The Role of Scrap Circularity in Sustainable Ecosystems

Sustainable materials management and the large-volume recycling of paper and fiber- based packaging waste is big business. So-called scrap has become a revenue stream that annually contributes some $6 billion to the U.S. economy. According to Recycling Today, companies are finding that efficient scrap management not only reduces disposal costs and retains billions of dollars in material value that would otherwise be lost to landfill, but also supports operational cost efficiencies for paper-intensive businesses.

How so, you wonder? By freeing up personnel and better utilizing capital-equipment budgets, operational productivity is optimized. As opposed to being occupied by packaging waste, these businesses conserve available warehouse space and maximize it for inventory purposes. Such prime space is quite valuable, now costing an average of nearly $9 per square foot. in some markets, per research from Brown West Logistics.

The printing, package converting and e-commerce fulfillment industries generate substantial volumes of pre-consumer paper and cardboard scrap. Waste management can constitute up to 20% of a company’s total operating expenses in these sectors, according to the EPA’s Advancing Sustainable Materials Management Report (2023). Significant resources, including investments in people and processing equipment, are needed to handle and dispose of all this material. This translates to increased labor costs for companies that manage large volumes of scrap, confirms the U.S. Bureau of Labor Statistics. In print production environments, labor accounts for approximately 35% of total costs (per the National Association for Printing Leadership).

The required manual handling and processing limit these businesses from engaging in more value-added, core production activities, which in turn, reduces overall productivity. As a cost of doing business, the need to manage scrap increases overhead costs, too, while not directly contributing to bottom-line revenue generation. The American Forest & Paper Association (AF&PA) notes that companies often face substantial overhead costs related to the storage, transportation and processing of scrap materials. So, you might want to take some notes if you are responsible for:

• Sustainability and Environmental, Social & Governance (ESG) programs
• Packaging or procurement
• Logistics and warehousing
• Waste disposal and management

Circular Material Value

Efficiently managing scrap has value environmentally as well as economically. Benefits of recycling include reducing landfill waste and conserving natural resources. Sustainable materials management, especially in relation to resource efficiency and circular economy practices, plays a crucial role in minimizing environmental impact, according to the Ellen MacArthur Foundation. Managing materials such as paper and old corrugated containers (OCC) within a circular economy framework can reduce the need for virgin resources and lower emissions as well as create economic value from scrap materials.

International Paper’s core packaging products are made with pulp, which is a naturally renewable fiber. Recyclability is integral to IP’s goal of advancing circular solutions throughout the value chain and creating innovative products. “Our boxes are designed to be recovered, recycled and reused,” Sophie Beckham, VP and Chief Sustainability Officer, explains in IP’s latest sustainability report. “Over the past decade, I’ve seen sustainability become an important value driver for our customers, reinforcing our business model.

“During this time, consumers have grown more aware of how their choices impact the environment,” Beckham continues, “creating demand for our renewable fiber-based products.” Between 69-74 percent of corrugated packaging used in the U.S. now is recovered for recycling.

Indeed, circular economy principles increasingly are being integrated into supply chain management. Circular sustainable models, processes and economic systems focus on such reuse and waste elimination. This shift has reoriented focus from only efficiency and waste reduction to broader concepts such as redesign and product transformation. Adopting these practices allows companies to enhance their contributions to sustainability by optimizing material use, including paper and OCC scrap, which can be turned into valuable resources, report Swiss scientific publishers MDPI and Springer Nature.

When optimized, sustainable closed-loop supply chains are more cost-effective and yield profits, too, through resource efficiency and waste reduction. Springer reports that, by optimizing processes, organizations can achieve significant economic benefits, including enhanced productivity and cost savings. In addition to lowering overall costs, by continuously recycling materials (paper and cardboard), companies can:

1. Reduce the need for virgin resources.
2. Create new revenue streams from what would otherwise be waste.

Life Cycle Costing (LCC) and Life Cycle Analysis (LCA) studies reveal that closed-loop recycling systems can lead to considerable cost savings by reducing the need for raw material acquisition and lowering disposal costs. These studies emphasize the financial benefits of reusing materials within the production process, Springer reports, thereby increasing the overall productivity of manufacturing operations. By integrating circular practices, organizations can optimize their supply chains, reduce waste and enhance the bottom line.

