ICT and e-Business in the Pulp, Paper and Paper ... - empirica

Pulp, paper and paper products
recycled. Around 50% of the fibre mass used in paper production within the EU consisted
of recycled fibres. Recycling of waste paper has increased from 25% in 1991 to 54% in
2004.
However, as a report by the European Environment Agency shows, scientific studies
differ in their assessment of the ecological value of recycled paper. 28 Studies using the
Life Cycle Assessment (LCA) technique tend to conclude that recycling of paper has
lower environmental impacts than the alternative options of landfill and incineration.
Studies using Cost-Benefit Analysis (CBA) technique have mixed results whether the
socio-economic benefits gained from recycling are higher than those of incineration,
landfill or other options.
Compliance with international regulation
In an increasingly global economy, businesses have access to international markets from
which they source their goods and services, and to export their finished products. This
applies to the paper and cardboard industry, where large companies already operate
worldwide and now expect increased competition from emerging markets (see section
2.2.3). Notable examples are the European REACH regulation for chemicals (which is
also highly relevant for P&P manufacturers) and the Emissions Trading Scheme.
However, many challenges for businesses come along with the access to this world
market. A critical factor that adds to the complexity of doing business internationally is
compliance with an expanding number of regulations and mandates from a governance,
industry and privacy perspective, both on the national and the international level. For pulp
and paper producers, compliance with environmental regulations is particularly critical.
Increased cost for energy
Finally, an important challenge for the P&P industry is the rise in energy costs. Although
this affects all manufacturing industries, energy demand in P&P production is particularly
high. In Europe, pulp and paper making is estimated to be responsible for almost 2% of
the total primary energy consumption (Worrell et al. 1994). In the Nordic countries, this
share is even higher due to the much larger importance of the P&P industry there.
A US study from 1996 on "Energy Efficiency and the Pulp and Paper Industry" (Nilsson et
al.) argues that the paper and allied products industry was the second most energyintensive
industry group in the manufacturing sector, measured in terms of energy used
per dollar value of shipments. As a result, rising energy prices are having a significant
negative impact on pulp and paper mill profitability, particularly in North America, but also
in Europe. In the meantime, energy prices have considerably increased, and are much
higher in the EU than in North-America. The industry itself regards energy as a key issue
for competitiveness, possibly even as "the deciding factor in European paper industry
competitiveness": "Dramatic increases in energy costs in Europe have placed the
European paper industry at a competitive disadvantage in relation to most of its global
28
European Environment Agency (2006): Paper and cardboard — recovery or disposal? Review
of life cycle assessment and cost-benefit analysis on the recovery and disposal of paper and
cardboard. EEA Technical report No 5/2006.
27