Bloomberg Intelligence has once again estimated a significantly lower OCC recycling rate than the paper manufacturing sector, and it revised past years’ rates with an updated methodology.
Ryan Fox, a corrugated market analyst at Bloomberg Intelligence – the research arm of financial and media giant Bloomberg LP – estimated the U.S. OCC recycling rate in 2023 was 66%. Last year he estimated a rate of 69% for 2022 but has since revised that to 63% and his 2021 figure to 62%.
“The wonderful thing about data science is as you get new information, you are free to revise your methodology,” Fox told Resource Recycling. “We did have a slightly higher number last year, but we reformatted it a little bit, because we felt like with broader understanding comes a chance for us to recalibrate and be more transparent with what’s happening.”
The American Forest & Paper Association has not yet reported its 2023 OCC recycling rate, but in 2022 it reported a traditional rate of 91.4% and an effective rate of between 80% and 85%.
Fox’s data takes into account boxes that come into the U.S. holding imported goods, which are not accounted for in AF&PA’s data, as it says there is not enough reliable data. Fox uses reports from publicly traded retailers, nationwide recycling program analysis from The Recycling Partnership, state-level waste studies, Bloomberg’s own data and other sources.
Fox said his method also accounts for removing the prohibitives, outthrows, moisture and double-lined kraft corrugated cuttings, which he does not believe AF&PA takes into account.
To calculate the imported box volume, Fox used National Retail Federation reports to find how many 20-foot-equivalent-unit containers were imported into the U.S. for retail, and used an estimate from Investopedia that 75% of the world’s goods are transported in corrugated boxes. He then calculated the amount of material based on his best estimate of average box size and weight.
He said he is working to gather more data on the imported box numbers and further improve his calculations.
AF&PA’s data is widely cited, including by the U.S. EPA, which uses it to help calculate the national recycling and disposal rates, including how much OCC is landfilled each year. AF&PA has stood by its methodology in the past; the group didn’t immediately return a request for comment on the new numbers.
2023 changes
Fox said while the rate did technically increase year over year, that’s partially because the denominator (which includes containerboard produced plus imports, minus exports) shrank as consumer spending fell, depressing demand for containerboard.
“The improvement is really a factor of a shrinking denominator more than it is about expanded collections,” Fox said. But recycling does seem to be holding steady despite the production dips, he added.
“Box production has fallen about 8%, and the fact that we don’t see that huge drop off in collections is a pretty good indicator that the recycling system is holding up really well,” Fox said, noting around 80% of OCC comes from mass merchants and grocery stores, a highly concentrated market that’s more robust than residential recycling.
“I don’t know if we’re seeing a huge swing quite yet in residential,” Fox said. “It’s getting better, but not enough to make that kind of a difference.”
