Challenges across the recovered paper sector push recyclers to get creative

The need to overcome constant challenges and the importance of logistics were key points of discussion at the BIR Paper Division side session held at the World Recycling Convention in Gothenburg, Sweden. 

In his opening remarks, divisional President Francisco Donoso of DOLAF Servicios Verdes SL (Spain) noted that, while the recovered paper sector continues to face challenges, it is also evolving, and the "demand for sustainable raw materials and circular solutions has never been more important than now".

Global shipping heavily impacts the flow of recovered paper

Marc Ehrlich, CEO of Switzerland's Vipa Group, and Asa Demme, Maersk's head of Integrated Sales for the Swedish market, began the meeting by discussing the current shipping issues impacting the industry. As Ehrlich explained, the recovered paper sector relies on shipping lines at the "right pricing" to support the movement of paper.

"Many people often ask, 'Why do you need to ship waste into Asia?' — First of all, it is not waste at all; it is a raw material for the paper industry," he said. "Secondly, because if you produce a product in Asia, you need the packaging in Asia, then you receive the product in Europe and in the United States. This is where you [then] have the waste of the packaging that you need to ship back to Asia for the next generation of product. And you do that in empty containers that the shipping lines have in excess in those places."

While the current focus is on the Strait of Hormuz, there are 14 important straits and two very important canals in the world, according to Ehrlich, with the Strait of Malaga carrying 80 percent of traffic. But the current concern about the Strait of Hormuz is that any tariff imposition would trigger a ripple effect, "and all these straits will be thinking [of introducing] the same thing," a move that would lead to "very huge issues".

"The world keeps on being volatile and unpredictable," Demme added, which is why Maersk rethought its operations and launched a new ocean network last February — the East-West network — in co-operation with Hapag-Lloyd. This partnership reduces the number of ports at which each vessel calls, reducing the carry-through of delays and increasing service reliability, which in turn helps recyclers to plan better.

While there have been "a lot of disruptions" in the last 15 years, from geopolitical conflicts to port congestions to canal shutdowns, Demme said around 80 percent of these have occurred within the last few years. "And the only thing we know is that they will continue to happen," she added. The critical situation in the Middle East, and with the Strait of Hormuz in particular, is not just directly impacting the region but also creating "a lot of ripple effects on other trade flows".

Of the 100 million barrels of oil consumed each day globally, 20 million travel through the Strait of Hormuz. "That is why a closure of the Strait of Hormuz is having such a large impact across the globe and for the oil, and for the energy, and, of course, for us as a shipping [provider] on the bunker cost and also on the sourcing, because if we used to bunker up our vessels in this area, that cannot be done anymore, and then we need to find alternatives," she explained.

Freight prices are stabilizing across the globe 

Overall, rising bunker costs are expected to affect ocean freight rates, but these have been stabilizing. There has been an increase in rates for exports out of Asia, but on a lot of the backhaul, where it sees a lot of recovered paper, "I would say it's been quite stable, at least looking at Europe's exports", ventured Demme.

In the longer term, the shipping company — which is responsible for moving around 20 percent of the world's containerized cargo — expects a situation with higher supply than demand, but in the near term, this growth is likely to be quite modest. It can also see large growth in intra-Asia container trade flows, "and I think we will see more of the intra flows based on regionalisation and similar, going forward", she said.

Three words Demme used to describe the current state of supply chains were: disrupted, divisive, and defiant. "And I think the reason I mention defiant is that we become more agile and we become more creative in situations like this," she added.

Shipping paper uses C02, but isn't inherently wasteful 

In the question-and-answer session, Donoso reflected on the common argument that shipping recovered paper across the world comes at a CO2 cost. Ehrlich replied that containers have to travel from Europe or the U.S. back to Asia, empty or filled. If the alternative proposal is to convert more recovered paper in Europe, this solution would then mean finished reels of corrugated would have to be shipped to Asia instead, which would not change CO2 use.

Demme confirmed that containers have to be moved back to where they are needed and, therefore, moving recovered paper on backhaul routes is "a super important thing from a base cargo and equipment positioning perspective".

Legislation and regulations affecting the global shipments of paper 

Moving on to regulatory challenges, Emmanuel Katrakis, director of Regulatory Affairs at Galloo and board member of Recycling Europe, urged the sector to register on the new EU Digital Waste Shipment System, known as DIWASS. This registration applies to all actors in the chain, including mills from countries outside the EU.

