Cepi calls on EU governments to secure dwindling gas supplies for paper production

29 Jul 2022 --- The Confederation of European Paper Industries (Cepi) is calling for national governments in the EU to mitigate the mounting pressure gas shortages are putting on industry as Russian supplies continue to run short. 

In a recent announcement, Cepi demanded Member States make full use of provisions given to them by the European Commission (EC) following its release of the Winter Preparedness Package, which outlined the intertwined needs of European citizens and industry in the face of deteriorating energy supplies. 

The package also introduces a greater level of uncertainty, requiring belated changes to emergency plans previously developed by Member States.

A Cepi spokesperson tells PackagingInsights that “one issue with the package is in the scope of the industries covered by it. It concentrates on a few industries but does not expressly cover some value chains - even though it aims to protect essential products, which includes industries such as paper and pulp. In the case of the packaging industry that might become an issue, even though the upstream pulp and paper industry is covered by the Emergency State Aid framework part of the package.”

“The impacts of the pressure on energy markets have been felt for some time. But production levels and demand are still at good levels, according to our latest data. The question is for how long. Temporary downtimes have already been implemented in some mills for a few months, mostly in Southern and Central Europe.”

Energy restrictions to paper production could severely impact a range of essential EU industries.Gas shortage hits paper industry 
The pulp and paper industry represented by Cepi plays a fundamental role as a provider of critical products, says the organization. As its manufacturing partly depends on gas, possible disruptions in the industry’s gas supply would affect the entire logistics of the EU, availability of paper packaging for food and pharmaceuticals, and essential hygiene products. 

In many places, stopping the provision of gas to paper mills would also mean less heat available to district heating networks supplying thousands of people. Moreover, recycling operations in the paper industry are almost entirely based on natural gas. 

Restricted gas supply could also potentially disrupt related waste management operations and Europe’s leading transport packaging value chain supplies, which rely highly on recycled content. 

“The onus is now on governments to adapt their national emergency plans by the end of September in line with the guidance provided by the EC and allow for a temporary fuel switch where possible,” says Cepi. 

“This should include making full use of the flexibility offered by the EC regarding the application of the Industrial Emission Directive. The new communication part of the package clearly states that gas restrictions and rationing are only to be used as a last resort.” 

Combined heat and power 
To avoid gas rationing and its knock-on impact on the paper industry, Cepi recommends Member States start curtailment from low-efficiency installations producing only electricity or heat. Instead, combined heat and power generation, also known as CHP or cogeneration, uses natural gas more energy-efficiently. 

“To ensure continuity in the manufacturing of essential products, it is important that Member States also consider entire value chains in their response to the energy crisis. National governments must also ensure that critical industries, such as pulp and paper, can renew gas contracts toward the end of the year at an affordable price,” notes Cepi. 

“The pulp and paper industry stands ready to voluntarily support national actions outlined by the EC, and the market-based solutions proposed to maintain stable and predictable energy supply.”

However, legislative proposals released last week contain provisions to enforce rationing measures, including mandatory consumption cuts. This creates uncertainty, says Cepi, which adds to the update of national emergency plans. These already existing plans had, until now, formed the basis for the industry’s own projections and preparedness plans. 

What the reaction of national governments would be in case of severe gas disruptions is now unclear. Cepi is urging political leaders to ensure gas contracts can be renewed at an affordable price at the end of the year. 

By Louis Gore-Langton