Emissions drop at UK Paper Mills in 2014

(Editor's Note: Based on a CPI press release of April 13, 2015)

Figures released by the European Union Emissions Trading System (EU ETS) confirm a continued fall in emissions from UK paper mills.

Official 2014 emissions data have just been released and the downward trend in emissions from the sector has continued—2014 emissions being 13.5% lower than those in 2013 and an impressive 42% lower than in 2008. While some of this reduction can be attributed to lower production, the great majority has been delivered by investment in new power generation and a continued focus on energy efficiency.

Allowing for changes in production levels, the figures show that the amount of EU ETS reported carbon dioxide emitted by UK paper mills (per tonne of production) has fallen by a third in just seven years—from 0.64 tonnes CO2 per tonne of product to 0.42 tonnes.

HOW HAS SUCH A BIG CHANGE BEEN DELIVERED?

Papermaking is intrinsically energy intensive, and mill operators are constantly seeking ways to incrementally improve efficiency to remain competitive—energy inefficient mills cannot compete with more efficient competitors. All mills have energy managers and initiatives to identify and deliver energy savings through the use of new pumps, improved lighting, better process controls and the like.

As well as these incremental changes, UK mills are big users of highly efficient Combined Heat and Power (CHP) plants, making much of their own electricity and using heat wasted in conventional power generation. Since 2008, a number of mills have invested in new CHP, with all sector CHP now being either gas or biomass powered; all old coal CHP plants have now been decommissioned. This investment in new gas and biomass powered CHP has seen hundreds of millions of pounds invested by the sector, resulting in greatly reduced EU ETS emissions.

POLICY FAILINGS

With such continued success in reducing CO2 emissions, it is especially frustrating to note that the sector remains short of EU ETS allowances. The EU ETS scheme recognizes that energy intensive European industrial operations cannot remain competitive if competitors outside the EU do not face the same carbon costs. Accordingly, EU ETS provides that mills should be granted free allocations (set by the most efficient sites) to avoid carbon leakage. However, the agreed number of free allowances has been slashed to ensure Member States can continue to sell a large number of allowances to raise revenue. In the UK, the effect of this reduction (or cross sector reduction factor) has resulted in mills receiving around 100,000 fewer allowances than it was agreed they need, with the shortfall increasing each year. CPI has consistently called for this issue to be urgently addressed by Government.

Equally serious, is that EU ETS now provides zero free allocation for electricity generation, acting as a barrier to new CHP and a penalty on existing plant. While the UK Government has sought to address this issue by offering compensation to some, but not all, installations, such compensation is guaranteed only in the shorter term and misses a real opportunity to incentivize on-site power generation.

Said CPI Director General, David Workman, “These figures show that UK paper mills are more than playing their part in reducing emissions and helping the UK reach climate change related targets. However, Government must also play its part by setting long-term stable policies to ensure that UK installations can remain internationally competitive while continuing to de-carbonize. We look forward to working with a new Government to take forward the sector 2050 Roadmap just published.

Don’t forget that more than half of the paper used in the UK is made elsewhere, with associated emissions not being counted in the UK. We’d much rather see the paper used in the UK being made in highly efficient UK mills, providing jobs and creating wealth here. Since 2008, our production has fallen by around 600,000 tonnes. Nonsensically, emissions associated with imported paper simply aren’t included by Government in UK emissions data.”

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