasing their ONP ship-ments. In addition, end users may be more willingto provide higher prices and longer term contractsfor higher quality, timely shipments from local col-lection programs. Finally, mills could use this op-portunity to educate local governments about theirquality standards.

§ Efforts should also be made to further inform localgovernment collectors about the dynamics of pa-

per markets. Increased awareness of previouslysuccessful marketing strategies could be onemethod of improving local government efficiencywith regard to market sales and contracts. For in-stance, Duplin County�s storage of mixed paperduring periods of lower market prices is one ex-ample of how a collector�s awareness of marketdynamics can positively affect the sustainability of alocal recovery program.

§ Contaminants in ONP supplies impose additionalcosts on the use of ONP relative to virgin fibersources. Improvements to the quality and consis-tency of ONP supplies could enable local govern-ments to net higher prices and possibly encourageincreased utilization of ONP. One method of im-proving the quality and quantity of ONP recov-ered would be for local governments to shift to-ward pay-as-you-throw waste collection systemcoupled with public education.

In conjunction with improved local governmentefforts, partnerships between end users and localgovernments should also be encouraged as a meansto reducing ONP contaminants. Such partnershipswould encourage end users to assume a more ac-tive role in setting quality standards for their ONPsupplies in exchange for sharing some of the finan-cial responsibility for public education campaigns.

§ Finally, based on the decreased distance betweenurban and rural areas of some parts of the state, itappears that the potential for reusing old newspa-per as animal bedding will increase in the future.As a result, it is recommended that additional sup-port be provided to experimental programs docu-menting the effectiveness and efficiency of usingONP as a bedding substitute.

1 Sound Resource Management Group, Inc. The Economics of Recycling and Recycled Materials, prepared for the CleanWashington Center. December 1993. p. 1022 There are four grades of ONP that have been traditionally recovered and utilized as feedstocks for newsprint or other paperand paperboard production at mills. The four grades of ONP are No. 6 News (containing up to 5% contaminants), No. 7 News(containing ONP and magazines), No. 8 News (containing only one-fourth of 1% contaminants) and No. 9 News (consistingof pre-consumer over-issued newspaper).3 Institute of Scrap Recycling Industries, Inc. Scrap Specifications Circular 1998 .p. 34-354 U.S. EPA., Characterization of Municipal Solid Waste in the United States � 1997 Update. May 1998.p.295 AF&PA, Paper, Paperboard, & Wood Pulp, A Monthly Statistical Summary from the AF&PA. January 1998.6 AF&PA, 1998 Annual Statistical Summary Recovered Paper Utilization, Twelfth Edition. June 1998 p.15For purposes of this report, The Southeast Region is defined as North Carolina, South Carolina, Virginia, West Virginia,Tennessee, Kentucky, Tennessee, Florida, Alabama, and Mississippi.7 U.S. EPA., Characterization of Municipal Solid Waste in the United States �1994, 1995, 1996, 1997 Updates.8 American Forest and Paper Association, Paper, Paperboard, & Wood Pulp, A Monthly Statistical Summary from the AF&PA.January 1998.9 U.S. EPA., Characterization of Municipal Solid Waste in the United States � 1997 Update. May 1998. p. 29


10 Ibid. p. 29.11 Personal Communication. Steven Fowler, American Forest and Paper Association. May 18, 1998.12 Ridgley, Heidi �ONP Market Could Be Affected By Falling Newsprint Production Rates,� Recycling Times. Vol. 9. July 21,1997. p. 1, 13. & Iannazzi, Fred and Clarke, Rosemary, �Recovered Paper Target Level of 50% Seen Unreachable by 2000�,Andover International Associates, May 1998, p. 313 North Carolina State Planning Office Population Projections for 2002 (Source: http://www.ospl.state.nc.us/demog/#a)14 North Carolina�s border states consist of South Carolina, Virginia, Tennessee, and Georgia, and the southeast region includesNorth Carolina, South Carolina, Georgia, Virginia, West Virginia, Tennessee, Kentucky, Alabama, Florida, and Mississippi.15 Miller Freeman, Inc., �Wastepaper markets to strengthen in 1998 despite persistent lull in offshore exports.� Paper Recycler.Vol. 9 No. 1. January 1998.16 Miller Freeman, Inc. �Paper Grades: Newsprint,� Pulp & Paper 1998 North American Factbook. p.184.17 Post-consumer recycled content includes only ONP that has entered the consumer waste stream after leaving the newsprintpublishing facility.18 Ibid. p. 184-18519 Personal conversations with mill purchase agents for recovered paper.20 Mary Cesar. �Asian currency crisis affects U.S. recovered paper markets.� Resource Recycling. June 1998. p. 30.21 AF&PA. 1998 Annual Statistical Summary Recovered Paper Utilization. Twelfth Edition. June 1998. p. 50 and 56.22 Ibid. p. 50.23 Miller Freeman, Inc. �Wastepaper markets to strengthen in 1998 despite persistent lull in offshore exports.� Paper Recycler.January 1998. Vol. 9, No.1. p.1-8.24 The majority of virgin material newsprint is produced through mechanical pulping processes. Newsprint is produced byshredding softwood or hardwood logs and chips using either water and stone grinders (groundwood pulping) or steam andrefiner technology (thermomechanical pulping). Based on the EDF�s Recommendations for Purchasing and Using Environmen-tally Preferable Paper: Final Report. 1995. p. 173-174.25 Communication with Bill Moore, Moore and Associates, September 199826 Michael Alexander, �ONP and ONG Market Outlook to 2000�, Wastepaper IV Conference Proceedings, Chicago, Il. May199527 Offset printing is the more traditional form of newspaper printing in which ink is transferred (off-set) to the newspaper froma rubber cylinder and lithographic plate. Offset printing normally uses oil-based inks and paper which is relatively impervious towater. Flotation deinking facilities are required to recycle offset printed newsprint. (Based on Recommendations for Purchasingand Using Environmentally Preferable Paper: Final Report, EDF, 1995 p.238).28 Flexographic printing is a relatively recent technology whereby the ink is transferred directly to the paper through flexiblerubber or plastic plates. (Source: Flexoexchange website, http://www.flexoexchange.com/glossary.html#F). Flexographicprinting uses water-based inks and has become increasingly popular because it results in decreases in number of breaks at thestart up of the printing machine and lower investment costs. (Based on �De-inking of wastepaper containing water-based flexo-printed newsprint� by G. Galland and Y. Vernac, Pulp and Paper Canada, Vol.94:6. 1993. p. 181.29 Communication with Bill Moore, Moore and Associates. September 1998.30 State Recycling Laws Update. �California Leads Mandatory Newsprint Program States.� Vol.7, No.4. April 1998.31 Edwards, Rodney. �Future Trends in the Secondary Fiber Industry.� Recycled Paper Technology. 1994. p. 12-18.


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