Paper can be recycled by reducing it to pulp and combining it with pulp from newly harvested wood. As the recycling process causes the paper fibres to break down, each time paper is recycled its quality decreases. This means that either a higher percentage of new fibres must be added, or the paper downcycled into lower quality products. Any writing or colouration of the paper must first be removed by deinking, which also removes fillers, clays, and fibre fragments.

Almost all paper can be recycled today, but some types are harder to recycle than others. Papers coated with plastic or aluminium foil, and papers that are waxed, pasted, or gummed are usually not recycled because the process is too expensive. Gift-wrap paper also cannot be recycled due to its already poor quality.

Sometimes recyclers ask for the removal of the glossy inserts from newspapers because they are a different type of paper. Glossy inserts have a heavy clay coating that some paper mills cannot accept. Most of the clay is removed from the recycled pulp as sludge which must be disposed of. If the coated paper is 20% by weight clay, then each ton of glossy paper produces more than 200 kg of sludge and less than 800 kg of fibre.