Why a Reliable Pulpwood Supply Supports American Paper Manufacturing
Key Takeaways
Paper Mills Need Pulpwood
Paper manufacturers depend on local pulpwood supply to produce products we rely on.
New Demand Can Affect Supply
Some federal renewable fuel policies could increase competition for that same pulpwood. That could make it harder for U.S. paper manufacturers to compete.
Policy Can Help Avoid Disruption
AF&PA supports policies that promote renewable energy without disrupting manufacturing supply chains.
What is Pulpwood and Why is it Important to Paper Manufacturing?
Pulpwood Definition
Pulpwood are small trees that can’t be turned into lumber. These small trees are often grown in privately owned working forests across the country.
U.S. pulp and paper mills rely on a steady supply of renewable, locally sourced pulpwood because it is a key raw material used to make paper products.
Pulpwood & Paper Products
Mills use locally sourced pulpwood to make products American families and businesses depend on every day, including:
- Cardboard boxes
- Paper towels
- Printer paper
- Paper bags
- Packaging
How Pulpwood Supports a Working Forest Sector Supply Chain
U.S. pulp and paper mills buy pulpwood and other inputs from nearby working forests. Because wood is heavy and expensive to move, these markets are often local.
For most mills, much of their pulpwood is sourced from within about 100 miles of the facility. That distance can increase substantially depending on the needs of the facility. This area is known as the mill's fiber basket, or local wood market.
Supports Mills
Mills use pulpwood to make pulp, paper, packaging and tissue products used by American families, businesses, schools and hospitals.
Supports Local Economies
These mills are also important employers in many rural communities.
Supports Working Forests
This demand for pulpwood supports landowners who manage working forests. It also supports jobs in logging, trucking and other parts of the supply chain.
Because these markets are local, changes in demand can affect pulpwood costs and mill operations within the same region.
How Can Renewable Fuel Incentives Affect Local Pulpwood Supplies?
Some federal proposals are exploring ways to increase renewable fuel production. One option being considered would use more pulpwood to produce biomass fuel.
However, these policies could affect local wood markets because paper manufacturers and fuel producers would rely on the same resources. In some regions, that could mean competing for the same local pulpwood supply.
Federal incentives can then create a government-subsidized buyer for the pulpwood that mills rely on.
The result can be higher costs, harm to supply reliability, and added pressure on mills that already compete in global markets.
What Could Higher Pulpwood Costs Mean for Paper Manufacturing?
U.S. Pulp and Paper Mills
Higher costs and longer hauling distances can make U.S. pulp and paper mills less competitive.
Local Communities
Changes in mill competitiveness can affect workers, landowners, suppliers and surrounding communities.
U.S. Manufacturing
If domestic mills become less competitive, more paper products may be imported rather than made in America.
When local pulpwood becomes more expensive or harder to find, mills may face higher costs or longer hauling distances. Over time, that can make pulp and paper mills less competitive and affect workers, landowners, suppliers and nearby communities.
Demand for paper and packaging does not go away when U.S. mills face higher costs. If U.S. mills become less competitive, more paper products may be imported instead of made in America.
What Policy Approaches Can Balance Renewable Energy and Manufacturing Goals?
AF&PA's Position
AF&PA supports practical policy approaches that advance renewable energy goals while protecting the manufacturing supply chain and supporting domestic manufacturing.
The paper industry has long used manufacturing residuals as renewable biomass energy to help power mills. However, some policies also encourage the use of pulpwood for renewable energy.
When policies increase demand for pulpwood, they can harm local wood markets, mill costs and the communities that depend on these facilities.
Policies can help avoid those impacts by recognizing the difference between using manufacturing residuals for renewable energy and diverting pulpwood away from existing mills. That includes recognizing the value of biomass from federal lands, where it can support wildfire mitigation.
For biomass from private lands, a market analysis can show whether wood lacks a market or whether incentives would pull pulpwood away from existing manufacturers.