The Department for the Environment, Food & Rural Affairs (DEFRA) said it was also encouraged by Shotton Papers commitment to the project. WRAP planned to give 23m of aid for development of the UPM-Kymmene-owned plant.
"We are disappointed that the European Commission feels there may be a case for state aid review," said a DEFRA spokesman.
"We believe it is a legitimate use of funding and will push the Commission for a favourable decision. If intervention by ministers will be helpful we will do so."
A report in the next few weeks will invite comments from third parties.
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