In a letter to chancellor Philip Hammond, CPI director general Andrew Large urged government to consider the effects of UK energy taxation policy on the global competitiveness of UK paper products.
Large wrote: “The paper industry is truly global and international investors will compare the costs of operating in any potential location. Our aim has been to ensure that the UK paper-based sector can be internationally cost competitive and can operate on a level playing field with other European and global paper producers.
“In reality, government support has only covered part of the sector, and those parts covered are only receiving part-compensation for the increases in their energy bills; more needs to be done to assist the industry to grow while continuing to decarbonise.”
Last week, PrintWeek reported on how printers and print buyers are bracing themselves for double-digit paper price rises if the pound continues at its current rates against the euro.
Large followed with a number of key recommendations. Focusing firstly on Brexit, he asked that the government support energy-intensive industries through this period of uncertainty to ensure they can contribute to the future growth and development of the UK.
On innovation, he wrote that further investment is required to allow the UK’s paper industry to continue to drive change.
11.6 million tonnes of paper was placed on the UK market in 2015 but UK paper production is at just less than 4 million tonnes per annum.
“There is therefore a significant opportunity for investment and growth in papermaking to take advantage of growing sectors (such as packaging and hygiene) and ensure the UK benefits from new innovation in paper products,” wrote Large.
He also recommended that the Carbon Price Floor (CPF) be abolished rather than frozen, which would send a strong signal to the industry that the government accepts competitively priced energy is important for the UK.
Large also asked that the government take on board the 2050 Roadmap, currently being drafted by the paper and other energy intensive sectors along with the Department for Business, Energy and Industrial Strategy (BEIS). This Roadmap, due to be released in the next few weeks, lays out plans for the full decarbonisation of the paper sector by 2050.
Speaking to PrintWeek, Large said: “With the amalgamation of DEC and BIS into BEIS, what had been a policy priority pushed by one arm of government – but to an extent was the subject of contrary points of view from another arm – is now under one roof.
“We are very hopeful that the department will take a holistic view that sets decarbonisation in the context of an industrial strategy or a competitive and profitable energy-intensive sector.”
The final recommendation is that the government continues to support and partially exempt the paper industry from the effects its renewable policies.
“The CPI has in the past worked very closely with the treasury on a number of issues, particularly on climate change agreements and the development of some of the exemptions and compensations of certain energy taxes,” added Large, who has been at the CPI helm since August.
“It’s not for me to second guess what’s in the Autumn Statement but we would be hopeful the chancellor will see the thrust of what we are trying to do.”
