On average, direct and ETS-related indirect regulatory costs (through higher electricity prices) have absorbed more than 40 per cent of the industry’s annual profitability since 2004, the study finds.
“The time has come for a regulatory reset for the paper industry bringing investment back to Europe,” says Sylvain Lhôte, CEPI’s director general.
While the paper industry is engaging in major transformation of its production base to capture both growth opportunities and dramatically reduce its CO2 emissions, such regulatory burden diminishes its investment capability and deters international capital allocation into Europe, CEPI states.
The cumulative cost impact assessment performed for the European Commission by Technopolis reveals the full scale of regulatory costs in the fields of climate, energy and environment policies (2/3 of which arise from climate change and energy regulations). CEPI notes that despite EU leaders’ pledge for smarter regulation and investment in industry, these costs have not subsided in the period since 2004. Planned regulation for biomass-based large combustion plants, ETS and energy-related policies may indeed widen the regulatory cost burden.
About the industry’s competitiveness
In order to prevent the continued erosion of industry’s competitiveness, the EU and its member states must rapidly restore the conditions necessary to fuel transformative investments, says CEPI. “Together with the European Commission we share a common agenda on climate change and sustainability, as evidenced by our 2050 vision to decarbonize by 80 per cent and create 50 per cent added-value. We envision ourselves as leading the transition to a circular, low carbon bioeconomy. We therefore ask the Commission and EU member states to act decisively and put climate, energy and environmental policies back on a pro-investment track.”