A Research Report by the Book Industry Environmental Council Prepared by Green Press Initiative

BOOK INDUSTRY ENVIRONMENTAL TRENDS 206 A Research Report by the Book Industry Environmental Council Prepared by Green Press Initiative

INTRODUCTION AND EXECUTIVE SUMMARY Tracking environmental trends in the U.S. book industry remains a key priority of the Book Industry Environmental Council (BIEC). This study is the fourth assessment of environmental trends and impacts of the U.S. book industry. The first assessment was published by Green Press Initiative and the Book Industry Study Group in 2008 (using 2006 survey data) and subsequent surveys have been carried out by the Book Industry Environmental Council. The most recent survey is based on surveys of book publishers, printers and paper manufacturers conducted in 205 and requesting data from 204. While previous surveys have attempted to get useful data from publishers and printers, the previous round (requesting data from 202) failed to generate enough responses to garner useful information from these sectors of the book industry. As a result, the surveys for book publishers and printers were substantially changed in 205 to make the surveys shorter and easier to answer. Questions asking about the amount of paper used, how much was certified to different standards, and the average recycled content, were replaced with simplified questions that aimed to identify whether or not different types of fiber and certified paper were used in 204, and if so, whether the survey participant expected their company to use more, less or the same amount of each in 205. Questions asking about the company s environmental policies and other environmental goals and commitments were consistent with those asked in previous years. As in previous years, paper manufacturers were again asked to provide specifics about the quantity of book paper produced and the percentages of recycled fiber and third party certified paper. With data spanning across nearly a decade it is possible to see long term trends and changes regarding key environmental metrics. This historical data provides substantial context for the most recent survey data and for future surveys. One of the most notable trends from the data in the current surveys is the continued decline in the use of recycled fiber in book papers. After increasing rapidly between 2004 and 2009, the average recycled content in book papers reported by paper manufacturers leveled out between 2009 and 200 and decreased slightly by 202. The most recent data show that not only has the downward trend in recycled fiber in book papers continued, but it has decreased at an accelerating rate with average recycled content from participating manufacturers dropping from 22% recycled fiber in 202 to just 2% in 204. Many within the industry believe that a large contributor to this decrease is the increasing trend towards single stream curbside recycling a practice which results in greater contamination and lower usable fiber yield (especially for the production of fine printing paper used in books). Such contamination ultimately increases the cost of producing high-quality recycled printing and writing grades. As a result, certain companies that produce recycled book grades either reduced the recycled content of those grades or stopped making recycled book papers. We offer more on this trend in the conclusion of the report. WITH DATA SPANNING ACROSS NEARLY A DECADE IT IS POSSIBLE TO SEE LONG TERM TRENDS AND CHANGES REGARDING KEY ENVIRONMENTAL METRICS.

TRENDS IN RECYCLED FIBER IN BOOK PAPER PERCENTAGE RECYCLED FIBER Additionally the percentage of book papers that are certified by the Forest Stewardship Council has decreased for the first time since efforts to track its use in books began in 2006; and the decrease was dramatic, especially considering the rapid increase in FSC certified book papers in previous years. TRENDS IN FSC CERTIFIED PAPER YEAR PERCENTAGE OF FSC CERTIFIED PAPER YEAR In total, when considering all types of certification, there was a dramatic decrease between 202 and 204. Book papers that were certified by any certification system decreased to 47% from a high of 8% in 200. Of note, the decreases in recycled fiber and certified paper were reflected in grades reported by manufacturers as paper suitable for use in books. This may not directly reflect paper that was used by publishers, however, the declines reflect a need for all in the book industry collaboratively to consider what has changed and to identify new opportunities to increase the use of recycled and certified paper. The following sections outline the full results of the surveys for publishers, printers and paper manufacturers. They also highlight current environmental initiatives and future expectations regarding the use of environmentally responsible paper and other environmental trends. 3

