In 2008, four paper and board mills closed and three announced consultations, representing a decline of around 675,000 tonnes of UK capacity.

Just under 5m tonnes were produced last year – a 4.7% reduction on the 2007 total.

Peter Seggie, CPI recovered paper sector manager, said: "2008 was again a very demanding year for the UK paper and board industry.

"We hope the planned new paper- and board-making capacity in 2009 and 2010 will reverse the decline in paper and board manufacturing, and secure a better outlook for the industry."

However, further mill closures are also expected over the course of 2009, following announced consultations. 

CPI's preliminary estimate is that in 2009, around 4.7m tonnes of paper and board will be produced domestically.

In terms of recovered paper and board, CPI said a smaller decline in the domestic usage was recorded in 2008.

UK paper and board mills used less than 4m tonnes of recovered paper and board, a much smaller decline of 1.3% on 2007 usage.

Seggie said: "In the UK, great strides continue to be made in increasing the tonnage of recovered paper and board being retrieved from the waste stream.

"However, the excessive reliance on the export market for recycling capacity was cruelly exposed through the last few months of 2008, leading to a negative press on the paper recycling industry."

The UK remains one of the smallest producers of paper and board in Europe relative to its consumption of paper and board products.

CPI has called upon the government to provide more encouragement for investment in UK paper and board manufacturing.