Short summary: The proposal to reduce the VAT rate for e-books will not necessarily reduce the current price of e-books, as publishers may not pass this reduction to the end consumer. On the other hand, if the VAT increases for print products, this will inevitably reduce print book sales, as consumers will need to pay more. If the proposal leads to replacing printed books with e-books, we would find it unfair and not aligned with the general interest. These concerns should be addressed by maintaining the current reduced VAT rates for paper books, newspapers and periodicals and ensuring an equal and neutral treatment for both technologies. In addition, the Commission should encourage Member States to make full use of the possibility to reduce the VAT rate they apply to both printed products and e-books.
Media Centre - Position Papers
Short summary: We support a completely free market for transport services in the European Union that can improve industry’s competitiveness. Liability of shippers should be proportionate. Simple cabotage rules allowing the development of today’s complex and international supply chains should be promoted throughout the EU.
Joint Statement on the legislative review amending the Waste Framework Directive and Packaging and Packaging Waste Directive
1. Ensure a life-cycle approach in legislation, taking into account the functionalities of packaging, such as preserving the entirety of resources invested in the packaged product along the entire value chain.
2. Safeguard the Internal Market (the legal basis of the PPWD) to ensure the free movement of packaging and packaged goods. Avoid de facto trade barriers for packaging and packaged goods; retain the PPWD’s pre-notification procedure and Article 21 Committee.
3. Ensure relevance of the EU EPR “general requirements” for the packaging waste stream, alongside nationally and clearly defined roles and responsibilities, for all actors involved in EPR implementation. Obligated costs for producers need to be clearly demarcated and net of revenue from the sale of secondary raw materials.
4. Allow free competition so that producers can choose the packaging most appropriate for the product and distribution system. Legal requirements that mandate additional packaging reuse systems alongside existing EPR systems risk undermining the cost-efficiency of EPR and recycling efforts/investments. Resist national measures to promote packaging reuse systems that will distort the Internal Market.
5. Set realistic and achievable packaging “preparing for reuse”/recycling targets, based on an updated ex-ante impact assessment, known starting points, as well as a harmonised and clarified measurement point and calculation methodology.
The undersigned organisations1 represent a wide range of sectors in the packaging value chain. They support an enabling EU policy framework that facilitates sustainable resource use from a full lifecycle perspective, incentivises economies of scale and takes into account value chains at all levels with each of their different needs, supply and demand realities. To further enable our industries to transition towards a resource-efficient and competitive Circular Economy, our associations have the following recommendations for the European Parliament and Council to ensure EU legislation is relevant, achievable and proportionate for packaging and packaged goods.
1. LIFE-CYCLE APPROACH: In addition to end-of-life considerations, measures must also take into account the key functionalities of packaging, such as preserving the entirety of resources invested in the packaged product along the entire value chain.
- Packaging plays a positive role in a Circular Economy by optimising resource use, minimising product (e.g. food) waste and protecting products all along value chains. Packaging is cross-sectoral and, in order to perform its functions, the full lifecycle of the packaging, intrinsically connected with the product it contains and value chain, must be considered in its entirety. The choice of packaging which best meets the functional requirements for the product concerned, needs to be made on a case-by-case basis.
- Therefore, we strongly caution against measures that set restrictive/prescriptive requirements for packaging attributes (e.g. single-use/multiple use, recyclable or non-recyclable, bio-based and/or biodegradable, recycled content, single-serve/dose) without regard to the impact on the life-cycle of packaged products themselves. Such legal requirements for attributes of packaging could imply significant costs for businesses in Europe to adapt whole supply chains, stifle product innovation, distort the Internal Market (see point 2) and might lead to a net detrimental environmental impact on packaged goods. In case of restrictions on single-use packaging, it also ignores (modern) societal and consumer trends, and risks being perceived as the EU overstepping its boundaries.
- We also believe it is difficult to set and fairly calculate packaging prevention targets and to ascribe related targets to different sectors. The demand for packaging is linked to the demand for packaged goods. Changes in demand for packaged goods and associated product innovations determine the types of packaging placed on the market and the amount of protection that their contents need. Prevention is already addressed under the PPWD’s essential requirements in Annex II. In addition, there is already an economic incentive for producers to optimise the amount of packaging they use (over and above the cost of the packaging materials) since packaging EPR fees are based on weight.