PUBLISHER RESPONSES In total publishers participated in the survey. While the largest number of responses came from midsized publishers (revenues of $0-$00 million) three participating publishers had revenues of over $00 million with two of the three having annual book revenues greater than $500 million. WHAT WERE YOUR COMPANY S TOTAL REVENUES FROM PUBLISHING BOOKS AND COLLATERAL PAPERBOARD PRODUCTS IN 204? NUMBER OF RESPONSES 4 3 2 RANGE IN ANNUAL BOOK REVENUES Based on responses. All participating publishers used recycled paper in 204, and the vast majority (82%) expected to use the same amount of recycled paper in 205, while 8% expected to use more recycled paper in 205 than in 204. None of the participating publishers expected to use less recycled paper in 205 and none used agricultural or alternative fiber in 204. Nearly all of the participating publishers (9%) used FSC certified paper in 204, and as with recycled fiber, the majority expected to use the same amount of FSC certified paper in 205, though a relatively larger percentage of those using FSC certified paper expected to use more in 205 (40%). A slight majority of publishers (55%) used SFI or PEFC certified paper in 204 and of those publishers most (83%) expected to use the same amount in 205, with the remaining publishers expecting to use more SFI or PEFC certified Paper in 205. Only two publishers reported their company having a specific recycled fiber target for the year 2020 or sooner. One in the range of % to 5% and one in the range of 2% to 25%. Three publishers reported having a policy with a general goal to increase recycled fiber but no specific target and one had a specific target, but the timeline extended beyond 2020. 4

Four publishers indicated their company s environmental policy had a specific target for increasing third party certified paper and all of those targets were in excess of 90%. An additional three publishers reported that their corporate policy included a general goal to increase the use of third party certified paper, but not a specific target. The charts and tables below summarize additional finding from the publisher surveys. PUBLISHER FIBER/PAPER USAGE 00% 0% 8% 82% 0% 9% 9% 40% 60% 0% 55% 45% 7% 83% 0% Based on responses. ARE THERE ANY OTHER CONSUMPTION BASED OR OTHER PAPER RELATED INITIATIVES THAT YOUR COMPANY HAS IMPLEMENTED TO REDUCE ENVIRONMENTAL IMPACTS? Based on responses. 5

IF YOUR COMPANY HAS IMPLEMENTED OTHER CONSUMPTION BASED OR PAPER RELATED INITIATIVES TO REDUCE ENVIRONMENTAL IMPACTS, WHICH OF THE FOLLOWING HAS YOUR COMPANY IMPLEMENTED: (SELECT ALL THAT APPLY) 4 3 2 Based on 5 responses. DOES YOUR COMPANY CURRENTLY POSSESS CHAIN OF CUSTODY CERTIFICATION FROM ANY OF THE FOLLOWING? CHECK ALL THAT APPLY. 7 3 0 0 0 0 IF YOUR COMPANY DOES NOT CURRENTLY POSSESS CHAIN OF CUSTODY CERTIFICATION FROM ANY OF THE CERTIFICATION SYSTEMS IN THE PREVIOUS QUESTION, ARE THERE ANY FUTURE PLANS TO DO SO? 6

EXPLANATIONS FOR WHY COMPANY DOES NOT HAVE CHAIN OF CUSTODY CERTIFICATION Not company policy We are currently satisfied with using the printer s certification and do not see an advantage to becoming FSC certified ourselves. Don t believe it is a priority at this time. Not necessity at this time Don t know what it is ENVIRONMENTAL POLICIES AND CARBON FOOTPRINT 64% 36% 50% 25% 25% 36% 64% 83% *Based on responses **Based on 4 response indication they do not currently have an environmental policy 7

WHICH OF THE FOLLOWING BEST DESCRIBES YOUR COMPANY S PROGRESS TOWARDS ACHIEVING THE RECYCLED FIBER GOAL IN ITS POLICY? Based on 8 responses. The one company reporting that it was not on track to meet recycled fiber goals in its policy indicated this was due to capacity and availability. WHICH OF THE FOLLOWING COUNT TOWARDS CERTIFIED PAPER TARGETS SPECIFIED IN YOUR COMPANY S POLICY? 7 4 2 3 0 0 Based on 8 responses. WHICH OF THE FOLLOWING BEST DESCRIBES YOUR COMPANY S PROGRESS TOWARDS ACHIEVING THE CERTIFIED PAPER GOAL IN ITS POLICY? Based on 7 responses. 8

FIBER TESTING 27% 73% 67% 33% 67% 33% *Based on Responses **Based on 3 responses indicating they did fiber testing DOES YOUR COMPANY CONSIDER PRINTER LOCATION AND YOUR COMPANY WARE- HOUSE LOCATION(S) WHEN MAKING PRINTER CHOICES? Based on responses. HOW DOES THE MAJORITY OF YOUR PAPER SHIP TO THE PRINTING LOCATION(S)? Based on responses. 9

