Canopy releases economic modelling showing that using wheat straw residue is a cost competitive way to diversify fibre sourcing

Packaging Solutions

As brands move away from plastic and demand for paper packaging climbs, a new economic modelling report from Canopy shows that pulp made from agricultural residues can help packaging producers reduce their exposure to volatile wood pulp prices. Seeing the Field and the Forest finds that replacing five to 10% of virgin wood pulp with Next Gen pulp made from wheat straw and sugarcane bagasse is a practical, cost competitive step for mills, brands, and converters to take today.

Growing demand for paper packaging is deepening the industry’s reliance on wood pulp at a time when its cost and supply are increasingly unpredictable. Swings in energy and raw material prices, trade and geopolitical disruptions, climate linked supply shocks and tighter regulation are all adding environmental and price risk to virgin forest fibre sourcing.

‘Mills can pay $345 to 380 a tonne for wheat straw or sugarcane bagasse pulp and still beat the cost of the wood it replaces, with less exposure to swings in wood prices. That is a price suppliers can meet today. Packaging companies don’t have to wait for the perfect fibre to start reducing their reliance on forests,’ said Kari Stoever, head of impact, Canopy.

The report, created in conjunction with Blue Lotus Strategies and Glynmoran, tests whether Next Gen pulp makes business sense for consumer paperboard. It models a commercial relationship between a buyer, such as a global, high volume consumer goods brand or paperboard converter, and a China based integrated pulp and paperboard mill. The focus is a demanding, high performance folding boxboard (FBB) grade: a lightweight, three layer board with bright white printable front and reverse sides and a strong middle layer that provides bulk and stiffness.

The report found:

Replacing five to 10% of virgin wood pulp with Next Gen pulp is a practical way for mills to reduce exposure to wood price swings and prepare for coming policy requirements.

At a delivered price of about $345 to 380 per tonne, Next Gen pulp would make up about 8% of the most cost effective mix for high performance folding boxboard by 2028. Industry reviewers consider that price plausible in major packaging producing regions.

Today, technical limits cap Next Gen pulp at about 10% and confine it to the board’s middle layer, where it replaces cheaper wood pulp. Improvements in quality and mill processes would let it replace more expensive pulp, increasing savings.

Early adoption could open the door to 20% use by 2030 and more than 30% after 2032, supporting the shift toward regional, diversified and affordable supply chains.

Canopy’s research finds that replacing old growth softwood with managed forest wood plus 10% agricultural residues could cut lifecycle greenhouse gas emissions by about half in some applications.

The report’s price thresholds, modelling and technical specifications give paper packaging producers new information on the range of uses and cost levels for Next Gen fibre in products like FBB.

Canopy recommends that brands, converters and mills begin using five to 10% Next Gen pulp now, while building the supply, technical performance and environmental evidence needed to scale. As performance improves and Next Gen fibre finds more uses in the board, the savings could add up, especially if wood pulp prices keep rising as they have in the past.

The full report, Seeing the Field and the Forest, is available here.