2. INTERNAL MARKET: Safeguard the Internal Market (the legal basis of the PPWD) to ensure the free movement of packaging and packaged goods
- A Circular Economy in Europe cannot be achieved without a properly functioning Internal Market, guaranteed by the PPWD that has the Internal Market as its sole legal base. That legal base, alongside its harmonisation and environmental objectives, gives companies in the packaging value chain the confidence to invest and innovate in order to meet the growth, competitiveness and employment objectives of the Circular Economy Package.
- Therefore, we recommend avoiding measures that could lead to divergent national packaging design requirements, since they create de facto trade barriers for all packaged goods. The PPWD contains an important obligation, under Article 16, on Member States to notify their intention to introduce such measures. This obligation ensures that national measures do not disrupt the Internal Market for packaging and packaged goods.
- Likewise, promoting national reduction quotas and even national bans for certain packaging types, materials or systems is inappropriate (see also point 1). Such measures would create real trade barriers in the EU which the PPWD explicitly aims to avoid. Great care must be taken not to undermine two decades of success in safeguarding a single European market for packaging and packaged goods. As long as a packaging respects the essential requirements of the PPWD, it must be guaranteed access to market and free movement in the EU.
- The Commission should continue to be assisted by the Committee for the Adaptation to Scientific and Technical Progress, composed of the representatives of the Member States and chaired by the representative of the Commission as stated in the initial PPWD Article 21. This article allows the practical implementation of the PPWD to be kept under review. The composition of this Committee should explicitly include national environmental/waste and industry experts in order to mirror the PPWD’s Internal Market legal base, as well as its dual objectives.
3. EXTENDED PRODUCER RESPONSIBILITY: Ensure that the EU EPR “general requirements” in the WFD apply to all schemes and are made relevant for the packaging waste stream, respecting the PPWD’s legal base. These EU requirements sit alongside explicitly specified roles and responsibilities, defined at national level by Member States, for all actors involved in EPR implementation. This allows Member States to continue to set up EPR systems according to their national requirements, in line with the subsidiarity principle. Additionally, obligated costs for producers need to be clearly demarcated and net of revenue from the sale of secondary raw materials.
- This will ensure that national measures to implement the EPR “general requirements” cannot disrupt the Internal Market for packaging and packaged goods, since the PPWD has the Internal Market as its legal basis which the WFD has not. For instance, “including all the following costs” suggests that the basis of the costs may differ from one Member State to another, potentially fragmenting the Internal Market. The basis of the costs should be based on harmonised criteria established by the proposed Member States’ exchange of information forum (see also point 2). However, actual fee setting should remain the responsibility of individual EPR schemes within a Member State.
- Ensure a clear net cost demarcation for the obligated industry at EU and national level. An unlimited obligation for producers to “cover the entire cost of waste management” is disproportionate to the producer’s role and responsibility for the separate collection, sorting and related treatment operations of used packaging for recycling. In line with the Circular Economy’s objectives, we strongly support the proposed net cost principle/incentive which takes into account the revenues from sales of secondary raw packaging materials.
- In addition, we believe that producers need to be able to drive waste prevention within their production, because it is the producer who knows what the packaging needs of their products and supply chains are (see point 1). Therefore, we recommend keeping prevention requirements outside the EPR “general requirements”, which apply to all waste streams covered by EPR and the different ownership models of EPR schemes. Waste prevention goes beyond the end-of-life role and responsibility of packaging EPR schemes and is related to the life-cycle of the entire product.
4. REUSE: Allow free competition between packaging materials and formats so that producers can choose the packaging most appropriate for the product and its distribution system. Legally requiring new packaging reuse systems to be established alongside existing EPR systems will undermine the cost-efficiency of EPR and recycling efforts/investments and distort the Internal Market.
- Avoid creating an obligation for Member States to introduce new reuse systems in markets where EPR and recycling systems are well-established. Studies show that imposing new systems to promote reuse activities alongside well-functioning recycling systems erodes the (cost-) efficiency of household-based collection systems as existing infrastructure would no longer be used to its full potential. In addition, if existing installed production capacity is required to be substituted by reuse systems, substantial capital and operating costs will be imposed on producers and retailers for which no economic return is possible without incremental sales volumes or increased prices for consumers. Additional reuse systems should be subject to a complete ex-ante technical, social, environmental, and economic analysis.
