If you read more closely, it says that the disc is "51% paper". They don't say what the rest of the disc is made out of. Based on the photo of somebody holding the discs, I assume it's plastic, since they appear to be rigid. It could be something as lame as replacing the current top-layer of CDs (varnish and paint) with paper and glue, for all the article has to say.

Maybe it's plastic on top, with paper "printed" below with the high-density bits as ink, toner, or heaven only knows what else. Clearly, such a system would be more vulnerable to scratching and whatnot.