Estes's recovery wadding is, obviously, made from toilet paper.  It's been treated in a solution to make it flame resistant so that it is safe and effective at preventing damage to the parachute or streamer of a rocket.

You can make you own recovery wadding by soaking toilet tissue in a borax or boric acid solution.  Both borax and boric acid can be found in most grocery stores. Borax is marketed as a detergent such as the 20 Mule Team brand.  Boric acid is sold as an insecticide - specifically as "roach powder" under several brand names.

To make recovery wadding, start with about 1/2 cup of very hot water.  Add borax (or boric acid) to the water two teaspoons at a time then stir the water to dissolve the powder.  Keep adding the powder two teaspoons at the time and stirring until the powder fails to completely dissolve.   At this point the soultion of powder in water is saturated.

Lay a sheet of wax paper out on a counter and place weights in the corners to hold it flat.

Separate the toliet tissue into short sections and lay them flat on the wax paper.  Don't let two sections touch or overlap.

Pour the borax or boric acid solution into a clean spray bottle (the kind with a pump).  Gently mist the toliet tissue using the spray bottle until all of the sheets are soaked.

Let the tissues dry completely before you try to remove them from the wax paper.