The Confederation of Paper Industries (CPI) has urged the Government to withdraw some carbon levies, saying they place a significant burden on UK papermaking businesses.
In a New Year briefing to MPs, CPI director general David Workman (left) singled out measures such as the Carbon Price Floor (CPF) and the Carbon Reduction Commitment (CRC) as the main reasons of concerns for the energy-intense paper industry.
The CPF is a tax on fossil fuels used to generate electricity, while the CRC is a mandatory carbon emissions reporting and pricing scheme to cover organisations using more than 6,000MWh per year of electricity.
An “ever-growing regulatory burden”, from the Government and the European Union was impacting the UK paper industry an could result in another period of significant decline, as happened in the early 2000s, noted Workman.
He called for the immediate withdrawal of the CPF, or at least the scrapping of its escalator, and of the CRC.
Workman also reiterated CPI’s concerns about the subsidised use of wood as a biomass fuel in large-scale plants and asked the reintroduction of incentives for small-scale on-site industrial Combined Heat and Power (CHP) plants.
Two thirds of paper produced in the UK comes from mills that have installed CHP plants, according to the CPI.
Workman said: “The UK should be seeking to encourage inward investment in papermaking. The current regulatory climate does not offer the sort of incentives that will attract investors. A new legislative and regulatory approach is needed - based less on complexity, taxes and levies, and more on incentives that encourage industries such as our own, to flourish and grow.”