Cepi called for stronger carbon leakage protection in the 2026 reviews of the EU Emissions Trading System Directive and Market Stability Reserve Regulation.
The association supports climate neutrality by 2050 but argues that declining free allocation and widening international carbon cost differences threaten pulp and paper investment and competitiveness.
Its policy paper warns that ten of eleven sector product benchmarks face maximum reductions for 2026–2030, while about 40 installations relying at least 95% on biomass lose free allocation. Cepi estimates a combined annual financial impact of roughly EUR 1 billion by 2030.
The proposals include retaining 2021–2025 benchmarks for 2031–2040, removing the 95% biomass exclusion, increasing the free allocation share and removing allocation conditionalities. Cepi also seeks a zero Market Stability Reserve intake rate and continued compensation for indirect electricity-related carbon costs.
The paper highlights potential penalties for early biomass investments and recycling operations. It calls for unavoidable recycling-residue incineration emissions to remain outside EU ETS coverage.
Cepi says the sector has reduced emissions by more than 55% since 2005.
