Since we’re in the paperboard and corrugated board—or just paper—converting industry, I thought I’d focus this column on the issues regularly tracked by our friends at the American Forest and Paper Association (AF&PA). After all, AF&PA is the largest paper industry trade association in the United States, and according to its website, AF&PA’s member companies produce 87% of the pulp, paper, paper-based packaging, and tissue products made in the U.S. AF&PA and its more than 100 staff members in Washington, D.C., are, thus, the go-to source for statistics about our industry as a whole and federal and state regulatory and legislative issues affecting our businesses. So, what’s on AF&PA’s mind these days?
For starters, the U.S. Department of Energy’s funding of industrial decarbonization. Under the Inflation Reduction Act and Bipartisan Infrastructure Law passed in 2023, up to $6 billion is being made available to energy-intensive industrial sectors to aid in the development of technology to reduce industrial emissions. The pulp and paper industry, being one such sector, has a notable entrant in this category, and that’s International Paper’s “Pulp and Paper Energy Efficiency and Electrification Upgrades.” This project aims to reduce greenhouse gas emissions from a thermal process in pulp and paper manufacturing. “That’s very nice,” you might say, “but how does this help my business?” Well, as I see it, we are consumers of paperboard and containerboard in some shape or form, and any technology our suppliers can harness to improve not only the environmental effects but also more importantly the efficiency (cost-reduction) of the process will benefit us and our customers by enhancing our ability to deliver a more competitive packaging solution.
Another perennial issue that AF&PA continues to follow, and in many cases fight, is so-called extended producer responsibility (EPR) legislation. This is currently only a state issue, with five states having an EPR program of some form. What is it? In its simplest form, EPR is a financial scheme whereby producers are taxed on the solid waste of their products, and the revenue from this tax is then funneled back to individual cities and towns to help fund their curbside recycling programs. (Remember that the revenue from selling the recovered packaging waste was supposed to fund these programs locally, but the glut of recovered glass, cans, and other materials has depressed prices and created a disincentive for localities to collect these materials.) In most of these EPR laws, certain packaging commodities are given a pass based on their overall recycling rate in the state. Paper and paper-based products have fared much better because the overall paper recovery rate is in the 60% range, while corrugated is now tracked at 93%. Compare this with plastics, which had a recovery rate in 2021 of only 13%, according to the U.S. Plastics Pact Annual Report. With that background, Minnesota is the latest state to enact such legislation, and in its communication with members of the Minnesota legislature and Gov. Tim Walz, AF&PA correctly noted that in Minnesota paper-based products are recovered and recycled at a rate of 63%. So why burden producers with a financial liability for a product already in the recovery stream?
These are only a couple of issues affecting our industry as a whole—and eventually each of our businesses. Watch this space for more updates.
Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.