- In addition, national measures to promote packaging reuse systems tend to undermine the Internal Market because they favour local trade exchanges/sales as reusable packaging systems rarely make economic or environmental sense over longer distances.
- We support smart regulation for the PPWD that allows those Member States with existing reuse systems for packaging in place to be credited for their efforts when calculating their progress towards the EU packaging targets. This can be done by deducting reusable packaging (which is not part of ‘packaging waste generated’) from the reported ‘packaging placed on the market’ (all packaging), as part of the target calculation methodology. At the end of its reusable life, it becomes waste and thus part of ‘packaging waste generated’. In this spirit, we support Member States and MEPs request not to mix waste with products and thus to retain the 2008 WFD definition for ‘preparing for reuse’.
5. PACKAGING TARGETS: Set realistic and achievable packaging “preparing for reuse”/recycling targets, based on an updated ex-ante impact assessment, known starting points, as well as a harmonised and clarified measurement point and calculation methodology.
- We support realistic and achievable “preparing for reuse”/recycling packaging targets based on clear starting points. Hence, any changes to the structure of targets, definitions, measurement points and related methodology need an updated ex-ante cost/benefit analysis. Such an analysis will assess the impact of these changes against target achievement and economic and environmental benefits.
- Robust measurement and accurate reporting are crucial to ensure transparent and comparable data across the EU. The Commission’s proposal rightly establishes the point of measurement for packaging recycling as the point of input to a final recycler, after sorting operations have been completed. The option to count output from sorting operations under certain conditions is fully consistent with this measurement approach.
- We support the current method of counting recycling of composite packaging towards the rates and targets of the predominant material. It is neither technically nor administratively feasible to count the recycling of material components of composite packaging coming out of a recycling process towards their individual material recycling rates. In addition, counting such materials separately is unlikely to have any significant impact on overall packaging material recycling rates.
We trust that the above is constructive and would welcome the opportunity to reflect further on the points outlined above together with the European Parliament, Council, Commission and other stakeholders.
Signed by the following industry organisations (in alphabetical order)
ACE – The Alliance for Beverage Cartons and the Environment
AGVU - Arbeitsgemeinschaft Verpackung und Umwelt e.V., Germany
AIM – European Brands Association
A.I.S.E. – The International Association for Soaps, Detergents and Maintenance Products
ARA – Altstoff Recycling Austria AG Packaging Compliance Scheme, Austria
ARAM – Romanian Association for Packaging and the Environment
BIHPAK – Bosnia and Herzegovina Association for Packaging & Packaging Waste Management
CEPI – Confederation of European Papers Industries
CICPEN – Czech Industrial Coalition on Packaging and the Environment
CITPA – International Confederation of Paper and Board Converters
Cosmetics Europe – The Personal Care Association
DSD - Der Grüne Punkt Dual System for Packaging Recycling, Germany
Eco-Emballages – Packaging Recovery Association, France
EuPC – European Plastics Converters
EPBA – European Portable Battery Association
EUROPEN – The European Organization for Packaging and the Environment
FEA – European Aerosol Federation
FEFCO – European Corrugated Packaging Association
FEVE – The European Container Glass Federation
Flexible Packaging Europe
IK- Industrievereinigung Kunststoffverpackungen e.V., Germany
INTERGRAF– European Federation for Print and Digital Communication
INCPEN - The Industry Council for Research on Packaging and the Environment, UK
MPE - Metal Packaging Europe
Miljöpack – Trade Industry Group, Sweden
Pack2Go Europe - Europe’s Convenience Food Packaging Association
Pakkaus – Finnish Packaging Association
REKOPOL - Recovery Organisation S.A., Poland
REPAK - Packaging Recovery Organisation, Ireland
Serving Europe - Branded Food and Beverage Service Chains Association
SLICPEN – Slovak Industrial Coalition on Packaging and the Environment
Sociedade Ponto Verde, S.A. – Packaging Recovery Organisation, Portugal
UNESDA – Union of European Soft Drinks Associations
Valpak - Environmental Compliance, Recycling and Sustainability Solutions, UK
1 This joint statement captures the main points our associations share in common and does not preclude each of the undersigned organisations from issuing individual positions that are more focused on their specific sectors.
