A new economic modelling report by environmental organisation Canopy has found that replacing a portion of virgin wood pulp with fibre produced from agricultural residues such as wheat straw and sugarcane bagasse could offer paper packaging manufacturers a commercially viable way to diversify raw material sourcing, reduce exposure to wood pulp price volatility and lower pressure on forests.
The report, Seeing the Field and the Forest, released on 9 November 2026, examines the commercial feasibility of incorporating alternative fibres, referred to as Next Gen pulp, into consumer paperboard production. It concludes that replacing between 5% and 10% of virgin wood pulp with agricultural residue-based alternatives is achievable under current market conditions, with the potential for higher substitution rates as production technology and material quality improve.
The findings come as demand for paper-based packaging increases amid efforts by brands and manufacturers to reduce reliance on plastic. The shift is placing additional pressure on wood fibre supply chains, with packaging producers exposed to fluctuations in raw material and energy costs, trade disruptions, geopolitical uncertainty, climate-related supply shocks and tightening environmental regulations.
Canopy’s modelling suggests that wheat straw and sugarcane bagasse pulp could be purchased at delivered prices of approximately US$345 to US$380 per tonne while remaining cost-competitive with the wood pulp they replace. At these price levels, the report estimates that Next Gen pulp could account for around 8% of the most cost-effective fibre mix for high-performance folding boxboard by 2028.
Kari Stoever, Canopy’s Head of Impact, said mills could adopt agricultural residue-based pulp without waiting for major technological breakthroughs or a complete restructuring of existing production systems.
“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,” Stoever said.
The report was developed in collaboration with Blue Lotus Strategies and Glynmoran. Its analysis models a commercial relationship between a high-volume consumer goods brand or paperboard converter and an integrated pulp and paperboard mill based in China. The assessment focuses on folding boxboard (FBB), a lightweight, three-layer material widely used in packaging applications where print quality, stiffness and structural performance are important.
The choice of FBB provides a demanding test for alternative fibre materials because packaging manufacturers must maintain product performance while changing the composition of the pulp used in production. The board’s outer layers provide bright, printable surfaces, while its middle layer contributes bulk and stiffness. According to the report, current technical limitations mean that Next Gen pulp can account for approximately 10% of the material and is largely restricted to the middle layer, where it replaces lower-cost wood pulp.
This limitation influences the immediate economic case. Although agricultural residue-based pulp can compete with some wood fibre, its current technical properties restrict its ability to replace more expensive pulp used in other layers of the board. Improvements in fibre quality and mill processing could expand its applications and increase the potential savings available to manufacturers.
Canopy’s projections indicate that early adoption could create a pathway towards 20% Next Gen pulp use by 2030 and more than 30% after 2032. These are projected adoption levels rather than existing industry-wide substitution rates, and their achievement will depend on improvements in production processes, reliable supplies of agricultural residues and the ability of mills to integrate alternative fibres without compromising product specifications.
The economic argument extends beyond the immediate price of pulp. Heavy dependence on a single raw material exposes manufacturers to changes in supply and pricing conditions. Diversifying fibre sources could provide mills with greater flexibility when wood pulp markets experience disruption, while creating additional commercial value for agricultural residues that might otherwise have limited uses.
Wheat straw and sugarcane bagasse are generated through agricultural production and processing. Their availability creates an opportunity to connect agricultural supply chains with industrial manufacturing, although the economic and environmental benefits depend on how residues are collected, processed, transported and allocated among competing uses. Agricultural residues can also serve other purposes, including soil management and energy production, meaning that their use for pulp must be assessed against local conditions and existing demand.
The potential relevance for African economies is particularly notable in countries with established agricultural and agro-processing industries. Sugarcane-producing countries generate bagasse during sugar processing, while wheat-growing regions produce straw after harvesting. Developing commercial pathways for these materials could create additional value within agricultural supply chains and support local manufacturing diversification.
However, the Canopy report’s commercial model is based on a China-based integrated pulp and paperboard mill. Its price assumptions and technical findings should therefore not be treated as proof that the same economics can be replicated automatically across African markets. Local feedstock availability, collection infrastructure, processing capacity, energy costs, logistics and the technical requirements of individual mills would influence the viability of similar investments on the continent.
The environmental case is another important part of the report’s analysis. Canopy estimates that replacing old-growth softwood with wood from managed forests combined with 10% agricultural residues could reduce lifecycle greenhouse gas emissions by approximately half in some applications. The finding suggests that changes in fibre sourcing could contribute to lower-emission packaging production, although the extent of the benefit will vary according to the feedstock, production process, energy source and transport requirements.
For manufacturers and consumer brands, the report provides price thresholds and technical specifications intended to inform decisions about incorporating Next Gen pulp into packaging products. Rather than presenting agricultural residues as an immediate replacement for all virgin wood fibre, it makes the case for beginning with a limited share that can be integrated into existing production systems.
Canopy is recommending that brands, converters and mills begin incorporating between 5% and 10% Next Gen pulp into their sourcing strategies while developing the supply capacity, technical performance and environmental evidence needed for wider adoption. The organisation argues that early purchasing commitments could help suppliers build the capacity required to serve larger markets and support further improvements in fibre quality.
The approach also raises questions about the pace at which packaging manufacturers can adapt their procurement and production systems. Mills will need dependable suppliers, consistent feedstock quality and processing arrangements that meet industrial requirements. Brands and converters, meanwhile, will need to assess whether alternative fibre content meets packaging performance standards and their own sourcing and sustainability commitments.
For agricultural producers and processors, increased demand for residues could create additional revenue opportunities, but commercial viability will depend on whether collection and transport costs allow suppliers to compete with established wood pulp sources. Long-term purchasing agreements could help provide greater certainty for suppliers and support investment in processing capacity.
The findings add to a wider debate about how packaging industries can reduce dependence on forest-based raw materials as demand for fibre-based products grows. Agricultural residues are one potential source of alternative pulp, but their contribution will depend on the development of commercially reliable supply chains and evidence that their use delivers environmental benefits without creating competing pressures on agricultural land and resources.
Canopy’s modelling places the immediate opportunity at a relatively modest level of substitution, with the possibility of expansion as technical and commercial constraints are addressed. For the paper packaging industry, the question is increasingly whether alternative fibres can meet manufacturing requirements at prices that justify adoption. The report’s findings suggest that, at least for a portion of current wood pulp use, agricultural residues may already offer a competitive option.
