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For Cepi, the EC’s Net Zero Industry Act sends some positive signals to manufacturers

“Preserving Europe's critical edge in bioeconomy is rightly recognised as a priority” – Jori Ringman

On March 16th, a legislative package proposed by the European Commission has been presented as a way to avoid an exodus of EU industries. While it falls short on measures aiming to reduce the industry’s dependence on fossils, it sends some positive signs to manufacturers turning towards a circular bioeconomy model.

A main element of the package, the Net Zero Industry Act, looks at boosting cutting-edge energy efficiency and renewable energy technology supply capacity in Europe and focuses on this specific manufacturing sector. It could go further in similarly supporting take-up of these technologies within the larger group of energy-intensive industries. It is lacking crucial provisions regarding permitting for installing renewable energy technology, and would not address the need for industry to rapidly deploy solar or wind energy on-site. In the paper industry, alone, an important potential has been identified.

“Preserving Europe’s critical edge in bioeconomy is rightly recognised as a priority,” said Jori Ringman, Director General, Confederation of European Paper Industries (Cepi). “Our sector should be able to securely source competitively-priced fossil-free and to invest in a variety of related technologies.”

Still, the Net Zero Industry Act is a welcome development, as access to affordable renewable energy will reduce Europe’s dependence on fossil fuels and in turn help the industry in meeting the ambitions of the EU Green Deal. But many projections show that such a transition will require more energy than is available today, while current energy prices have been putting Europe at a competitive disadvantage globally.

The danger is that the Green Deal will only exacerbate the situation and make higher energy costs structural for Europe. The electricity market reform, also part of the legislative wave unveiled earlier this week, should strive to ensure that industry has reliable and affordable access to fossil-free energy.

“Manufacturing is experiencing a very difficult moment. Regulatory pressures should not be a reason for the EU to lose the ‘made in Europe’ bio-based industries it aims to foster,” Ringman said.

Other proposals, including the Critical Raw Materials Act, show encouraging signs for industrial actors of the forest-based bioeconomy. A sector that already represents 20% of EU manufacturing companies and where Europe leads on technology and innovation at a global level. Today’s proposals formally introduce in legislation the concept of ‘material substitution’ in the EU Commission’s thinking on materials and strategic autonomy. It could go further in actively supporting the transition to a circular bioeconomy, which has been identified by the Commission as key to Europe’s long-term competitiveness.

The EU Commission now sees renewable bio-based substitution materials as strategic, while finite, extractive resources deplete. The introduction of a category of strategic raw materials is welcome, as it makes the Act more dynamic and forward-looking compared to a proposal only focusing on critical raw materials. These bio-based substitutes are already available at industrial scale and can be further scaled up. Biotechnology as a whole is now expected to be part of European Sovereignty fund, which exact details will be unveiled in the summer.

Around 90% of wood used by Europe’s pulp and paper industry originates from EU forests, warranting a level of security of supply and making it one of its most important renewable material resources. A systematic impact assessment of EU policies on future wood supply for the European industry should be part of Europe’s new approach to industrial competitiveness, if it truly wants to foster an industry and an economy that is strategically autonomous from fossil resources.

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Cepi
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