2 Roland Berger, The consequences of a deposit system for disposable packaging based on the German example, 2008
3 Communication (2009) from the Commission: Beverage packaging, deposit systems and free movement of goods (2009/C 107/01); European Commission (1999) Reuse of primary packaging
Statement in view of the Environment Council on 20 June 2016
As a market-based system, emissions trading has the best potential to reduce greenhouse gas emissions in the lowest-cost way, and to create a market signal to drive low-carbon investment. The undersigned associations support the principles of the EU ETS as the cornerstone mechanism to deliver cost-efficient emission reductions in the EU while at the same time securing a global level playing field for industry.
But, for this to be achievable, we need to ensure that the EU ETS works for every covered sector. We must make sure that the energy-intensive, carbon-intensive and/or trade-exposed industries, operating in a highly competitive global market get the right kind of support to enable them to continue to reduce emissions within the EU. For the power sector, which needs significant levels of investment to secure and decarbonise the electricity supply, we must ensure a carbon price that provides a meaningful signal towards the sector’s low carbon investment decisions today and tomorrow.
The post 2020 ETS reform must focus on achieving long-lasting, holistic and effective changes to the system in order to instil confidence in the market. An essential element of the reform is to provide long-term predictability and legal stability to industry and investors, and to avoid the quick-fixes and piecemeal approach we have seen in the recent past.
In this respect, the European Commission’s proposal to set, in the ETS Directive itself, the ratio between the shares of allowances for auctioning and those for free allocation is an element of certainty. However, the rules should ensure the right balance between ensuring liquidity with regard to the available auctioning volumes and providing the necessary volume of free allowances on the level of best performers in order to avoid carbon and investment leakage.
The undersigned associations are committed to make the reform of the EU ETS a success. But it must be a success for all the covered sectors. As representatives of major industrial sectors, we will remain firm on this point as this will be essential to develop and strengthen the industrial value chain across Europe as well as European industry’s international competitiveness.
In spite of the difficult economic context and an increased competition in the global markets, the European pulp, paper and board industry remains a world leader and a net exporter as well as the provider of 1.5 million direct and indirect jobs in Europe.
EU markets have been fully open since January 2004, unlike some competitors in their home countries. 40% of EU paper and board exports face tariff barriers! The sector is seeking a level playing field for both its products and its raw materials through multilateral and bilateral negotiations and high level talks with EU trading partners. Free access to pulp and paper and board foreign markets, but also raw materials and energy is a must.
Fair competition is also vital to the European pulp, paper and board industry and its workers, who need to see unfair trade practices such as dumping and subsidies, protectionism and discriminatory measures fought. A strong set of trade defence tools is crucial to ensure, when necessary, the rapid implementation of efficient trade defence measures and restore a level playing field for our industry and workers. Strong support from the EU Commission is required in order to secure international trade rules and WTO obligations as well as bilateral agreements are well implemented by all EU trading partners and WTO members.
The opening of the foreign markets has to be achieved primarily through multilateral negotiations in WTO, by reflecting the recent developments that have seen emerging countries like China, Brazil or Indonesia turning into global industrial leaders.
As multilateral agreements require long negotiations and sustained efforts, a better access to foreign markets, raw materials and energy markets should be sought through the conclusion of ambitious bilateral trade agreement negotiations with a view to supporting the re-industrialisation of Europe and to promote the principles of fair trade. These negotiations should contribute to the suppression of tariff barriers as well as non-tariff barriers, and aim at regulatory convergence.
Plurilateral negotiations should also be encouraged as they can offer a pragmatic way to further liberalise trade while achieving other goals, such as the completion of ambitious climate change and environment protection targets. The European Social Partners in the pulp, paper and board sector are of the opinion that, due to their sustainable nature, all pulp, paper and board grades should be considered as environmental goods and therefore fully included in the environmental goods list currently being negotiated.
Pulp, paper and board are based on renewable raw materials originating from sustainable sources and are recyclable. They contribute directly and indirectly to environmental protection, climate action, green growth and sustainable development. They are manufactured by an industry that has substantially reduced its footprint on the environment, while reaching high social standards.
At the core of the bio economy, is the production of not only the original bio-based product - paper and board, but also new and innovative products that can substitute for fossil fuel-based products through the efficient use of renewable raw materials.
