The report deals with issues such as increased global competition, climate change and energy and wood supply.

Commission vice-president Günter Verheugen, responsible for enterprise and industry policy said: "The forest-based industries are in the process of adapting towards a low-carbon economy.

"We should support them in this effort through a policy framework which allows this important sector to remain competitive, while contributing to our ambitious climate change and energy policies."

The commission is proposing to increase access to raw materials by promoting the planting of forests and the collection of recovered material, and will explore the advantages of harvested wood products in terms of carbon storage.

The plan includes recommendations for member states and industry to consider the Strategic Research Agenda in their research programmes and make adequate provision for education and training.

Internationally, the Commission supports the elimination of tariff and non-tariff barriers.

CEPI welcomed the report, which it said went a long way to reassuring the industry and providing support on issues such as the supply of raw materials.

Teresa Presas, managing director of CEPI, said: "We are at a crossroads, on the one hand we will work with the European Commission to implement the actions identified in the Communication but on the other we need to ensure that the proposals, published in the Climate Change and Energy Package, allow us to do it by not impeding our competitiveness and there are still several unanswered questions.

"It is essential that the contribution of the pulp and paper energy to delivering renewable energy and reducing carbon emissions is recognised and that the increasing competition for wood does not result in a negative impact on the competitiveness of our sector in Europe," she added.