Canopy Report Finds Wheat Straw Pulp a Cost-Competitive Alternative to Virgin Wood Fibre
Economic modelling shows that replacing 5–10% of virgin wood pulp with agricultural residues could help paper packaging producers diversify fibre sourcing and manage raw material price risks.
A new report by Canopy finds that pulp made from agricultural residues such as wheat straw and sugarcane bagasse could offer a cost-competitive option for paper packaging producers seeking to diversify fibre sourcing. The report, Seeing the Field and the Forest, indicates that replacing 5–10% of virgin wood pulp with Next Gen pulp is a practical step that mills, brands and converters can take while reducing exposure to fluctuations in wood pulp prices.
Growing demand for paper packaging is increasing the industry's reliance on wood pulp, while uncertainty around its cost and availability continues to create challenges for producers. Changes in energy and raw material prices, trade and geopolitical disruptions, climate-related supply shocks and tighter regulations are adding both environmental and financial risks to virgin forest fibre sourcing.
According to Canopy, mills could pay between US$345 and US$380 per tonne for wheat straw or sugarcane bagasse pulp and still achieve cost savings compared with the wood pulp it replaces.
“Mills can pay US$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’s 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 was developed in collaboration with Blue Lotus Strategies and Glynmoran to assess the commercial viability of Next Gen pulp in consumer paperboard production. It models a business relationship between a buyer, such as a global, high-volume consumer goods brand or paperboard converter, and an integrated pulp and paperboard mill based in China.
The analysis focuses on high-performance folding boxboard (FBB), a lightweight, three-layer board featuring bright white printable front and reverse surfaces, along with a strong middle layer that provides bulk and stiffness.
Key Findings from the Economic Modelling
The report identifies several cost and technical considerations for incorporating agricultural residue-based pulp into paperboard production:
- Initial substitution potential: Replacing 5–10% of virgin wood pulp with Next Gen pulp could help mills reduce exposure to wood price fluctuations and prepare for upcoming policy requirements.
- Cost competitiveness: At a delivered price of approximately US$345–380 per tonne, Next Gen pulp could account for around 8% of the most cost-effective fibre mix for high-performance folding boxboard by 2028. Industry reviewers consider this price achievable in major packaging-producing regions.
- Current technical limitations: Existing technical constraints limit Next Gen pulp use to approximately 10%, primarily in the board's middle layer, where it replaces lower-cost wood pulp.
- Scope for higher substitution: Improvements in pulp quality and mill processes could enable Next Gen pulp to replace more expensive grades of wood pulp, potentially increasing cost savings.
- Longer-term adoption: Early adoption could create opportunities to increase usage to 20% by 2030 and more than 30% after 2032, supporting regional, diversified and affordable supply chains.
- Potential emissions reductions: Canopy's research indicates that replacing old-growth softwood with managed-forest wood combined with 10% agricultural residues could reduce lifecycle greenhouse gas emissions by approximately half in some applications.
The report provides price thresholds, economic modelling and technical specifications intended to help paper packaging producers assess the potential applications and cost levels of Next Gen fibres in products such as folding boxboard.
Canopy recommends that brands, converters and mills begin incorporating 5–10% Next Gen pulp while developing the supply capacity, technical performance and environmental evidence required for wider adoption.
As fibre quality improves and agricultural residue-based pulp becomes suitable for more applications within paperboard, the potential for cost savings could increase, particularly if wood pulp prices continue to rise.