PRINTER RESPONSES In total 2 printers participated in the survey with the largest number of participants having book-related revenues in the range of $50 million to $00 million as indicated in the chart below. WHAT WERE YOUR COMPANY S TOTAL REVENUES FROM PRINTING BOOKS AND COLLATERAL PAPERBOARD PRODUCTS IN 204? 5 NUMBER OF RESPONSES 4 3 0 0 RANGE IN ANNUAL BOOK REVENUES Based on 2 responses. All participating printers used recycled paper in 204, with three quarters expecting to use more recycled fiber in 205 and one quarter expecting to use the same amount. As with recycled fiber, 00% of participating book printers used FSC certified paper in 204 with the majority (67%) expecting to use the same amount in 205, and a quarter expecting to use more. One of the 2 participating printers expected to use less FSC certified paper in 205 and cited a lack of demand from customers as the reason for this expectation. Three quarters of participating printers reported using SFI or PEFC certified paper in 204 and of those 67% expected to use more in 205. Interestingly a substantial minority (22%) of printers using SFI or PEFC certified paper in 204 expected to use less in 205, while % expected to use more. As with participating publishers, none of the printers who participated in the surveys used agricultural or alternative fiber in 204. 0

Only two printers reported specific targets for increasing the use of recycled fiber one in the range of 6% to 20% and one in the range of 25% to 30%. Similarly, only one printer reported having a specific target for third party certification with a goal in the range of % to 20%, while three reported that their corporate policy included a general goal to increase the use of third party certified paper but set no specific target. The charts and tables below summarize additional findings from the printer survey regarding paper usage, other environmental initiatives and environmental policies and goals. PRINTER FIBER/PAPER USAGE 00% 0% 25% 75% 0% 00% 0% 25% 67% 8% 75% 25% % 67% 22% Based on 2 responses. ARE THERE ANY OTHER CONSUMPTION BASED OR OTHER PAPER RELATED INITIATIVES THAT YOUR COMPANY HAS IMPLEMENTED TO REDUCE ENVIRONMENTAL IMPACTS? Based on 2 responses.

WHICH OF THE FOLLOWING OTHER CONSUMPTION BASED OR PAPER RELATED INITIA- TIVES TO REDUCE ENVIRONMENTAL IMPACTS HAS YOUR COMPANY IMPLEMENTED: 3 0 Based on 4 responses. The respondent indicating other indicated the company recently implemented a new press that reduces waste. IF YOUR COMPANY HAS NOT IMPLEMENTED OTHER CONSUMPTION BASED OR PAPER RELATED INITIATIVES, ARE THERE ANY FUTURE PLANS TO IMPLEMENT OTHER CONSUMP- TION BASED OR OTHER PAPER RELATED INITIATIVES? Based on 8 responses. EXPLANATION OF WHY THERE ARE NO FUTURE PLANS TO IMPLEMENT OTHER CONSUMPTION BASED OR OTHER PAPER RELATED INITIATIVES? We do what our customers ask us to do. Because most our customers purchase the paper. We are already at zero landfill status and use certified papers, soy inks, etc. - there isn t much else we can do to improve from an environmental perspective. Need to use most cost effective materials to meet customer needs. 2

DOES YOUR COMPANY CURRENTLY POSSESS CHAIN OF CUSTODY CERTIFICATION FROM ANY OF THE FOLLOWING? CHECK ALL THAT APPLY. 5 0 2 0 Based on 2 responses. The one printer that does not possess any third party chain of custody certification indicated that they do not plan to obtain any type of certification in the future and discontinued certification due to lack of customer demand. WHAT TYPES OF INK DOES YOUR COMPANY USE? Ecopride various, EPTS various, Arroweb heatset, EP Dense Book Black Heat set black ink, CMYK sheetfed ink, CMYK UV inks Soy inks Black carbon ink and sheet fed process and PMS color ink. Match color ink for four color process. Heatset web offset inks (soy based) and UV 4/c process inks Soy inks and solvent based inks Heat offset ink Soy based UV inks Process ink for sheet-fed presses, UV and heat-set black ink for web presses Standard offset press inks, Inkjet inks DO ANY INKS USED BY YOUR COMPANY IN 204 CONTAIN VOCS (VOLATILE ORGANIC COMPOUNDS)? Based on 0 responses. Based on responses. 3

