Hard times



by Massimo Medugno, director Assocarta

The war produces always uncertainty. We were hoping to be out of the tunnel… But is not so.

At moment we fear no direct consequences on the paper trading, but indirect consequences from the stop of the international payment system and the gas availability.

Italy and Europe are largerly dependent from the Russian gas.  Now our strategy is to increase the gas import from the south, using TAP and Algerian and Libyan pipelines. The italian Governement has decide, if necessary, to use coal in the power plants.

The priority in this moment is to assure the sovereignity of the Italian and European countries.

But also in this difficult moment the European institutions are working on the “Fit for 55 package”, in particular about the revisions of the Emission Trading System (ETS) Directive, the Market Stability Reserve Regulation (MSR) and the introduction of the Carbon Border Adjustment Mechanism (CBAM).

For this raison IndustriAll European Trade Union and Cepi, the Confederation of European Paper Industries, in February, wrote to the Members European Parliament (Mep’s) sharing common views on the key proposals about the “Fit for 55” package.  Assocarta and italian trade unions have written the same letter to the 76 italian Mep’s.

They called a strong political support to the following enabling measures:

Limit the impact of energy costs on the industrial production: to keep the industry internationally competitive, the policies need to ensure that the energy-intensive industries, such as the pulp and paper sector, are not subject to a substantial increase of energy costs. Harmonised indirect carbon cost compensation must be maintained.

Promote the frontrunners of the European industrial energy transition by ensuring a level playing field in the internal market and guaranteeing investment security: changes in ETS rules should not be detrimental to competitiveness of compagnies having invested in low carbon technologies and support measures must secure a level playing field within the internal market.

Provide clear and stable rules for a carbon-neutral production in Europe: the rules and methodology need to be clearly stated upfront to adequately reward the installations that will invest in low-carbon technologies.

Provide effective carbon leakage protection: it’s need the free allocation system is maintained and that support is provided to compensate industries for the indirect carbon cost at scale of the current energy price increase.

Recognise that a CBAM is not a universal tool to safeguard all EU ETS sectors against carbon leakage: solutions for export adjustment need to be developed before CBAM can be extended to further industrial sectors. Effectiveness of CBAM needs to be thoroughly analysed and prepared for third country reactions. In the meantime, it should be a complementary carbon leakage measure, coexisting with the current tools.

Ensuring a Just Transition: a strengthening of support from EU and national programmes and EU legislation is needed to ensure a Just Transition. As such, auctioning revenues must better support industrial innovation and labour transitions in the sectors at stake.

The proposed framework needs to strike the right balance between imposing economic burden on “made in Europe” industries and rewarding investments in decarbonisation. To deliver on 2030 goals, investment decisions need to happen in the next few years. While the pulp and paper industry is continuously investing in switching to renewable energy and improving energy efficiency, the European policy framework needs to maintain and create investor certainty. This will ensure a thriving production and growing employment in Europe.