Regulatory requirements and consumer demand are pushing more companies to switch from plastic to paper for everything from packing peanuts to beverage bottles. But some groups question whether paper is truly a better alternative and how much it helps companies meet their sustainability commitments. 

Mounting evidence of plastic’s potentially adverse effects on the environment and public health are gaining attention. For example, about 98% of single-use plastic products are made from fossil fuel feedstock, and greenhouse gas emissions from the production, use and disposal of these plastics are expected to rise to 19% of the global carbon budget by 2040, according to the United Nations Environment Program.

In response to these growing concerns, regulators at every level of government have adopted new policies.

Negotiations to craft the world's first-ever global plastics treaty ended in December without an agreement, but they will continue this year. The EU also recently adopted a new, stricter packaging waste rule that covers all types of packaging, including certain single-use plastics. The U.S. EPA recently adopted a nonbinding strategy to prevent plastic pollution, and multiple states are implementing extended producer responsibility laws for packaging. 

In light of these policy changes, many brands are requesting plastic alternatives from their packaging suppliers. In turn, this is driving more innovation in fiber materials among packaging manufacturers

An expanding market

The interest in fiber as a plastic alternative is expected to grow significantly in the coming years across the packaging industry. For example, Freedonia Group predicts that the molded fiber market will rise to more than $4 billion by 2030, up from around $1 billion in 2015.

Many of the efforts to switch to paper so far have focused on shipping and food packaging. For example, Amazon recently replaced 99.7% of its mixed material padded mailers with recyclable paper ones, JDE Peet’s announced plans to use paper pouches to house its coffees and Nissin Foods USA’s Cup Noodles is now packaged in paper cups made with 40% recycled paper.  

One company that’s made fiber-based packaging the center of its business, rather than an experiment, is DS Smith. The packaging company, which International Paper is in the process of acquiring, shed its plastic business in 2021 and is now an all-fiber company, said Marc Chiron, director of sales, marketing and innovation for DS Smith’s packaging division, in an email.  

As part of its sustainability strategy, the company reached its target early of replacing one billion pieces of plastic by 2025: As of May 2024, the company had replaced 1.2 billion pieces. It reached that goal by working with the Ellen MacArthur Foundation to come up with new designs for its fiber-based packaging in various sectors, including food and beverage, automotive parts and retail goods.

“[A]pproaching each project [by] looking carefully at factors such as percentage of recycled content, recyclability, estimated CO2 emissions and levels of excess waste and other factors helped us strengthen our company’s overall mindset and cultural focus on sustainability,” Chiron said.

Its first box made using those metrics was a beer container for Toast Ale in the U.K., introduced in 2021. DS Smith also helped Bosch Home Comfort Group switch to fully recyclable packaging for the company’s gas boilers, which saves 100,000 plastic parts and 310 tons of CO2 emissions annually, he added. 

Even small design changes like replacing plastic labels can make a big difference, Chiron said. “It is our mission to design out waste and to reduce plastic across all kinds of formats.”

The quest for the perfect paper bottle

Some of the most ambitious efforts to develop paper alternatives are emerging within the beverage industry. Several companies including Coca-Cola, PepsiCo, Procter & Gamble and Diageo are in the midst of developing paper bottles.

One challenge with developing a paper alternative, many in the industry say, is figuring out how to keep beverages well contained while also ensuring that the bottle can be fully recycled.

“Paper and liquids — you know, the two don't seem to go together,” said Ron Khan, vice president of beverage packaging at PepsiCo.

PepsiCo is working with Pulpex to develop a molded fiber bottle that disproves that assumption. Its prototype is made from a wood pulp mix that is blended, molded and then dried — a proprietary process that prevents the bottle from leaking and ensures durability and recyclability. The wood pulp comes from forests certified by the Forest Stewardship Council and accredited by the Program for the Endorsement of Forest Certification.

One of the biggest hurdles in the quest for a 100% recyclable paper bottle is finding the right material to create a sufficient barrier between the liquid and the paper.

The barrier has to meet a number of different, and sometimes competing, criteria, including effectiveness, food safety, light weight and recyclability. A barrier might meet food safety requirements but be too thick, for example.

Many prototypes contain a plastic liner, which has to be manually separated before the bottle can be tossed into the paper recycling bin. But the latest generation of Pulpex fiber bottles is designed to be recycled like any other paper material, according to the company.

“The biggest challenges have been with the coating, and we’re in the last stages,” Khan said. The water-based, food-grade coating keeps out moisture and oxygen, according to the company.

Finding a viable paper bottle is part of PepsiCo’s broader sustainability objectives, Khan added. The company’s “Pep+” initiative, launched in 2021, aims to infuse sustainability across its operations, from production to distribution, according to its latest ESG report, released in 2024.

