The most common and most likely answer to this crossword clue is the 8 letter word WOODCHIP
I've seen this crossword clue in Financial Times
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More clues leading to the result WOODCHIP
Buddy explains!
The straight part
We know that "wallpaper" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case wallpaper = woodchip.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does WOODCHIP mean?
WOODCHIP noun- A small mechanically produced piece (chip) of wood, generally from 0.5 to 10 cm in diameter, used primarily as raw material for pulp, paper and construction boards, as well as fuel and mulch.
- A small fibre of wood; especially such material as used to make ingrain wallpaper, aka woodchip wallpaper. See Wikipedia article on ingrain wallpaper.