PRINTER ENVIRONMENTAL POLICIES AND CARBON FOOTPRINT 67% 33% 50% 25% 25% 42% 58% *Based on 2 responses. **Based on 4 responses. WHICH OF THE FOLLOWING GOALS OR REQUIREMENTS ARE INCLUDED IN YOUR COMPANY S POLI- CY TO HELP REDUCE THE SOCIAL AND ENVIRONMENTAL IMPACTS OF FIBER/PAPER USED IN BOOKS? 3 2 2 2 0 0 0 Based on 8 responses. 4

WHICH OF THE FOLLOWING BEST DESCRIBES YOUR COMPANY S PROGRESS TOWARDS ACHIEVING THE RECYCLED FIBER GOAL IN ITS POLICY? Based on 8 responses. WHICH OF THE FOLLOWING COUNT TOWARDS CERTIFIED PAPER TARGETS SPECIFIED IN YOUR COMPANY S POLICY? CHECK ALL THAT APPLY. 4 2 2 0 0 0 0 Based on 8 responses. WHICH OF THE FOLLOWING BEST DESCRIBES YOUR COMPANY S PROGRESS TOWARDS ACHIEVING THE CERTIFIED PAPER GOAL IN ITS POLICY? Based on 8 responses. 5

GOALS INCLUDED IN POLICY FOR REDUCING GREENHOUSE GAS EMISSIONS BY 2020 OR SOONER 4 2 2 0 0 0 0 0 0 0 0 0 0 0 0 Based on 8 responses. DOES YOUR COMPANY CONSIDER MILL LOCATION WHEN MAKING PAPER CHOICES? Based on 2 responses. HOW DOES THE MAJORITY OF YOUR PAPER SHIP TO YOUR PRINTING LOCATION(S)? Based on 2 responses. 6

PAPER MANUFACTURER RESPONSES In total 9 manufacturers of book paper participated in the survey with the largest number reporting book paper revenues of $00 to $250 Million. One participant had book paper revenues in excess of $500 million while the remainder had book paper revenues of $50 million or less as indicated in the chart below. WHAT WAS YOUR COMPANY S ANNUAL REVENUE FROM BOOK PAPERS IN 204? NUMBER OF RESPONSES 3 2 2 0 ANNUAL BOOK PAPER REVENUES Based on 9 responses. As with previous years paper manufacturers were asked for specific numbers regarding the tonnage of book paper produced, the percentage of recycled fiber used in those papers, and the amount of paper that is certified to different third party standards. Because paper manufacturers do not usually know what the end use will ultimately be for the paper they produce, as in previous years, the surveys for paper manufacturers requested that they report on grades suitable to be used in consumer book manufacturing. In total participating manufacturers accounted for 70,570 of book paper as defined previously*. This represents approximately 79% of the 900,000 tons of book paper used by the U.S. book industry in 204 according to RISI estimates. Virgin tree fiber accounted for 88% of fiber reported by paper manufacturers with total recycled content (preconsumer plus postconsumer) accounting for the remaining 2%. None of the participating manufacturers reported using agricultural or alternative fiber to manufacture book papers in 204. In total, 48% of the book paper reported by participating manufacturers was third party certified with 28% certified by the Forest Stewardship Council. The weighted average for various types of third party certification are detailed in the table on the next page. * Tonnage from one participating paper manufacturer was excluded because the data appeared anomalous and efforts to get additional clarifying information from the manufacturer were unsuccessful.