Few paper bottles advance beyond the prototype stage, but Carlsberg’s wood fiber bottles, developed with the Denmark-based Paper Bottle Co., better known as Paboco, are an exception. Its paper-packaged beer has been tested in stores in the U.K. and Sweden. The bottle’s barrier is made of PEF, or polyethylene furanoate, a plant-based polymer that the company says preserves the beer’s fizziness and taste. While the PEF lining is biodegradable, it has to be separated and recycled as plastic in many areas. 

Paboco CEO Tim Silbermann said consumer reaction has been positive so far, with users praising the look and feel of the bottle, though some have complained that it still contains plastic. 

The company, which is also working with Coca-Cola and L’Oreal, has replaced the initial prototype’s plastic neck with a paper one and continues to work on creating a non-plastic barrier.

“We have always been very transparent about the journey aspect of this. This was the first generation that we wanted to try to see how it works,” said Silbermann.

Finding a composition that meets regulatory requirements for paper recycling across Europe is also a challenge. For example, Germany’s rules specify that packaging has to be 95% paper to be considered recyclable as paper.

“Recyclability is a complicated topic, especially in Europe, because there's so many different markets and so many different regulations,” he said. The EU’s new packaging rules, formally adopted by the European Council last month and expected to be applied next year, aim to help address that variability. 

Carlos Diaz Acosta, an engineer at the Rochester Institute of Technology who focuses on packaging, said that the technology has promise, despite the headaches involved in creating a durable, fully recyclable bottle made from sustainably sourced wood fiber.

“It’s evolving. I don't know if I’d say fast, but they keep making it better and better,” he said. “We don't know if we're going to see something on the shelf next year or in five years.”

Paboco, which uses FSC-certified wood fiber, is expanding. Silbermann said the company plans to relocate elsewhere in Denmark this year and install larger machines to increase its output.

Imperfect paper

Complicating the shift from plastic to paper is that fiber comes with its own set of environmental problems. While the material is touted as a renewable resource and is widely perceived as superior to plastic packaging in terms of its circularity, its environmental impact is significant. 

“Paper offers this image that the sources are renewable — that's [yet] to be defined,” Diaz-Acosta said. “What does renewable mean?”

About 3 billion trees are felled each year to make paper packaging, according to Canopy, a non-profit organization that works with packaging companies to reduce their environmental impact.

“One of the most pervasive myths is that logging forests for paper packaging is the answer to plastic pollution. But this approach swaps one environmental disaster for another,” wrote Mariah De Los Santos, the group’s communications specialist, in a recent post on its website. "In the face of climate and biodiversity crises, safeguarding forest ecosystems is imperative.”

The EU has adopted a new deforestation rule that will require companies that sell commodities often produced on cleared forest lands, such as wood, beef, cocoa, and palm oil, to the EU market — or exports from it — to show that their products are not derived from recently deforested areas or have contributed to forest degradation. The rule will be phased in over the next two years.

Pulpex and Paboco say they’re addressing deforestation concerns by using only certified wood for their paper bottles. FSC-certified wood, for example, is harvested in a way that largely avoids clearcuts, instead using selective logging, and leaves a wide buffer along salmon-bearing streams, among other practices.

Since paper can be re-pulped, it’s easier to recycle than plastic, which — because of its durability — needs to be broken down with more chemicals. But paper can’t be recycled indefinitely; its fibers become shorter with each cycle and only last an average of six times, according to EPA data.

Making paper also requires a lot of energy. According to a 2011 analysis conducted for the Northern Ireland Assembly, making a paper bag requires four times as much energy as manufacturing a plastic bag. And since paper weighs more than plastic, transporting it can require more fuel, adding to its carbon footprint. 

Some critics say instead of switching to paper and other alternative materials, companies should focus on scaling back the production of plastics. In their view, simply replacing plastic with paper does little to address the problem of single-use.

A 2023 report by the European Environmental Bureau, an advocacy group, called the shift to paper a “false solution” to the plastic packaging problem. It accused McDonald’s and other major food companies of greenwashing the use of single-use paper containers as a sustainable option. The group encouraged a reduction in the use of both plastic and paper single-use packaging.  

But company representatives point out that by switching to paper and other materials, they are reducing the demand for virgin plastic.

PepsiCo, for example, has a target to reduce its use of virgin plastic from “non-renewable sources” 20% by 2030 across all packaging categories. It also has a target to design 100% of its packaging to be either recyclable, compostable, biodegradable or reusable. Its latest ESG report projected reaching 98% by 2025.

For Khan, PepsiCo and Pulpex’s paper bottle shows what can be accomplished in the beverage packaging space with innovation and modern technology. 

“I've been in packaging for 33 years, and everything I've done on packaging has been changes to packaging, be it glass or bottles or PET,” he said. “It's the first time we're actually developing a brand new packaging format. So it's exciting.”

But the paper bottle will take time to perfect, he added. “We were one of the pioneers of PET bottles 40 years ago. It's taken us 40 years to optimize the bottle. We're now starting that journey with paper.”