Paper industry beats energy-saving targets

The UK’s papermaking industry has smashed its energy-saving targets for the two-year period from 1 January 2015 to 31 December 2016.

All 45 of the UK’s paper mills take part in the voluntary Climate Change Agreement (CCA) scheme, launched in 2001, which gifts mills partial relief from the Climate Change Levy (CCL) tax in response for them delivering proven energy efficiency improvements.

The paper sector was one of the first to agree to the CCA and by 2006 all mills had signed up.

For the two-year period in question, the sector’s agreed target was to deliver a 7.1% improvement on 2008’s figure, and it actually improved by just shy of 10% (9.7%). Performance is defined in terms of a specific set of energy efficiency measurements mostly related to the use of electricity.

The CCA scheme is administered by the Environment Agency for the government and by the Confederation of Paper Industries (CPI) for the paper mills.

CPI energy data manager David Morgan said that mills had found it easier than people may think to make energy savings of more than 1% a year, and that it was in their interests to reduce energy consumption.

Morgan said: “Ultimately the main driver of energy savings is a cost driver. If you know what you’re paying and you know you can save 10% investing in a piece of kit that saves 10% a year and pays out within two years then you might consider investing.

“Government policy says that if you strive a bit harder then we will you give you partial relief from the CCL.”

If a mill fails to hit its energy-saving target then it is offered the opportunity to pay a buyout fee and remain in the scheme. Failure to pay the buyout fee means leaving the scheme and no longer being entitled to relief. Morgan said the relief was worth around £10m a year to the papermaking sector, which has “on aggregate” passed the scheme.

“It’s hard to find a company that isn’t doing its bit,” he added.

“You’d think the big well-funded companies may be better but we’ve had a look over the years and that’s not the case. Smaller companies will pay more proportionally for energy than larger companies so the incentive for a smaller company to save energy is actually higher.”

The target for 2017-2018 has increased but by a smaller margin than the previous one, set at around the 10%-ahead-of-2008 mark.

“I would hope we can continue to improve our energy efficiency and I’m sure we will but I think it will get tougher and tougher as time goes on,” added Morgan.

Price rises in the paper industry have been prevalent since the start of the year, with UK merchants increasing the price of uncoated paper by between 5% and 7% from 30 May.
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