Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

By Huban Kasimi



A 93.6pc cardboard box recycling rate reported by The American Forestry & Paper Association (AF&PA) in its latest annual report has sparked some debate among industry experts. In the concluding part of our series on US cardboard trends, Ryan Fox, corrugated packaging market analyst at Bloomberg LP, decodes the different methodologies in play.


Paper recycling rates in the US during 2022 held firm at 68pc, with the rate for Baled Old Corrugated Containers (OCC) reaching 93.6pc, according to recent data from the American Forestry & Paper Association (AF&PA). This marked an increase compared with the previous year’s figures. Additionally, the average recycling rate for OCC over the span of three years (2020-2022) stood at 91.3pc.


The 2022 effective recycling rate for total paper declined slightly to 73-78pc, while the effective rate for OCC held approximately stable at 80-85pc. 


The AF&PA has defended its claim of a 93pc cardboard recycling rate. More than two-thirds (or about 50mn nt) is recycled and used to make new sustainable paper products that people use every day. 


According to an Aug 8 statement, the paper recycling rate is calculated through the following methodology:

  • AF&PA data on the amount of recovered paper used to make new paper and paperboard by U.S. paper mills.
  • U.S. Census Bureau data on net exports of recovered paper used to make new paper and paperboard in paper mills around the world. 
  • Then, AF&PA compares that total to the new supply of paper and paperboard in the U.S. over the same time period.
  • The rate informs how much paper is diverted from landfills. This is an important indicator of how much recovered paper is used to make new products.

The above methodology calculates the current paper recycling rate at nearly 68pc and more than 93pc for cardboard. The association also calls this the traditional rate.


AF&PA also calculates a statistically sound effective rate alongside the traditional recycling rate.


Although these percentages are impressive, the report has sparked a debate within the industry. 


The debate

Ryan Fox, corrugated packaging market analyst at Bloomberg LP, agrees that the association’s statistics are important, but paper production investment trends in the US have changed. The number of paper mills has risen in the last 20 years. 


Echoing the AF&PA’s sentiments, Fox reiterated that a recent increased investment in recovered fiber needs to be championed. “Even a recycling rate of 40pc does not diminish the industry’s efforts to retrofit and use recovered material.” But the AF&PA must highlight the total tonnage that gets recovered every year. 


Fox clarifies that the AF&PA’s numbers are fine to signal their calculation of how things are changing. “However, my concern is how the rate is leveraged and communicated,” he said. “For instance, the AF&PA says, Did you know that 93pc of corrugated boxes get recycled?” He added, “But that’s not what the rate means, and in any year if paper recovery is unparalleled and the calculated rate is 104pc, would the AF&PA use the same language? That would be unrealistic.”


A convergence of ideas
Eventually, Fox found common ground with Myles Cohen, founder of advisory services firm Circular Ventures LLC, for a simpler way to interpret cardboard recycling data. Cohen’s specialty areas include material recycling facilities (MRFs), packaging design companies, and recovered materials traders.


Both Fox and Cohen began individually researching statistics based on the numerator (actual paper recovery volumes) and denominator (recovered paper supply). It is notable to highlight that there were minimal statistics to work with since procuring numbers is difficult.

“We found that imported boxes are counted as part of recovery but are not considered adequately as a function of supply. That’s where the difference is,” said Fox. Cohen and Fox agree that AF&PA data’s volumes and percentages need the right interpretation for paper recyclers to connect with the existing rates.


Are higher recycling rates a deterrent?

The current rate of 93pc is posing a challenge for recyclers. The published paper recycling rate is so high that procuring funds for future expansions becomes increasingly difficult. According to banks and lending institutions, the remaining 7pc is a minor share of existing volumes to justify the extra capital requirements.


This is why there is a substantial opportunity to represent the data in two distinct categories: recovery and supply, according to Fox. Moreover, there is a much broader supply of recovered paper, which is yet uncalculated. 


Lower state-wide actual averages

MRFs usually have scale trade collectors for recyclables. Given the current costs of collection and baling at about $40/nt, excluding the price of gasoline, many do not pick up waste paper. It’d be a loss-making operation for them. When OCC prices were higher, most MRFs received more recovered paper tonnages from scavengers than commercial businesses. 


Fox and Cohen continue to verify their data to validate their methodologies. Most of their statistics are extrapolated from municipal and state waste characterization studies or audits, and both have found that millions of OCC-grade tons do eventually end up in a landfill. For example, Florida’s recovered paper recycling rate was about 40 percent in 2021, and almost 1.7mn mt went to landfills. This is nowhere near the rate that the AF&PA released. 


“We saw that a 40-45 percent recycling rate was normal from states that carried out high-level waste characterization studies,” Fox explained. He added, “In 2021, Colorado recovered 6.5pc or 328,109nt of cardboard OCC. This means about 388,000nt of the grade made it to the landfill, bringing the total recovered OCC volumes to 716,000nt, translating to an average of 45.7pc in Colorado.”


If recycling rates were truly as high as 93pc, there would be no need for Extended Producer Responsibility (EPR) legislation. States would not pursue those initiatives because they would not need to do so.


Ryan Fox is a Corrugated Packaging Market Analyst at Bloomberg LP, covering the US corrugated box market. Fox has also helped develop demand, lead times, and price change metrics that provide box plant-level insights. Prior to this, he spent over ten years in the packaging industry, where he learned industry fundamentals.


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