Paper industry must retool to avoid billions in expected losses: Lux Research

The latest report from market research and data specialist Lux Research (Boston, MA) has revealed that diversification and innovation are essential for the pulp and paper industry to succeed in emerging packaging applications – and to stave off tens of billions of dollars in expected losses! Digital media and paperless communication have caused a major decline in the pulp and paper industry over the past decade. This shift, alongside COVID-related pressures, is projected to cost the industry $26 billion per year over the next several years according to Lux’s latest report, Diversification of the Pulp & Paper Industry, that outlines how companies can innovate to succeed, despite the overall decline in demand for paper products.

The study revealed that pulp and paper companies do have a few options to compensate for the decline in pulp’s value. Among those options are increasing the value of kraft pulping products through Moulded Pulp Product (MPP) packaging and nano-cellulose products, or changing their processes to a biomass fractionalization route that enables the hemicellulose and lignin components of biomass to be valorized alongside cellulose. “Alternative pulping products could represent a $46 billion industry,” said Charles Willard, lead report author and Senior Research Associate at Lux Research. “In a market that is in constant decline, failing to innovate and find new sources of demand could mean death.” The company added that MPPs offer a sustainable packaging option, but have undesirably high air permeability and water-absorption rates. Plastic coatings can be added to provide moisture resistance, but this limits the recyclability and overall sustainability of the product due to the difficulty in removing the materials from the paper, which would contaminate recycling streams. In order for MPPs to have wider-use options and penetrate the traditional plastics packaging market, sustainable and durable coatings and additives are needed, said the report.

It went on to say that black liquor solids are currently the fifth most used fuel source in the world, but companies are looking for ways to make them more valuable. Leading pulp and paper producers are still attempting to valorize kraft lignin, though according to Lux Research, these projects are all “longshots” for adoption. Crude lignin oil offers another sustainable crude oil option, but is unlikely to outcompete pyrolysis oil, according to Lux Research. Lux further expects MPPs to represent the largest, most competitive opportunity for success. While alternative pulping products cannot compensate for paper market contractions, the company predicts that fast-acting, innovative companies will indeed be able to survive.

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