The new system was introduced under the revised Waste Shipment Regulation (EU) 2024/1157 and began on May 21, 2026. With the transition period, the recovered paper sector has until December 31, 2026, to start using the system — but his advice was to act now.

A key point is that all actors must be registered in the system, including operators, transporters, and competent authorities, as well as recovery and disposal facilities. If any of these are not registered, the system will not work without the ability to select each actor from a drop-down menu.

DIWASS applies to shipments from non-EU countries to the EU; shipments within the EU; and shipments from the EU to non-EU countries. Therefore, all Asian mills that want to buy from Europe must register on DIWASS before the end of the year. "In six months, it won't be possible anymore to export recovered paper outside the EU to a paper mill that is not registered within the DIWASS," pointed out Katrakis.

An audience member raised concerns that Asian mill customers might perceive DIWASS as an imposition and that many may not register, which would then reduce outlets. Katrakis responded that DIWASS did not pose any audit obligations and that actors simply have to register on the online platform to be in the system. He urged everyone to ensure their biggest customers register: "That is in our interest...and also in their interest to keep that business going."

Another "headache" facing the sector, said Katrakis, is that the new Waste Shipment Regulation requires electronic sharing of the Annex VII form 48 hours before a shipment, which is "mission impossible" since the information needed is not usually available at that time. There has been strong lobbying against this requirement and for a digital system to support the sharing of immediate rather than advanced information.

Corrugated boxes as a key economic indicator 

Myles Cohen, board member of Vipa Group, then shared how corrugated boxes can be used as an economic indicator — Alan Greenspan, former Chairman of the U.S. Federal Reserve, and U.S. investor Warren Buffett use this approach.

Corrugated boxes transport 75-95 percent of everything manufactured in the U.S. and directly reflect consumer spending. Data analysis found that box levels dropped before the 2008 financial crisis began, and several months before commodity prices began to drop.

Key paper markets continue to expand infrastructure 

The second half of the meeting included market presentations from Ranjit Baxi, president and managing director of U.K.-based J&H Sales International; Simone Scaramuzzi, sales and purchase director at Italy's LCI SRL; John Atehortua, key account manager at Remondis Trade and Sales GmbH; and Mr. Cohen.

Baxi flagged that major infrastructure investment in India will benefit its importers and make it a stronger partner, as material will travel faster and at less cost, with digital technologies supporting the efficient movement of freight. India, he said, has ambitions to be China's ‘plus one' in supplying the world. 

Over in the U.S., the recovered paper market was "all about OCC", said Cohen. But lightweighting, right-sizing, and falling food sales have reduced the demand for corrugated. As a result, the U.S. has a recovered fibre surplus, and exports are critical. First-quarter figures show that India, Vietnam, Thailand, and Malaysia were its top export destinations, with India and Southeast Asia taking two-thirds of U.S. recycled fibre.

Speaking on the European export market for the last six months, Scaramuzzi said it "became increasingly driven by logistics rather than supply and demand", with external factors such as the war in the Middle East and increased shipping costs having a huge impact. "The shipping costs, the freight costs, increased approximately 60 percent because of the war," he said. Insurance costs went up 25-40 percent. Meanwhile, 20-30 percent higher energy costs increased the cost of collection, sorting, baling, and mill operations. This compressed margins and drove customers to buy on a spot basis.

Atehortua added that mills in Europe keep low inventory levels, buy what they need, and produce to market demand. Mills are not running at full capacity, keeping prices stable. In addition to shipping costs, trucking rates have gone up around 30 percent, and sometimes suppliers expect buyers to bear this increase. But he believed current challenges are redefining success: "Whoever is the most streamlined, whoever has the best logistics partner, the best partner in terms of shipping, that's the one who is going to be more successful," he said. While he acknowledged the market is challenging, Atehortua said it is "also very enticing" and pushes the industry to "be creative, to be more effective...and that is maybe the positive".

BIR Paper Division Papyrus Award 

Before closing the meeting, Donoso presented the Papyrus Award from the BIR Paper Division to Sabri Cimen, CEO of Turkish group Eren Holding, in recognition of its contribution to the industry.

Eren Holding has an international reach and is the owner of U.K.-based Shotton Mill; this company has received a roughly £1 billion investment, one of the largest private-sector investments in the U.K. The plant, focused on sustainability and efficiency, is due to start production at the end of the year and will have the capacity to produce 750,000 tonnes of 100 percent recycled containerboard and 67,000 tonnes of tissue.