ESG Projects Attract Pulp & Paper Investments

Written by Sharun Anthony for IIR News (Sugar Land, Texas)

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Summary

The Pulp & Paper Industry is reshaping itself in response to surging e-commerce growth and consumer demand for clean labelling and packaging.

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Adapting to the Times

As the world shifts towards sustainability with net-zero targets and recyclability, Environmental, Social and Governance (ESG) projects have evolved from being optional to a standard industry practice. Helping firms to balance growth with environmental responsibilities through sustainable resourcing, supply-chain optimization and regulatory compliance, ESG initiatives enable industries to advance towards a cleaner future.

Thus, resource-intensive industries like Pulp & Paper are reshaping themselves in response to surging e-commerce growth and consumer demand for clean labelling and packaging, and are increasingly adopting ESG practices to ensure long-term viability in global markets.

Environmental Challenges

From deforestation and unsustainable sourcing to labor concerns and governance gaps, the global Pulp & Paper Industry is grappling with environmental challenges that ESG practices help mitigate. According to the World Wide Fund for Nature (WWF), the industry makes up 13-15% of overall wood consumption, utilizing nearly 33-40% of industrial wood traded worldwide. Thus, ESG practices such as sustainable forestry and recycled raw material usage help to reduce deforestation, a major challenge for pulp and paper mills globally.

Switching to renewable energy from conventional fossil fuels enables mills to cut both emissions and energy costs. Closed loop water systems further minimize regulatory risks related to wastewater discharge. In addition, ESG frameworks promote fair labor practices by enforcing safe working conditions and promoting mills to invest in local infrastructure. This not only helps the industry to adhere to global governance standards, but also reduces the risk of greenwashing while strengthening investor confidence.

The Global Spend

Industrial Info is tracking around 580 active capital pulp and paper projects globally, worth about US$10 billion, that are aimed at ESG activities. About 68% of the planned project spend is for unit additions, while 25% of the investment is aimed at grassroot projects.

Europe is the biggest driver of investment with a total spend of more than US$3 billion across 182 projects. Both North America and South America follow, with capital spending in each region surpassing US$2 billion. Asia has an investment of more than US$1 billion across 137 projects.

By country, the U.S. leads the way with a total spend pipeline of more than US$2 billion, followed by Brazil and Finland, with an investment of over US$1 billion each. Other countries with substantial spending include Indonesia, France, Australia, Germany and Spain.

With an aggregate spend of over US$3 billion, International Paper Company (Tennessee, U.S.), KaiCell Fibers Ltd (Oulu, Finland) and Green Bay Packaging Incorporated (Wisconsin, U.S.) are the top three players globally. They collectively hold a market share of around 32%.

In the U.S., a key project with notable spending is being tracked in Arkansas and is expected to get completed by December 2028. Green Bay Packaging Incorporated (Green Bay, Wisconsin) plans to construct recycled linerboard mills and new electric turbine generators and also perform major infrastructure modifications at the project site. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pulp & Paper Project and Plant databases can view the detailed project report and plant profile.

More than half of the projects being tracked globally are in the planning phase, 20% are in the engineering stages and 30% are under construction. Most of these projects are anticipated to be completed by December 2026, while the rest are planned for completion by September 2030.

While digital ESG platforms enable pulp and paper mills to manage the sustainability data effectively, the transition remains challenging due to high upfront costs, fragmented reporting frameworks and complex data management. However, government initiatives (like tax breaks for renewable energy and grants for water recycling projects) and green financing (like green bonds) have helped in easing financial pressures. Looking ahead, alignment with globally recognized standards (e.g.- International Sustainability Standards Board (ISSB) or Global Reporting Initiatives (GRI)) and leveraging AI-driven automation can further enable pulp and paper mills to turn ESG challenges into opportunities for innovation.

Key Takeaways

• Resource-intensive industries like Pulp & Paper are increasingly adopting ESG practices to ensure long-term viability in global markets.
• The industry makes up 13-15% of overall wood consumption, utilizing nearly 33-40% of industrial wood traded worldwide.
• Industrial Info is tracking around 580 active capital pulp and paper projects globally, worth about US$10 billion, that are aimed at ESG activities.

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About IIR News
IIR News (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).