Allowing the European pulp, paper and board industry to compete on a level playing field at global level should be the aim of EU trade strategy as it is the best way to secure EU’s competitiveness as well as investors’ long-term commitment to Europe and create jobs and growth!
The sustainable forest management framework has evolved and strengthened over time balancing a market based demand for wood products and bioenergy with the other environmental and climate functions of the forest.
More recently, the EU policy framework to support the use of energy from renewable sources has led to a strong increase of bio-energy use within short timeframes. The increased demand has led to rising imports of wood. To ensure the sustainability of the policy induced increase of bioenergy use and wood imports, the following issues have to be considered:
• Do the needs for wood biomass lead to any of the following critical consequences: resource depletion, land conversion, negative impacts on biodiversity?
• Is the direct burning of wood biomass an efficient use of a raw material that could first be used for higher value purposes?
• How could monitoring, reporting and verification ensure carbon sustainability?
To address the increased use of wood for energy and to design a sustainable biomass policy framework for the post 2020 period, CEPI believes that the following criteria for the production of bioenergy counting towards EU renewable energy targets should be considered while taking into account the use of existing legal and market based instruments at national, EU and global level.
1. Biomass sourcing
Biomass should come from sustainable sources. Biomass is a renewable source of energy if it does not lead to harvesting beyond the sustainable level and preserves the other functions of forests according to the principles of Sustainable Forest Management (SFM).
a. Carbon sustainability:
Forest biomass shall come from countries with credible LULUCF accounting and reporting. If biomass is procured from non-LULUCF accounting countries, credible proof has to be given that there are systems for monitoring, reporting and verification in place ensuring that the harvesting rate in this country is below 100% in the long term and the biomass does not come from land conversion (leading to depletion of carbon stock). Where there is overharvesting at the country level, the energy producer has to give sufficient proof that there is no overharvesting at the relevant regional level of the biomass origin.
Reporting should continue to take place according to the instant oxidation principle. This ensures that the climate effect of the wood use is allocated to the country in which the forest is harvested.
b. Forest management
Forest biomass shall come from legal sources.
In order to ensure that the three main challenges relating to forest management – resource depletion, land conversion and loss of biodiversity – are addressed, the following trend indicators provide sufficient assurance:
1. Growing Stock: The felling rate (harvested volume/net annual increment) must be lower than 1 in the long term (information source: e.g. National Forest Inventories) in order to avoid overharvesting.
2. Gross Deforestation: The area under forest cover must be maintained (except if deforestation is the result of “land sealing” (infrastructue building, urban expansion, etc. which is limited in surface) (information source: e.g. NFI)
3. Biodiversity: No biomass harvesting can take place in protected forests, unless the protection decision allows management and harvesting.
Additional considerations on the proposed approach:
• The measurement of meeting the above indicators must take place within well defined spatial and time dimensions. As far as the spatial dimension is concerned, the country level is relevant. Choosing the appropriate spatial level will allow for robust reporting and monitoring, both in terms of carbon emissions and removals (LULUCF reporting), as well as in terms of forest inventory (fellings areas, etc.)
• A stand level and short-term horizon is not acceptable as it would make compliance with such indicators both impossible and irrelevant. Harvesting lowers the carbon storage in stand level for a certain period, but at the same time at the landscape level, carbon storage continues to be maintained or increased.
• The obligation of proof should be solely with the energy producer.
• Demonstrating compliance should be credible, but not too burdensome to the suppliers and the buyers. Red-tape leading to extra cost would be a disincentive to additional mobilisation of forest resources.
• Similar to the EU Timber Regulation an approach of risk assessment (via national/regional (where relevant) data according to the three indicators outlined) should be investigated. Only if the risk assessment at country level can not give thourough proof, the regional/landscape level should be adressed.
• New means of proof should avoid being a further burden when competing with other industries and products based on fossil and more carbon intensive raw materials as well as with forest industries based outside Europe.
• The tools developed by the forest sector should be used to proof the origin from sustainable sources along the chain of custody.
• In that context, different voluntary instruments and tools addressing forest management should be evaluated and recognised.
2. Biomass conversion
a. Greenhouse Gas Savings criterion:
There should be GHG savings compared to the average European fossil fuel based generation of electricity and heating and cooling.
• The GHG emissions reduction criteria should be based on the GHG emissions calculations methodology recommended by the Commission in 2010 (COM(2010)11) and confirmed in 2014 (SWD(2014)259).
