Director general’s overview A YEAR OF CHALLENGES, PROGRESS AND TIRELESS ACTIVITY


Welcome to our Review of 2011. It’s been an interesting and challenging year...


During November’s European Paper Week, the Confederation of European Paper Industries (CEPI) issued two significant reports.


Its - ‘Sustainability Report 2011’ - demonstrates just how far the industry has come in meeting its environmental goals over the last twenty years.


The second - ‘Unfold the Future’ - sets out a “Roadmap” for meeting the EU’s 2050 target of reducing carbon emissions by 80%.


‘Unfold the Future’ clearly demonstrates the important role the forest fibre industry can play in developing a low- carbon bio-economy in Europe.


But it also contains a clear warning for policy makers that such stretched targets will require new technologies not even invented yet as well as a much more coordinated approach to the production of biomass fuels. Because this report and its conclusions are so central to this industry’s future development in a low-carbon economy, we’ve reprinted its Executive Summary in this Annual Review.


Nearer to home, CPI entered 2011 facing a barrage of measures designed to reform the UK’s electricity market, to meet its Renewables Obligation targets and reduce carbon emissions. If all these had been allowed we would have seen a mass exodus of large chunks of UK manufacturing and an intolerable burden placed on our own industry.


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CPI responded by targeting senior Ministers, from the Prime Minister downwards, with briefing information. We had numerous meetings with senior civil servants and face-to-face meetings with a number of senior government Ministers. We worked tirelessly to influence the work within alliances, whether the Energy Intensive Users Group or the Dods Manufacturing Programme. We played an active part in numerous Parliamentary Groups including the All Party Manufacturing Group and the All Party Energy Intensive Industries Group.


For the first time in many years, both Andy Barnetson and I attended the Tory Party Conference and again were able to tackle Ministers in person. In October our Corrugated Sector Members sponsored their Annual Parliamentary Reception in the House of Commons, which attracted eighteen Members of Parliament.


The first signs that we were beginning to make an impact came in the Chancellor’s speech to the Tory Party Conference where he pledged support for the Energy Intensive Industries (EIIs). Indeed, in his Autumn Statement, he announced a package of measures designed to ease the burden on such sectors, specifically mentioning “Papermaking” – the clearest signal yet that CPI lobbying was working.


Chief amongst these measures was that the Climate Change Levy (CCL) discount for electricity use would be increased from 65% to 90%, which will save the Paper Industry an estimated £6m a year from 2013. There were also announcements about compensation for the


Paper - the sustainable, renewable choice


indirect costs associated with the EU’s Emissions Trading Scheme (EUETS) and the UK’s Carbon Price Floor (CPF) mechanism. It acknowledged that the Electricity Market Reform proposals could also increase costs and that industrial Combined Heat and Power (CHP) systems should be encouraged.


It’s important to remember that we, along with other trade bodies, had already persuaded the Government not to impose additional levies on industry but rather to fund the Renewable Heat Incentive (RHI) and the Carbon Capture and Storage levy out of general taxation.


All in all a very good outcome, although a great deal of discussion and negotiation on the detail will continue with government departments into 2012. Further consultation documents will be issued over the coming months to which CPI will respond. Indeed 2012 will be a critical year as we lead up to the introduction of new Climate Change Agreements (CCA) and phase 3 of the EUETS, both of which come into force in 2013, along with the UK’s potentially very costly CPF mechanism.


CPI has continued to have input into the BREF review process through CEPI. A second draft is expected in early 2012 and we’ve been building on our good relationship with the Environment Agency ahead of implementation here in the UK.


Defra is preparing significant changes to water regulations and we’ve been very active in ensuring that officials fully understand how the sector uses water and what impacts the proposed reforms will have on the Paper Industry.


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