The global pulp and paper industry is undergoing a major shift. Market forces, sustainability mandates, and geopolitical factors are reshaping how companies operate, compete, and deliver value.
Let’s take a look at the key dynamics driving this transformation – and the opportunities they create for businesses willing to adapt.
Packaging has emerged as a dominant growth driver, now representing 67% of the top ten product grades, a significant increase from 2008. While demand for communication papers has declined, capacity continues to expand – particularly in Asia, which leads the world in pulp and paper production. Europe follows as the second-largest region.
Global trade flows reflect this evolution. Since 2008, Asia Pacific and Latin America have doubled their share of the global pulp and paper trade, often at the expense of traditional Western producers. This eastward shift underscores the need for Western mills to rethink how they compete.
Trade has grown, but it has also become increasingly complex. Tariffs, overcapacity, and supply chain disruptions have created volatility across markets. A stark example came when China’s 2019 tariffs on imported US linerboard cut US import share in half within 10 months.
European producers face similar risks. US tariffs on EU cartonboard exports threaten to make nearly all European machines uncompetitive in North America. As tariffs continue to reshape global competitiveness, mills need to seek new markets or innovate their offerings to maintain share.
China presents a paradox to many Western executives. One the one hand, it’s the world’s largest pulp and paper market and where much of the growth over the past decade has occurred. On the other hand, profitability remains elusive, with operating rates often below 70% and margins squeezed by overcapacity. Producers continue to add capacity even as profits fall. Many producers have not been profitable for several years. To improve profitability, companies are rapidly integrating into fiber (China is now the world’s largest fiber consumer for pulp and paper).
This dynamic is creating ripple effects. Chinese producers are searching for export markets to sell their excess capacity. Neighboring countries, like Vietnam, have rapidly expanded hardwood chip exports, doubling their global share in just 15 years to feed China’s demand. Yet, this growth raises sustainability questions from NGOs and consumer goods companies about responsible sourcing.
The momentum toward sustainability is undeniable. Consumers are increasingly prioritizing low-carbon and renewable packaging solutions, and regulations are reinforcing this shift. For example, California’s Extended Producer Responsibility (EPR) law requires a 25% reduction in single-use plastic packaging by 2032, accelerating the move toward “paperization.”
Instantly, European and North American mills have a clear competitive edge: their carbon footprints are significantly lower than those of producers in Asia or Latin America. With EPR, the Packaging Waste Regulation (PPWR), and the EUDR setting stricter standards, companies are positioned to win consumer trust through transparency and sustainable sourcing.
The pulp and paper industry stands at a crossroads. The forces of global trade shifts, tariffs, Chinese overcapacity, sustainability mandates, and evolving consumer expectations are converging to reshape the competitive landscape.
For industry leaders, the challenge is not simply to survive these shifts but to leverage them as opportunities to build resilience, sustainability, and lasting competitive advantage. In this changing world, bold strategy and smart investments will define the winners of tomorrow.
At ResourceWise, our FisherSolve® platform and strategic consulting services give industry leaders the tools they need to make those decisions with confidence. From market intelligence and benchmarking to sustainability modeling and “what-if” scenario planning, FisherSolve provides the data and insights needed to understand global dynamics and sharpen your competitive edge. Combined with ResourceWise’s expertise in decarbonization, biomaterials, and long-term strategy, we help companies turn risk into opportunity and shape strategies that endure.