• There should be coherence with the biofuels GHG emissions threshold (60%) as wood can be used to produce power, heat or biofuels.
• The methodology and default values should be established for at least the same period as the post-2020 RES target.
b. Conversion efficiency:
Heat and electricity based on solid and gaseous biomass should be produced at an overall efficiency of at least 70% (lower for small installations (e.g. < 1 MW) or where CHP cannot be applied). Member States should not support but further even avoid the use of biomass in new conversions of coal plants with the current low efficiencies. Supporting co-firing of biomass in coal plants at low efficiencies is an environmentally harmful subsidy.
Meeting the conversion efficiency and GHG savings criteria should be verified by schemes similar to biofuels sustainability criteria. The obligation of verification should be with the energy producer. Mutual recognition of schemes should be ensured to limit red tape.
A background paper accompanying the position can be downloaded here.
This consultation was launched to collect views and suggestions from different stakeholders and citizens in view of the review of Directive 2012/27/EU on energy efficiency (Energy Efficiency Directive or EED), foreseen for the second half of 2016. The full consultation replies can be found here.
Here are some highlights:
In reviewing the EU energy efficiency target for 2030, the Commission should have in mind that energy efficiency has to be achieved by voluntary initiatives, rather than by mandatory requirements. An EU-wide binding energy saving target until 2030 would limit the scope for economic room to manoeuvre. A rigid objective as a binding cap on energy consumption would impede growth. Therefore, it is of vital importance that the Commission designs the target in such a way that recognises early measures and focuses on lowering the energy intensity, not the energy use as such. The European framework has to create ideal long-term conditions to realize energy efficiency measures covering all sectors. This is particularly important for the non-ETS sectors, where incentives to improve energy efficiency are often insufficient. Effective incentives are needed, especially for research and development as well as for the cost-efficient implementation of investments in energy efficiency measures.
In view of achieving the new EU energy efficiency target for 2030, we believe that energy efficiency work must be done locally and as close to the energy consuming unit as possible. The role of the EU should therefore only be limited to setting targets, creating the overall regulatory framework, monitor the process in terms of energy efficiency improvements and give non-binding advice to those countries that are not able to reach the given goals. But details on how to implement energy efficiency policies need to be formulated at national or even industry level.
The EU should also promote and finance research and innovation in the field of energy and process technology to enable breakthrough technologies.
Regarding the most appropriate financing mechanisms to significantly increase energy efficiency investments in view of the 2030 target, it is important to find a high efficient way of financing. To make sure that the highest possible potential is tapped with the available amount of money, it is important to prefer energy investment funding for measures with high returns on investment. One way would be to support investment in form of cheap call money from a revolving fund for efficiency measures that would otherwise not take place without support. Ensuring that the invested money always returns to the fund (e.g. oney is paid back to the fund in the same rate as the energy savings pay back), allows multiple use of the available budget and therefore enables highest efficiency.
Interest-free loans to finance investments are also a way to achieve energy efficiency measures.
Tax decrease/benefit could also be envisaged if companies are participating in energy efficiency programs and achieving results.
Income from auctioning of emission rights should also be used to finance energy efficiency measures.
CEPI's response to EU Commission's Preparation of a new Renewable Energy Directive for the period after 2020
In its Energy Union Framework Strategy, the Commission announced a new renewable energy package for the period after 2020, to include a new renewable energy directive (REDII) for the period 2020-2030 and an updated EU bioenergy sustainability policy. This consultation covered the REDII aspects. You can find the fully completed consultation here.
Here are some highlights:
CEPI believes that the RED has been successful in deploying large volumes of renewable energy sources. However, the costs directly and indirectly associated to such deployment in most Member States have been quite significant. The energy
prices gap with competing economies has widened, with policy-induced costs being particularly relevant in electricity prices. This has a negative impact on industrial competitiveness, as acknowledged by the 2014 Commission Guidelines on State aid for environmental protection and energy 2014-2020. Weather dependent renewable energy, solar and wind, is remarkable and growing challenge to secure availability of electricity.
The RED has also led to measures promoting the demand for bioenergy, not sufficiently taking into account the availability of wood for the wood processing industry, which is producing substitutes to fossil fuel based and more carbon intensive products. This negative impact on the competitiveness of the wood processing industry is hampering the uptake of the bio-economy and
its climate change mitigation potential. Support to bio-energy should rather focus on stimulating the supply of wood.