FIBER SOURCE AND THIRD PARTY CERTIFICATION Based on 8 responses. As indicated in the Charts below both the percentage of recycled fiber used in book papers and the percentage of papers that are FSC certified are dramatically lower in 204 than they were in recent years. TRENDS IN RECYCLED FIBER IN BOOK PAPER PERCENTAGE OF RECYCLED FIBER YEAR TRENDS IN FSC CERTIFIED PAPER PERCENTAGE OF FSC CERTIFIED PAPER YEAR 8

Nearly all fiber used by participating manufacturers was sourced from North America, though a small amount (about 5%) was sourced from South America. GEOGRAPHIC SOURCE OF FIBER Based on 8 responses. All of the participating manufacturers had FSC chain of custody certification and most also had chain of custody certification from SFI and PEFC. DOES YOUR COMPANY POSSESS CHAIN OF CUSTODY CERTIFICATION FROM ANY OF THE FOLLOWING? SELECT ALL THAT APPLY. 9 8 7 0 CERTIFICATION TYPE Based on 9 responses. The charts and tables below summarize additional responses of paper manufacturers regarding environmental initiatives, policies and goals. HAS YOUR COMPANY CALCULATED ITS CARBON FOOTPRINT? Based on 9 responses. 9

DOES YOUR COMPANY HAVE AN ENVIRONMENTAL POLICY OR HAS YOUR COMPANY OTHERWISE COMMITTED TO ENVIRONMENTAL GOALS? Based on 9 responses. PLEASE SELECT THE OPTION THAT BEST DESCRIBES THE RECYCLED FIBER GOALS OF YOUR COMPANY S ENVIRONMENTAL POLICY: 5 2 0 0 0 0 0 0 0 0 0 0 Based on 8 responses. 20

WHICH OF THE FOLLOWING GOALS OR REQUIREMENTS ARE INCLUDED IN YOUR COMPANY S POLICY TO HELP REDUCE SOCIAL AND ENVIRONMENTAL IMPACTS OF BOOK PAPERS PRODUCED? 6 6 5 5 3 2 2 2 0 Based on 9 responses. PLEASE SELECT THE OPTION THAT BEST DESCRIBES THE CERTIFIED FIBER GOALS IN YOUR COMPANY S ENVIRONMENTAL POLICY: 3 0 0 0 0 0 0 0 Based on 9 responses. 2

WHICH OF THE FOLLOWING CERTIFICATION STANDARDS COUNT TOWARDS THE CERTIFI- ATION TARGET IN THE PREVIOUS QUESTION? 7 4 4 3 3 Based on 8 responses. GOALS INCLUDED IN POLICY FOR REDUCING GREENHOUSE GAS EMISSIONS BY 2020 OR SOONER 3 2 0 0 0 0 0 0 0 0 0 22

CONCLUSION AND COMMENTARY The data from the most recent surveys (particularly the paper manufacturer surveys) evidence large decreases in both the use of recycled fiber and the amount of FSC and other third party certified papers compared to 202. This negative trend directly contradicts the expectations of publishers and printers, most of whom expect to use the same amount or more recycled and certified fiber/paper in the future. We thus want to explore it more. RECYCLED FIBER DECLINE While the percentage of recycled fiber in book papers reported by manufacturers appeared to level off and even decline slightly in previous surveys of paper manufacturers, the recent decline is considerably sharper than that indicated in the previous surveys. Additionally, the steep decline in recycled fiber reported by paper manufacturers appears inconsistent with the expectations of most publishers, the majority of whom expect to continue using the same amount of recycled fiber. The steepening of this trend and this inconsistency may in part be due to the interpretation of the manufacturer survey s request to report on paper that is suitable for use in manufacturing books. The wording of this question makes it likely that paper manufacturers included large quantities of paper that COULD have been used to make books but that were ultimately used for other purposes. [It s important to note that while paper manufacturers were asked to report on paper suitable to be used in books, the publishers and printers who responded were reporting on paper that actually was used to manufacture books]. The AF&PA reports that paper used for book publishing accounts for only about 4.3% of all printing and writing paper grades. Though a much larger portion of printing and writing paper is suitable for use in books. BOOK PUBLISHING PAPERS As a percentage of total printing & writing shipments in the U.S. 204 Uncoated Free Sheet Uncoated Groundwood Coated Freesheet Coated Groundwood All Printing and Writing Paper Tons Printing and Writing Paper * Tons Book Paper 8,002,200 85,500 2,849,300 0,900,66,700 3,7,000 6,79,200 Book Paper % of Total 2.30% 79,300.0% 695,400 4.30% 228,700 6.0% 3.50% * These numbers are 204 U.S. shipments (short tons) - does not include shipments from Canada As a percentage of total paper shipments in the US Source: AF&PA 23

