The Confederation of Paper Industries (CPI) has called on the UK Government to change policy to protect the future of the UK paper industry.
It argues that a range of policy initiatives are putting the paper industry at risk.
CPI director general David Workman said: “The UK’s paper industry still operates 50 mills and accounts for 25,000 jobs. It contributes significantly to the UK economy.
“It has reduced energy consumption and carbon emissions by 30 per cent since 1990. It has invested £10 billion in state of the art equipment and combined heat and power and on-site biomass plants. Paper is now the most recycled of materials with a recycling rate of 73 per cent.
“However, Government policy is acting as a huge disincentive to further investment and could result in the closure of many mills over the next decade.”
He warned that the potentially most damaging of these policies is the Carbon Price Floor that begins in 2013 and at £16 per tonne could cost energy intensive industries more than twice the amount paid by EU competitors. It will then rise by £2 each year.
In addition, new Climate Change Agreements come into force next year and DECC has set the paper industry a target of a further 14 per cent reduction in energy use and, according to the CPI, added hugely to the costs of running the scheme by making targets site specific rather than sector specific. The CPI wants ministers to intervene to ensure targets remain achievable.
David Workman added: “Subsidies for energy from waste and large scale energy only biomass should be phased out as they put at risk supplies of the paper industry’s basic raw materials – recycled fibres and wood pulp.
“Raw material scarcity is potentially a huge issue over the coming years and we need a waste strategy based on resource efficiency and a ‘circular economy’ where the priority is closed loop recycling. This means central command and control and a further u-turn on the ‘localism agenda’.”
He also called on the Government to lobby the European Union to prevent additional costs being imposed on the industry by the Industrial Emissions Directive, and the Emissions Trading Scheme.