The market
The paper industry plays a dominant role in the global economy, with annual global sales exceeding $500 billion and producing over 300 million tons of product. The US industry accounts for approximately one-third of the market, while its European counterpart is valued at about one-fifth. The industry relies on forestry practices with harvesting cycles ranging from 7 to 100 years. Investments in new facilities exceed $1 billion, with machines capable of processing paper at speeds of up to 100 km/h and a production capacity of 500,000 tons per year, thanks to economies of scale. The European industry directly employs 245,000 people, while the global workforce numbers around one million. The European industry achieves the best results in recycling, with 42% of all new paper coming from recycled content. In the United States, the trend is improving, with 119 mills relying solely on recycled paper. It is worth noting that the amount of paper delivered to the U.S. market fell from 105 million tons in 1999 to 79 million tons a decade later. However, only 36% of the fiber used to manufacture new paper products in the United States is recycled paper. On the other hand, 63.4% of all consumer paper was recycled in 2009. Yet, paper, cardboard, and packaging account for 35% of all municipal solid waste. Fortunately, the amount of paper ending up in landfills has decreased by 30% over the past 20 years. Raw materials (pulp and fiber) account for one-third of the average cost of paper production, while energy accounts for slightly more than 35%. 90% of all paper is made from processed wood. India is heavily reliant on bamboo, which yields up to four times more fiber per hectare per year than a genetically modified pine or a fast-growing eucalyptus tree. Recycling one ton of newspapers saves one ton of trees, while recycling high-quality copy paper saves over two tons of wood. Paper recycling could save up to 70% of energy. However, because paper mills generate much of their energy by burning bark, roots, and lignin, increased recycling means less renewable energy needs to be generated elsewhere. Furthermore, as more recycled paper mills are located near urban centers, energy costs tend to be higher.
Innovation
The pulp and paper industry is seeking to reduce its use of chemicals. The dramatic impact of dioxin, a byproduct that cannot be broken down by natural systems, and its accumulation over decades have forced the industry to search for alternative bleaching techniques, dominated by hydrogen peroxide. Now, the use of sodium sulfate, known as the Kraft process, which made paper much stronger and was invented over a century ago, is being proposed as a replacement for an enzymatic process. This process was originally discovered by Nobel laureate Professor Steven Chu, who later became Secretary of Energy in President Obama's administration. It is inspired by the way termites break down wood in their gut. A group of Malaysian researchers based at the University of Sarawak has discovered how to produce a family of enzymes, grown in palm waste and rice husks, to remove ink from recycled paper without the use of chemicals. Janis Gravitis, a wood chemistry expert who spent his entire career at the Latvian National Institute of Wood Chemistry in Riga, studied trees and fibers for decades. As a physical chemist, he investigated the behavior of wood using pressure and temperature. He quickly realized that wood processing industries target only cellulose, which makes up about 50% of wood. The remainder—lignin (30% in softwoods and about 20% in hardwoods), hemicelluloses, and lipids—is traditionally incinerated as a chemical cocktail. He designed a processing system that—without using any chemicals—uses only the pressure and temperature of saturated steam, allowing the wood to be separated into four different fractions. The technique, known to experts as "steam explosion," allows for the individual recovery of each component: pure, sulfur-free lignin for adhesives; phenol-like biochemicals or clean fuels; hemicelluloses as raw materials for edible sugars and biochemicals; lipids as oils and biochemicals; cellulose for paper production; bioethanol; and nanofibers for new composites and packaging. Janis and his team then built their own testing equipment, separating all the ingredients using minimal energy and a fraction of the water normally required. The results were remarkable. Paper fibers represent only a small fraction of the total biomass, compared to sugarcane and bamboo, and the prolific pulp mills; the long-term competitiveness of wood for paper depends on generating multiple revenue streams from all available resources. If the four main components could be separated using a closed-loop water cycle, a new business model would emerge. This model, based primarily on innovations grounded in the laws of physics and pursuing economies of scale that generate multiple cash flows, embodies three of the characteristics of the Blue Economy.
The first cash flow
Latvian scientists dedicated to wood chemistry had little to no contact with the outside world until the end of the Cold War with the fall of the Berlin Wall in 1989. The Royal Swedish Academy of Sciences recognized the Latvian research group as exceptional, possessing a strong academic foundation and the capacity to innovate in this unique field of wood chemistry. By the end of the Cold War, Janis and his colleagues had already established wood processing facilities where fibrous biomass could be shaped and formed, resulting in strength and durability without the need for epoxies or phenol-formaldehyde binders, as is the case with multi-density fiberboard or plywood. The team used furfural extraction techniques, a biochemical useful in the production of synthetic polymers, and then processed the residue after extraction using steam blasting. This integration of technologies resulted in the use of nearly 100% wood as a raw material.
The opportunity
As previously noted for algae (Cas 21), the "core business – core competency" approach overlooks the opportunity to generate additional cash flow by utilizing available resources. Just as algae can produce food, fuel, and fine chemicals, wood should not be reduced to cellulose alone, with all residues being incinerated. The experience of Janis Gravitis and her team, who are continuing their research, demonstrates that a single tree can generate multiple cash streams, provided the processing technology shifts from chemically "burning" all non-cellulosic materials to a separation technique that recovers each component. This is known as biorefining. In a world where we urgently need to improve the efficiency of our resources, commercial extraction of just 40 to 50 percent should evolve to generate at least three to four times more revenue, create jobs, and reduce the industry's carbon footprint. The pulp and paper industry will claim that it relies on "waste" as fuel. As Janis points out, the only clean fuel component is lignin, which, in its pure form extracted by pressure and temperature alone, is actually too valuable to burn or not burn at all. This is a new competitive landscape in which new players will have the opportunity to enter markets traditionally dominated by a small number of companies. It's time to change that perception.