Member States have a responsibility to ensure that additional demand for bioenergy is met by supply of raw materials, taking into account local biomass availability. Therefore demand-side measures should be balanced with supply-side measures to mobilise existing additional potential of wood that can otherwise not be used for wood and fibre based products. Reference could be made to the biomass mobilisation brochure jointly developed by DG AGRI, Forest-Europe and the UNECE-FAO.
Contribution by CEPI to the review of the EU Timber Regulation (995/2010/EC)
In the ongoing review of the EU Timber Regulation, the European Commission should
• Include printed products in the scope of the regulation
• Strengthen the role of forest certification schemes in the risk assessment
• Coordinate consistent enforcement among Member States
• Align with other world regions with legislation on timber legality
Illegal logging has negative effects on the populations depending on forests and the timber and timber products they sell to sustain their livelyhoods. Illegal logging is a driver of climate change and deforestation. Illegal logging also tarnishes the image of companies sourcing timber responsibly. Cheap imports of illegal timber and timber products distort competition at a global level. CEPI has welcomed proportionate measures against the illegal logging and trade of timber and welcomed the EU Timber Regulation introduced in 2010. CEPI believes similar legislation and responsible sourcing requirements should be applied to all raw materials, not only to wood and wood based products.
European paper Industry and timber legality
The European paper industry has a longstanding commitment to sourcing legal and sustainable timber. In 2005, CEPI introduced a Code of Conduct on Legal Logging, which included six principles to follow in wood purchasing to ensure only legal timber is procured. But to go beyond legality and to support sustainable forest management and demonstrate the responsible sourcing of raw materials from them, European Paper Industry has put in place instruments to secure wood is not only sourced from legal origin, but from sustainably managed sources. European Paper industry is strongly involved in third party verified certification. In 2012, 64,6% of wood chips and sawmilling by-products delivered to European mills were forest management certified. 74,7% of pulp delivered to paper and board mills in Europe were forest management certified.
CEPI recommendations for the review of the EU Timber Regulation
The EUTR is applicable since March 2013. In the ongoing review of the EUTR, the European Commission should make use of the experience gained to turn it more effective in combating illegal logging. The EU Timber Regulation should continue addressing timber legality and not be expanded to other forest related issues. However, CEPI has identified the following main issues to be tackled in the review:
1. Extend the scope
The annex of the EUTR contains a list of Timber and Timber products under the scope of the regulation, but does not contain products under chapter 49 of the Combined Nomenclature. This is inconsistent and needs to be addressed. In 2014 the volume of trade in printed products imports into the EU amounted to € 3 billion. CEPI believes that the non-inclusion of printed products can lead to circumvention: There is a risk that illegally logged wood, instead of being traded to the EU in the form of wood, pulp or paper, is traded to countries with less stringent rules on legality before being traded to the EU in the form of printed products. Due to this risk of circumvention, the problem the EUTR is trying to address may remain in the countries of origin, while manufacturing jobs are delocalised from the EU to countries with less stringent rules on timber legality.
- CEPI urges the Commission to amend the annex of the EUTR and include products under the chapter 49 of the Combined Nomenclature.
2. Clarify and strengthen the role of certification in the due diligence system
Article 6b of the EUTR stipulates that operators may only assess the first of five criteria in the risk assessment part of their due diligence system: assurance of compliance with applicable legislation. CEPI believes that the forest certification schemes offer the appropriate tools to address also the remaining risk assessment criteria of article 6b. These are prevalence of illegal harvesting of specific tree species, prevalence of illegal harvesting or practices in the country of harvest and/or sub-national region where the timber was harvested, sanctions imposed by the UN Security Council or the Council of the European Union on timber imports or exports and the complexity of the supply chain of timber and timber products.
- CEPI urges the European Commission to clarify and strengthen the role of forest certification schemes by expanding their applicability to all risk assessment criteria and assess third party certified material as negligible risk.
3. Coordinate consistent enforcement
The level of enforcement is greatly varying between Member States. While essential elements of the regulation such as the level of fines are in the Member States competence, stronger coordination between Member States is needed to avoid the risk of entry points for illegal timber and timber products. Also, Member States interprete provisions of the regulation in their enforcement. This leads to increased administrative burden for companies operating in several EU countries.
