How Digitalization Supports the Circular Economy Value Chain


A circular economy aims for the smart use of resources. Having an in-depth understanding of resource use across product life cycles, value chains, and ecosystems helps manufacturers use excess side and waste streams, optimizing product lifetime and material flows and discovering new synergies. The paper industry is paving the way for more versatile use of data for the benefit of a circular economy.

The scarcity of natural resources is a key factor defining the landscape where today’s companies do business and create value. For the paper industry, resource scarcity is not only a source of concern but, through circular economy thinking, also an opportunity. Here, data plays a crucial role.

In the European paper industry, a variety of data are used to optimize processes, supply chains, and ecosystems in a way that ensures materials are used efficiently, waste is avoided, and materials are recycled toward the end of their life. Data provide valuable insight into the life cycle of products and the opportunities to optimize them—for instance, through enhanced recycling.

For example, Stora Enso, a provider of renewable solutions in packaging, biomaterials, wood construction, and paper, is manufacturing intelligent packaging solutions that integrate RFID (radio frequency identification) and NFC (near-field communication) technologies. The technologies enable the collection and analysis of data throughout the lifecycle of the product, allowing an unprecedented amount of valuable information, all the way from supply chain performance to avoiding food waste. The same technology can likewise enable efficient sorting that ensures the recycling of the packaging.


Modern biorefineries are a great example of wood being converted into a spectrum of bio-based products. Since a biorefinery consists essentially of multiple different factories connected together, data on material flows are essential for coordinating the entire ecosystem. At Borregaard’s biorefinery, data from the previous factory in the value chain are used downstream to predict when the raw material will arrive and what its characteristics are, which gives an idea on how to operate the next factory. What comes out of the connected process is a wide range of biomaterials that can end up in a variety of products, from cosmetics and foodstuffs to paints and batteries.

To enhance the use of side and waste streams, digital platforms are developed as data sharing, innovation, and knowledge platforms to match demand and supply. They combine digital and physical flows, facilitating the use of side and waste streams for high value-added products.

Cepi, the European association representing the paper industry, has developed digital online tools to educate and inform the 900 paper production sites across Europe on the available options for using side streams. Further work is needed to better understand the full life cycle of products through data, all the way from raw materials to end-of-life. For example, how has the use of products affected their re-usage value? Leading paper and cardboard manufacturers are already using visual recognition AI technology to collect data and assess the quality of the used paper fed into the recycling processes, as part of the advanced quality management system for circular materials.


The European paper industry is an anchor industry in industrial symbiosis, based on sharing raw materials, water, energy, and knowledge. In industrial symbiosis, unused or residual resources of one company are used by another, which creates a mutually supportive business ecosystem.

The circular economy takes place throughout the paper industry’s value chains and a wide network of suppliers, producers, retailers, customers, and other partners. Collaboration across actors and industries is needed to capture the value of a circular economy.


Sustainable sourcing of raw materials has always been at the core of the European paper industry. The origin of raw materials is well known, and the sustainability of the use of wood can be tracked, whether it is grown in Europe or imported. Data flows throughout the entire value chain, ensuring traceability on the origin of the wood and fibers, along with transparency for users and customers.

New digital tools make tracking and transparency in the value chain even easier. For instance, Lenzing Group—a world-leading provider of wood cellulose-based specialty fibers, including the Tencel and Verocel brands—is using blockchain technology in its fiber business to provide transparency for brands and consumers. Blockchain authenticates the digital traceability of the fibers throughout the supply chain. A QR code is attached to the final garment, which a consumer can use to detect the origin of the wooden raw material that has been used. The company is developing the solution further and perceives digitalization as a key enabler for making the transition from a linear to a circular supply chain.

Navigator, a pulp, paper, tissue, and energy producer, uses web-based platforms compatible with Google Earth to provide customized forest management guidelines. These platforms use smart algorithms covering soil and climate characteristics, environmental considerations, and other relevant aspects to ensure sustainable forest management and forest certification. They are a great example of easy-to-use tools for individual forest owners to transparently assess their forest management options.


In any industry, digital tools and data play an important role in verifying the sustainability of activities and credibility of communications. In the European paper industry, wood always comes from certified or controlled sustainably managed forests. This means that paper companies are accountable for the wood’s legality and the sustainability of the whole supply chain. The chain of custody and accompanying data on the origin of wood verifies responsibility and sustainability in the whole value chain. It also ensures efficient compliance with EU regulations regarding, for example, excluding illegal logging. Many ideas employed in other industries, like the EU’s Farm to Fork initiative, are already used in the paper industry, supporting informed choices and efficiency gains.

Due to the coronavirus pandemic, the resilience of the European economy has been a frequent topic of discussion. The pandemic has caused business disruptions in addition to consequent unemployment. The biggest hit has been taken by industries with globally long and complex supply chains.

The value chains in Europe’s paper industry—including sourcing, manufacturing, reuse, and recycling—are largely European and also typically shorter. Moreover, the technologies and innovations are often created in Europe, making us a key pillar in European resilience in terms of both production and expertise.


Traceable and transparent supply chains are central to European sustainability and resilience. Increasing the amount of data and new digital tools makes sharing the data in the value chain easier and smoother. The

value chains of wood and fibers starting from the paper industry flow down to a range of vital products and services, including renewable energy, textiles, construction, green chemicals, health and hygiene, pharmaceuticals, and packaging. The forest-based ecosystem can provide a healthy dose of green and digital resilience to several different ecosystems. 

Jori Ringman is director general at Cepi, the European forest, fiber, and paper industry association ( This is the second installment of a three-part series on the links between digitalization and sustainability ending in Paper360°’s November/December 2021 issue, which will feature a cover focus on sustainability.