Paper and paper products have spurred intellectual, cultural and industrial movements for nearly 2,000 years, from the spread of literacy and the printing revolution to the rise of newspapers and modern commerce. Yet the mills producing this indispensable material have struggled to keep pace with technological advances transforming other industries.

For generations, workers have labored inside enormous factories, tending machinery that turns wood into pulp and pulp into paper. Although automation has improved production, much of the industry’s infrastructure is decades old, and manufacturing remains an energy-intensive process.

Now the U.S. Department of Energy is launching an ambitious initiative to modernize the nation’s pulp, paper and packaging industry, using AI, advanced manufacturing and scientific research to make mills more efficient and profitable.

The effort, announced Oct. 22, will be led by Oak Ridge National Laboratory in Tennessee through the newly established Center for Research and Advancement of Forest Product Technologies, or CRAFT. The center will unite federal laboratories, universities and private manufacturers to develop technologies that could transform the U.S. pulp, paper and paperboard mill industry, which generates approximately $80 billion in annual revenue.

CRAFT will focus on modernizing existing facilities while developing technologies that could also be used in new mills. Scientists will use AI and computer modeling to identify production bottlenecks, prevent equipment failures, increase output and reduce costs.

“The U.S. pulp and paper industry is critical to thousands of rural communities, like the one where I grew up in Maine, but much of the existing infrastructure is decades old,” said Daniel Coughlin, executive director of CRAFT and a senior research and development staff member at Oak Ridge.

The modern paper mill emerged during the Industrial Revolution, when mechanized production replaced the painstaking work of making paper by hand. Steam-powered machinery and chemical processing enabled manufacturers to produce enormous quantities at relatively low cost.

Today’s mills are more sophisticated, but the fundamental process remains largely unchanged. Wood is reduced to chips, which undergo mechanical or chemical processing to separate the fibers, with chemical methods also removing much of the lignin that binds them together. The resulting pulp is cleaned, mixed with water and spread across a moving screen, where the fibers form a continuous sheet. Heavy rollers and heated cylinders then remove moisture before the finished paper is wound into large rolls.

The process consumes substantial amounts of heat, electricity, water and chemicals, making even modest efficiency improvements potentially valuable.

CRAFT researchers will examine how fibers are processed, chemicals are recovered and water is removed during manufacturing. Extracting more moisture mechanically, for example, could reduce the energy required for drying, one of the most demanding stages of production.

Sensors and AI-powered monitoring systems could continuously track operating conditions, detect inefficiencies and predict mechanical failures before they interrupt production. Researchers also plan to develop digital twins, computerized replicas of manufacturing systems that allow engineers to test adjustments virtually before making costly changes on the factory floor.

A mill could simulate modifications to its drying equipment or chemical processing systems to determine whether they would increase output without compromising paper quality.

“We will apply molecular-to-process-scale modeling, AI-enabled discovery, and integrated experimental validation to accelerate the translation of new technologies with real-world impact,” said Gregg Beckham, a senior research fellow at the National Laboratory of the Rockies and a CRAFT research leader.

The potential economic benefits are considerable.

CRAFT has established long-term goals of improving manufacturing energy efficiency by 10% to 25% and reducing production costs by as much as 17%. Achieving those targets could strengthen profit margins in an industry contending with expensive equipment, fluctuating energy prices and international competition.

Greater efficiency does not automatically translate into higher revenue. But mills that increase production, reduce interruptions and develop higher-value products could generate additional sales while spending less to manufacture them.

For perspective, a hypothetical 1% increase in sales across an $80 billion industry would represent approximately $800 million in additional annual revenue.

Changing consumer habits have also reshaped the business. Digital communication has diminished demand for printing and writing paper, while e-commerce has bolstered the market for cardboard boxes and other packaging materials. Manufacturers increasingly need the flexibility to adapt their products and equipment to shifting demand.

CRAFT’s first three years will focus on research partnerships, pilot-scale testing and technologies that manufacturers could eventually adopt commercially. Workforce development will also be a priority as increasingly sophisticated machinery requires employees with specialized technical skills.

The need for modernization is evident in a report by the Environmental Integrity Project, a watchdog organization that examined 185 of the nation’s largest pulp and paper mills.

Researchers found that nearly three-quarters of the mills had outdated boilers. Boilers with available age data averaged 41 years old, and more than 40% of the facilities had at least one boiler that was 50 years old or older.