- The European Commission should coordinate more consistent enforcement of the EU Timber Regulation
4. Align internationally
Other world regions have introduced measures to curb the trade in illegally logged timber and timber products such as the US and Australia. While the legislations of these world regions address the same issue, the provisions of legislation are greatly varying. This weakens the international efforts to curb trade in illegal logging.
- To strengthen the effectiveness of these instruments in the fight against illegal logging internationally, the EU should seek alignment with these trade partners.
The EU ETS reform, published on 15 July, presents several positive elements that contribute to improving the predictability of the regulatory framework. However, these improvements are not yet sufficient in protecting the competitiveness of energy intensive industries, ensuring adequate regulatory stability and predictability, and in stimulating investments in low-carbon technologies.
From 2005 to 2014, our industry has reduced carbon emissions by 26%, resulting in 21% carbon-intensity reduction. We have been early-movers in low-carbon investments and have plans to grow our business in Europe, building synergies with circular economy and the bioeconomy.
To bring environmental protection in line with industry competitiveness, we ask to:
1. Remove artificial cap on free credits to industry.
Artificially capping access to free credits depresses future investments: it means acceptingdeindustrialisation as a legitimate way to reduce emissions in Europe, even if this wouldincrease Europe’s carbon footprint in the world.
The artificial cap will also lead, sooner or later, to the application of the cross-sectoralcorrection factor (CSCF). This is the most unfair among all instruments, as it cuts allocationirrespective of industry potentials, neutralises carbon leakage provisions, limits predictability,and punishes investments made by early movers.
2. Keep the proposed approach to benchmarks review, but improve key design aspects.
The benchmark review needs to predictably promote and reward investments in low-carbontechnologies, while finding the right balance between accuracy and administrative burden.Reducing benchmarks at achievable paces, with rules clearly stated upfront, will lowerregulatory risks and reward the installations who will invest in low-carbon technologies.
Looking at the administrative burden, the pulp and paper industry, with more than 700installations in the ETS – 60% of which below 25kt – emitted just 31.6 MtCO2 in 2014.Roughly 1.4% of total ETS emissions. Yet, it is the 2nd biggest sector for number ofbenchmarks (11), covering only about 50% of industry production – the rest being under theso-called fall-back approach. It is self-evident that opting for a full review of benchmark valuesinstead is disproportionately costly while only delivering marginal accuracy improvements.
This is why we look favourably at the approach proposed by the Commission. However, manyparameters need to be reviewed and/or clarified, starting with:
•Linearity of the reduction factor;
•Disruptive impact in moving from one reduction pattern to the other;
•Avoid/reduce administrative burden in data collection and verification;
•Fairly assess progresses for installations in fall-back approaches.
3. Grant to all energy-intensive industries equal protection against present and futurerisks of carbon leakage.
Industry is either exposed to global competition or not: there is no middle ground. In thiscontext, the Commission proposal seems reasonable. Moreover, it is worth noticing that therest of the world does not impose comparable costs on energy intensive industries, withcarbon leakage provisions appearing also in other non-EU countries.
4. Adopt binding EU rules for compensation of indirect carbon costs.
Indirect carbon costs affect industrial international competitiveness as much as direct carboncosts do. The principle of equal treatment in shielding industry from both carbon costs musteffectively and consistently apply in all Member States.
5. Stop penalising investments in industrial Combined Heat and Power (CHP).
In the pulp and paper industry CHP is considered as Best Available Technique. Installations are therefore expected to use this technology. Today however the EU ETS does not send the right investment signal to invest in industrial CHP: the EU ETS grants no free credits for electricity produced and no consistent and adequate compensation for indirect carbon costs is given across Europe either. Given the relevant co-benefits CHP delivers in moving Europe towards a low-carbon economy, corrective measures to provide the right investment signal are urgently needed.
6. Earmark innovation and modernisation funding to energy intensive industries.
The earmarked 450 million allowances is the largest industry innovation fund ever. To deliverits full potential it should be linked to the goal of 2050 sectoral roadmaps, and aimed at thedeployment of new technologies for each Annex I sectors. The modernisation fund should alsoprimarily support low-carbon technologies in industry.
For more information, please contact Nicola Rega, Climate Change and Energy Director, at firstname.lastname@example.org, mobile: +32 485 403 412