True circularity uses each link of the fiber value chain to extract full economic, sustainable and business value for all parties involved. Integrated logistics capabilities need to stay flexible and be reliable, which is why International Paper Recycling maintains a company-operated fleet and partners with other trusted providers to ensure that recyclable fiber is collected on time and sent to the right end-use manufacturer—which most often is our own paper mills—at the lowest possible cost. This robust scale makes for a partnership that is less exposed to market fluctuations.

Don’t throw away recycling’s business proposition

Savvy executives and managers strive to position recycling as an upfront business consideration, not as an afterthought. Profits rise when they streamline the material handling and recycling of paper, cardboard and other scrap/trim/waste. While dumping used paper may seem convenient, the costs can add up. Based on material weight, average tipping (gate) fees at U.S. landfills now exceed $54 per ton, according to the Environmental Research & Education Foundation. Of course, that’s not accounting for the negative impact on the environment. “Our ultimate goal is to establish landfill free rates,” explains Lesley Schlesinger, Recycling Area Manager for IP’s East Region.

But why spend money on fees when you can sell scrap and make money? Paper mills purchase recycled fiber by the ton. Depending on the grade, trim from mixed paper and old corrugated containers (OCC) can fetch anywhere between $40 and $70 per ton, according to RecyclingMarkets.net. Each year, International Paper Recycling’s global network of recycling collection, processing and mill facilities handle more than 7 million tons of post-industrial and consumer-use scrap paper.

In the future, “sustainability points and carbon-savings reporting are coming from IP,” says National Accounts Manager Laura Hannah. For example, recycling partners will be able to measure the carbon-offset reductions that a given number of loads represent.

When it comes to managing scrap, there are several ways in which International Paper Recycling’s “Sustainability in Motion®” services and technological innovations can enhance productivity:

1. Outsourcing the management of paper and cardboard scrap, trim and waste frees up internal company resources.
2. International Paper’s waste-management technologies and equipment placement options can streamline the recycling process and reduce labor costs.
3. Customized solutions are tailored to meet the specific needs of different industries.
4. Advanced recycling techniques can improve fiber recovery and reduce chemical processes. AF&PA provides data for packaging designers and consumer brands to better understand how non-fiber elements, such as coatings and additives, impact the recyclability of paper-based packaging. (Download the AF&PA Design Guidelines for Recyclability.)

Carbon’s smaller trail

International Paper knows it is important to balance new and recycled fiber in sustainable packaging. While recycled fiber is crucial, virgin fiber from sustainably managed forests plays an equally vital role in the circular economy. Containerboard producers presently use approximately 56 percent recycled fiber in production.

Studies show that fiber is not infinitely recyclable without significant strength loss. On an industry-wide level, containerboard made from 100 percent recycled fiber increased from 22.3 percent to 31.8 percent. The combination of new and recycled fibers maximizes reuse potential and enables true circularity in the wood fiber value chain. (Download the IP White Paper).

As part of the 2030 pledge, IP’s vision is to source 100% of fiber from sustainably managed forests and recovered fiber.

The challenge in 2026 is to turn paper and cardboard scrap into a valuable revenue stream.

The development of circular economy models, particularly in the recycling sector, presents significant opportunities for economic growth. Companies invested in recycling infrastructure and sustainable materials management have seen improvements in operational efficiency and profitability, confirms NY investment firm Closed Loop Partners. The transformation of scrap into valuable resources, coupled with strategic recycling partnerships, can reduce costs and enhance productivity by ensuring a consistent supply of high-quality recycled materials, they report.

Forging a recycling partnership can help to maximize the economic value of scrap. | See sidebar, “Maximizing Scrap’s Value: A Quick Guide for Printers and Packaging Converters.” By outsourcing the management of paper, cardboard and other scrap/trim/ waste materials to a reliable partner like International Paper Recycling, companies can reduce overhead costs and focus resources on core production activities. Explore how “Sustainability in Motion®” services can be tailored to fit your company’s needs. Contact IP for a consultation on optimizing their scrap management and enhancing productivity.