CPI head calls for paper mill compensation extension

Max Goldbart
Wednesday, March 8, 2017

The head of the Confederation of Paper Industries (CPI) has called for the compensation being provided to some paper mills to offset climate change costs embedded in energy bills to be extended to all UK papermakers.

In a letter penned by CPI director general Andrew Large to the chancellor Philip Hammond, Large stressed the need for compensation to be extended and for it to be long-term policy to encourage investment to the UK.

The letter also calls for the abolition of the Carbon Price Floor (CPF) support taxation, which has currently been frozen.

Large said that for the first half of 2016, UK electricity use for extra large users was at 9p per kWh with the EU average currently at just over 4p per kWh.

“Government policy is to decarbonise but that’s not the issue here, the issue is how we spread the costs of those payments. Energy-intensive manufacturing cannot remain competitive without having its contribution to the decarbonisation agenda supported by the government,” said Large.  

Speaking to PrintWeek, Large also discussed the impact of paper price rises across the country, announced at the backend of last year.

“Any price rises experienced at the moment we would put down to currency and little else. In the longer term we have to look at what happens with regards trade relations with the EU, the rest of the world, and investment in the UK,” he said. 

“I attended briefings at the back end of last week (24 February) put together by the DIT [Department for International Trade] and BEIS [Department for Business, Energy and Industrial Strategy] and the message there was little more than what is currently available in the public domain as a result of speeches made by the prime minister.”

Large also used the letter to request the government continue to work closely with the paper industry and other energy-intensive sectors to develop its 2050 Roadmap for the decarbonisation of the paper sector. The Roadmap is currently in draft form and more information should be available by the end of March.

He also reaffirmed the CPI’s support of the establishment of an Energy Efficiency Fund, linked to the energy intensive sectors, which would play a role in supporting decarbonisation and provide investment.

In this week’s Spring Budget (8 March), Hammond is widely expected to announce a fall in the level of government borrowing for the first time since March 2014, and also provide more details on the industrial strategy first discussed in last year's Autumn Statement.

“When you talk about budgets and possible responses there is a risk of hostages to fortune,” said Large.

“I don’t want to enter into the grounds of speculation but I would say talking to BEIS at ministerial level there is a recognition of the fact that the industrial strategy is going to need a fundamental part of its structure from policies that promote affordable energy and manufacturing.”

Large, who was appointed in September 2016, also issued a number of recommendations before last November's Autumn Statement.

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