The pulp and paper manufacturing sector is energy and raw materials intensive, with high capital costs and long investment cycles. The industry has an excellent track record in resource efficiency and innovation. Thanks to its knowledge of wood fibre, the pulp and paper industry is at the forefront of developing innovative products alongside more traditional products. It is a pioneer in making the EU low-carbon bioeconomy an industrial reality.
Why the pulp and paper industry is important
- Employment - the manufacturing industries employ around 647,000 workers in 21,000 companies.
- EU economy – the annual turnover from the production of pulp, as well as graphic, hygienic, packaging and specialised paper grades and products is around EUR 180 billion.
- Environment – thanks to improved process efficiency, the industry has become more energy self-sufficient and less CO2-intensive by generating more than half of its primary energy from biomass.
- Recycling – voluntary industry-led initiatives in addition to legislative measures, have resulted in a paper recycling rate exceeding 70% in Europe. Raw materials used in the production and converting of paper and board come from sustainable sources.
- Innovation - the high level of expertise and continuous research and innovation allow these industries to exploit new business models, develop novel products and technologies, and progress toward a low-carbon bioeconomy.
Main challenges faced by the industry
- Lower consumption - graphic paper consumption in Europe continues to decrease due to digitalisation. This is counter-balanced by growth in packaging and hygiene papers however. The creation novel bio-based products creates vast opportunities for the sector.
- Trade barriers - the sector is increasing its share of exports outside the EU but tariff barriers and protectionist subsidies for rival goods create an uneven playing field. Taxes and export duties imposed by non-EU countries on wood exports raise concerns. For example, fibre raw material represents the highest share of production costs, and so its availability at affordable prices is crucial for the sector.
- Raw material supply - the demand for domestic EU wood supplies by end-users such as bioenergy firms is rising. Increasing the mobilisation of wood in a sustainable way and developing new, innovative ways to further optimise the added value from raw materials through the cascading use of wood, would help to match wood supply and demand.
- Recycling - the paper recycling rate in Europe is very close to its maximum. Improvements in separate collection systems and innovation in sorting and recycling technology can further increase the quality and availability of secondary raw materials. The supply may also be challenged by the increasing amount of recovered paper exports to non-EU countries.
- Energy prices - rising energy prices in Europe, combined with increasing gas prices compared to North America, place the sector at a global competitive disadvantage.
- The EU environmental, energy, and transport policies have a major influence on the future of the sector. A good regulatory framework is essential to supporting sustainable growth, investor certainty, and a level playing field.
Opportunities for the paper and pulp industries
- Resource efficiency - continuous technological improvements can further reduce environmental impacts and optimise the use of resources such as raw materials, water, and energy. New processes can offer innovative ways to develop new products and applications based on cellulose fibre that generate more added value. Breakthrough technologies, such as those reducing heat use in paper production through reduced water consumption, are needed to achieve the sector's objectives for the 2050 Roadmap towards a low-carbon bio-economy. These objective include an 80% CO2 reduction and 50% value growth by 2050.
- Bioeconomy - the EU pulp and paper sector is taking advantage of the opportunities offered by the bioeconomy. New business concepts will allow it to use the entire potential of wood and wood fibre to produce products and novel materials for the textile, cosmetics, food, and pharmaceutical industries; bio-based fuels and chemicals; and traditional wood-based products.
- A Blueprint for the EU Forest-based Industries
- Communication on a new EU Forest Strategy: for forests and the forest-based sector
- Study on the Wood Raw Material Supply and Demand for the EU Wood-processing Industries (Indufor) - Part 1 (7 MB) - Part 2 (5 MB) - December 2013.