1. Growing and Sustaining Markets: Paper Recycling Brian Hawkinson, AF&PA 16 th Annual Texas Recycling & Sustainability Summit October 14, 2013 Houston, Texas

2. About AF&PA Advances a sustainable pulp, paper, packaging and wood products manufacturing industry Fact-based public policy and marketplace advocacy AF&PA member companies make products essential for everyday life from renewable and recyclable resources Committed to long-term success of industry, communities and environment Better Practices Better Planet 2020 Sustainability Initiative 2

3. Historical Paper Market Trends U.S. Recovery of Paper & Paper-based Packaging Overall: 65.1% Second highest recovery rate True environmental success story On track to meet Better Practices Better Planet 2020 goal: Exceed 70% recovery by 2020 3

4. U.S. Paper Recovery Rate 1990-2012 Actual Trend Source: AF&PA Historical Paper Market Trends

5. 5

6. 6

7. 7

8. 8

9. Affect of Quality on End Markets Recovered Paper quality is marketplace issue Must meet production specifications: Cost Availability Meet performance attributes of finished product Processing requirements vary by grade Mills procure fiber that best meets production specifications 9

10. “Advanced Resource Recovery” Affects Marketplace issue Quality Single stream collection Outlet for non-recyclable paper 10

11. Policy: Extended Producer Responsibility Shifts responsibility form municipality to brand owner Would disrupt existing effective infrastructure Impractical and unnecessary Increase costs for consumers Increase costs for marginal return Free markets should guide paper recovery & utilization 11

12. Policy: Mandatory Commercial Recycling Recovery should focus on meeting end user needs Potential for disrupting free flow of recovered paper Use and improve existing collection infrastructure 12

13. Policy: Export Controls Unlikely to increase paper recovery or utilization Strong demand from export markets increase incentives to recover more paper Export restrictions: Would eliminate incentives to increase recovery Would leave large amounts of municipal single-stream mixed paper by creating an oversupply for domestic manufacturers…exports are the relief valve Would hurt municipalities and businesses across the supply chain Likely violate international trade rules 13

14. Policy: Increased Recycled Content Mandates Unlikely to increase paper recovery rate U.S. Paper Recovery and Recovered Fiber Utilization 14

15. “Best Practices” for Sustaining Recovered Paper Markets Free marketplace Collection Utilization System designed to meet end user requirements 15

16. Thank You Brian Hawkinson Executive Director, Recovered Fiber AF&PA 202-463-2776 brian_hawkinson@afandpa.org 16