As brands increasingly shift from plastic to paper packaging, a new environmental question is emerging: How sustainable is paper production when freshwater resources are under pressure?

In Uruguay, that debate has intensified around UPM’s Paso de los Toros pulp mill, one of the world’s largest eucalyptus pulp facilities, as drought and water scarcity reshape public perceptions of the paper industry’s environmental footprint.

One of the World’s Largest Pulp Mills

Located in central Uruguay, UPM’s Paso de los Toros mill represents one of the country’s largest industrial investments.

According to UPM, the facility:

• Withdraws approximately 1.5 cubic metres of water per second from the Río Negro River.
• Returns around 80% of the water to the river after treatment.
• Uses less than 1% of the river’s average flow under normal conditions.

The company argues that its operations comply with environmental permits and modern water management practices.

Uruguay’s Drought Changed the Conversation

The issue gained greater attention following Uruguay’s severe 2023 drought, the country’s worst water crisis in decades.

During the crisis:

• Reservoir levels dropped significantly.
• Montevideo experienced water supply challenges.
• Elevated salinity levels affected drinking water supplies.

Environmental groups and local communities increasingly questioned whether expanding eucalyptus plantations and pulp production could place additional stress on already vulnerable water systems.

Industry and Critics Remain Divided

Critics argue that rising demand for virgin pulp and large-scale forestry operations may intensify pressure on freshwater resources as climate change increases the frequency of drought events.

Industry representatives reject the suggestion that pulp mills are the primary cause of water shortages.

Instead, they point to factors including:

• Agricultural water consumption
• Climate variability
• Wastewater discharges
• Broader watershed management challenges

They also emphasize that modern pulp mills have significantly improved water efficiency and wastewater treatment compared with previous generations of facilities.

Environmental Incident Added Scrutiny

Public attention intensified further after Uruguay’s environmental authorities fined UPM in 2024 following a chemical leak at the Paso de los Toros facility.

The incident reportedly affected water quality and contributed to fish deaths in a nearby waterway.

UPM subsequently introduced corrective measures designed to prevent similar incidents in the future.

Is Paper Always the Better Alternative?

Paper packaging is often promoted as a more sustainable substitute for plastic because it is:

• Renewable
• Recyclable
• Biodegradable

However, producing virgin pulp remains resource-intensive, requiring significant quantities of:

• Water
• Energy
• Fibre resources

As consumer demand for paper-based packaging accelerates, some experts warn that environmental impacts must be assessed across the full lifecycle rather than focusing solely on end-of-life waste.

Industry Outlook

The debate unfolding in Uruguay reflects a broader challenge facing the global pulp and paper industry.

As climate change increases water scarcity risks worldwide, investors, regulators, and local communities are expected to place greater emphasis on:

• Industrial water consumption
• Water-use efficiency
• Watershed impacts
• Supply chain transparency
• Climate resilience

Final Thought

The discussion surrounding UPM’s Uruguay operations highlights an increasingly important reality: replacing plastic with paper does not automatically eliminate environmental trade-offs. The future of sustainable packaging may depend not only on what materials are used, but also on how responsibly they are produced in a world where water is becoming an increasingly valuable resource.

Source: BBC, UPM, Uruguayan environmental authorities.

Last Updated on 11/06/2026 by Jota Machinery