This nuance may have caused the decline in the use of recycled paper in books to appear greater than the reality. However, there are also several real challenges facing book publishers and printers who wish to increase or even maintain current levels of recycled fiber. And while this survey did not ask about the reasons for recycled fiber declines at the paper manufacturer level, the BIEC has explored and discussed this topic internally with several authorities over time. Causes point to () increased contamination from single stream recovery and mixed waste processing centers; (2) reduced availability of fiber due to shrinking paper consumption and competition for recycled fiber with overseas markets (particularly China); (3) capacity closures of deinking facilities; and (4) production shuts of paper mills or machines that produced high recycled content grades (i.e. FutureMark Paper [September 204] and Manistique [March 205]).. Single Stream Recycling has become a serious problem for paper manufacturers who produce fine printing paper for many reasons: a. The fiber required for making fine printing paper needs to be especially clean, and single-stream fiber is obviously highly contaminated. This contamination reduces yields for the de-inking facilities effectively raising costs. b. Sorting high quality fiber from the single stream is expensive and less effective such that it produces less good fiber than pre-sorted streams. c. Paper fiber is inherently not as valuable as say metal in the recycling stream (or as easily sortable) - which doesn t help in the recovery effort. d. Naturally absorbent paper fiber tends to take on moisture weight in the single stream which again reduces yield and increases freight in transporting the sorted fiber. 2. Availability of recyclable fiber for use in the production of recycled fine printing paper grades has been reduced partially because paper consumption in N.A. is so far off of historical highs, and because the fiber that is available is in high demand by overseas markets who are fiber poor. Even though the most recent AF&PA statistics report fiber recovery at almost 67%, the amount of paper being used and consumed continues to decline. As consumption falls, so does the availability of high quality recyclable fiber for these grades. And the fiber that is recovered (often contaminated) is in high demand from overseas markets (particularly China) who don t have enough virgin fiber to feed their demand. 3. The net effect of the above dynamic has been the closure of de-inking facilities and recycled paper machines / mills. Some of the remaining recycled paper producers have reduced the amount of recycled fiber in their grade offerings. Only a few specialty mills are able effectively to make high-quality recycled grades with a lot of recycled content, but those grades are often considered specialty and may be priced as such relative to their virgin fiber alternatives. THERE ARE SEVERAL REAL CHALLENGES FACING BOOK PUBLISHERS AND PRINTERS WHO WISH TO INCREASE OR EVEN MAINTAIN CURRENT LEVELS OF RECYCLED FIBER. 24

CERTIFIED FIBER DECLINE Perhaps more surprising to us was the dramatic decrease in the percentages of papers suitable for book printing that were FSC certified or certified by other certification bodies. This is particularly so because previous surveys have only showed an accelerating trend towards greater percentages of FSC and other certified paper. Further, the other two sectors of the book industry who were surveyed, the publishers who ultimately control their paper s end use, and printers who have to make the paper substrates work through their presses, both noted that they expect to use the same or more certified fiber going forward. As with the recycled discussion above, it s possible that part of this decline can be attributed to the wording of the questions. But industry insiders point to a nuance in certification labeling as another possible reason for this decline. That is, while many paper mills produce their paper with a majority of certified fiber (FSC, SFI, or other), for many of those products, that fiber can only be reported as certified if it was specifically ordered as FSC, SFI or otherwise such that it can be tracked in a Chain of Custody (CoC) audit. It s therefore possible and likely that much more certified fiber was used than was reported as certified. All told, while many publishers, printers and paper manufacturers have strong environmental policies and indicate they are on track to meet or exceed these goals, the reported trends here suggest a move towards less recycled fiber and perhaps less certified paper. These changes and trends will remain a follow up focus for the BIEC until our next survey. www.bookcouncil.org THE BOOK INDUSTRY ENVIRONMENTAL COUNCIL (BIEC) is a nonprofit program that strives to benchmark, track and improve the book market s environmental footprint with science-based research and collaboration from a balanced and fully represented supply chain including: publishers, book manufacturers, paper manufacturers and suppliers, and environmental NGOs. The Council s members work collaboratively to identify, foster, and communicate best practices to reduce the book industry s impact and increase the sustainability of books (printed and/or electronic). It is chaired by Bill Rojack of Midland Paper Company and Lisa Serra of Scholastic Inc. For more information, please refer to the BIEC website at www.bookcouncil.org.