Europe’s pulp and paper industry has urged the European Commission to maintain current EU Emissions Trading System (EU ETS) benchmark values for the 2026–2030 period, warning that the proposed changes could significantly reduce the sector’s ability to invest in decarbonisation projects.
The appeal comes as the European Commission considers updating ETS benchmark values based on data from 2021 and 2022. According to industry representatives, most pulp and paper installations would face the maximum possible benchmark reduction of 50%, potentially increasing compliance costs and weakening the competitiveness of European producers.
The industry argues that the proposed revisions fail to reflect the realities faced by energy-intensive manufacturers in recent years, including soaring energy prices, inflationary pressures and geopolitical instability.
Representatives of the sector highlighted the strategic role that the pulp and paper industry can play in Europe’s transition towards climate neutrality. The broader European bioeconomy was valued at approximately €2.7 trillion in 2023, representing around 5% of the EU’s GDP, while future growth opportunities linked to renewable and fossil-free materials are expected to expand significantly.
Industry organisations also stressed that European manufacturers already bear a disproportionate share of global carbon costs, citing recent analyses indicating that around 80% of worldwide carbon costs are currently paid by European operators and consumers.
For many years, pulp and paper producers have used mechanisms within the EU ETS framework to support investments in emissions reduction projects. The sector is therefore requesting that the benchmark values applied during the 2021–2025 phase remain unchanged throughout the 2026–2030 period. According to industry estimates, the Commission’s proposal could reduce the sector’s annual decarbonisation investment capacity by approximately €1 billion.
The industry notes that the next phase of decarbonisation will require significantly greater financial resources than those invested so far. While greenhouse gas emissions have already been reduced substantially through energy efficiency measures and the replacement of fossil fuels, achieving net-zero emissions by 2050 will require much larger investments in advanced technologies and process transformation.
Industry representatives estimate that annual decarbonisation investments will need to increase to roughly seven times current levels.
The sector also expressed concerns regarding the operation of the EU ETS biomass provisions. Many pulp and paper mills use secondary biomass generated during papermaking processes to produce heat and energy. However, companies that have already invested heavily in biomass-based energy systems may lose access to a portion of free allowances due to the existing 95% biomass threshold, potentially reducing incentives for further investments.
Commenting on the issue, Jori Ringman, Director General of CEPI, said: “Working with the EU ETS as an investment incentive, we have reduced greenhouse gas emissions by more than 50% since 2005. But the rest of the road to net zero emissions by 2050 will be harder, and the proposed benchmark reductions, based on now obsolete projections which do not reflect current market conditions, could make success almost impossible.”
The industry maintains that preserving current benchmark values would allow companies to continue investing in emissions reductions while maintaining competitiveness against producers operating outside Europe, where comparable carbon costs are often not applied.
