The COVID-19 pandemic has had a significant impact on people’s lives and purchasing habits, but the one product that seemed to benefit from the pandemic and flew off the shelves before we even understood what the full impact of COVID-19 was … toilet paper.
This basic necessity has a close connection to Ontario’s recycling system, more specifically, to the recycling of cartons. While most Ontario municipalities accept cartons in their residential recycling programs, the marketing of carton loads hasn’t always been consistent. Carton pricing experienced a boom during the first few months of the pandemic, but then started to decline in June. While there are many contributing factors to this decline, one factor that has been raised by brokers and end markets is the presence of duplex or “brown” board in cartons. Understanding the make-up and end markets for cartons will help municipalities assess how duplex board may impact their programs.
Cartons are most commonly associated with milk and juice products. There are two types of cartons:
- Refrigerated cartons, also referred to as gable-top cartons; and
- Shelf-stable cartons, also referred to as aseptic cartons.
Both types of cartons consist of a paperboard middle layer for stability, sandwiched between an inner and outer polyethylene layer that act as liquid barriers. Aseptic cartons are slightly different as they have an additional polyethylene and aluminum layer between the paperboard and the inner most polyethylene layer that provides a light and an oxygen barrier. This additional layer is what allows aseptic cartons to be shelf-stable and enables products sold in aseptic cartons to be filled and shipped at ambient temperature (without the need for refrigeration). With a longer shelf life, the products can be shipped long distances at a lower financial and environmental cost.
These unique properties have spawned the introduction of a wide range of products sold in cartons including exotic juices, eggs, soups, broths and water. While the multi-layers within cartons provides significant benefits to consumers and the types of products that can be sold in them, it’s these multiple layers that make the recycling of cartons more challenging. However, with significant investment from the industry over the years, bales of cartons, commonly referred to as PSI-52 (i.e., the Paper Stock Industries grade for cartons), are sold to various buyers across Canada, the USA, Mexico, South Korea, India and Vietnam.
Why carton prices jumped during the pandemic
Primary buyers of used cartons have been mills either making tissue and toweling products, or mills producing pulp for tissue and toweling production. These mills value the bleached board (i.e., white fibre) which is the primary component in most cartons to make various consumers goods including our precious toilet paper. It is often purchased as a lower cost alternative to Sorted Office Paper (SOP) which is normally purchased from commercial recycling sources. So, COVID-19 created the perfect conditions for municipalities marketing cartons during a reduction in generation and availability of grades like SOP, and while there was an increased demand for products like toilet paper. Demand and value for baled post-consumer cartons increased as well.
However, now as life and fibre demands return to normal, some municipalities are seeing pricing for cartons slow down with some of this decline being attributed to duplex or “brown” board in carton. Duplex board, which is an unbeached board similar to what you might find in a cereal box, are creating some challenges for mills. Given that it is unbleached, the duplex board affects the brightness of the various products mills are making, including toilet paper.
Why duplex over bleached white paperboard?
Duplex board can provide greater functionality and strength for more complex and larger formats.
The type of carton paperboard, either bleached or duplex, is primarily driven by the local paperboard that is available. In the US, it is primarily a bleached paperboard. It is a misconception that the presence of duplex board in cartons in Ontario is due to cost-cutting measures. Cartons with duplex board are deployed here due to certain size and performance requirements.
Duplex board has been around for years, but as consumers shift their purchasing habits and retailers look to meet various demands for unique items that may be filled in other parts of the world, there is a possibility we will see more duplex board. Two of the papermills that buy cartons from Ontario municipalities, Great Lakes Tissue and Sustana, have both indicated that duplex board poses a challenge for them in their operations. They can only handle small volumes and it will need to be blended with other bleached paperboard to maintain their brightness standards.
It’s not that we can’t use cartons with duplex board, it’s more about maintaining our brightness standards. Cartons with duplex board require additional bleaching, so our pricing will reflect this additional process. Currently, our operations can handle up to 10% of cartons with the duplex board, but we will prioritize loads where we know the amount of duplex is lower.
What does it mean for Ontario municipalities?
For most municipalities and their MRF operators, there is no easy way to differentiate cartons with bleached paperboard versus the duplex board. Fortunately, cartons with duplex board make-up only a small portion of the overall cartons supplied in Ontario. “On average in Canada, it’s about 10% of the used carton mix from a residential (i.e., curbside) system” says Isabelle Faucher, Managing Director for the Carton Council of Canada (CCC). When asked about the market issues, she says, “We are aware duplex cartons can cause some issues in pricing or movement for municipalities, and we are in discussion with affected stakeholders when issues arise”. Additionally, she also highlighted Continuus Materials based in Iowa as another buyer of post-consumer cartons that is “colour neutral” (i.e., where the fibre colour is not an issue), and they can recycle the full carton including the polyethylene and aluminum layers to make building products. CCC is also expecting another similar end market to come online in the northeastern US by the end of this year. This will provide an additional buyer for municipalities selling baled cartons.
At this time, the decline in pricing for cartons is more linked to the decline in pricing for all fibre commodities due to weakening demand for these products. This allows end-markets to be a little more selective in their pricing. However, carton bales should still continue to move. CCC indicated they can support all stakeholders to address carton recycling concerns, and stakeholders should contact Isabelle Faucher, if issues arise.