Gas costs put paper mills in crisis: “Worse than the pandemic”

More and more Italian paper mills are coming to a halt because gas costs exceed revenues.
“If last December the Italian paper mills paid for natural gas, with which they produce electricity for the operation of the plants, five times more, these days the cost is on average tenfold, with tips of fifteen times more“, explains Lorenzo Poli, president of Assocarta. “We have resisted, even producing at a loss, but these days more and more paper factories are coming to a halt and reducing their activity. The pandemic has not stopped us, an energy shock is succeeding, following the current crisis situation between Ukraine and Russia»Adds Poli.

In Italy there are about 150 plants that produced over 9.6 million tons in 2021 (+ 12.5% ​​on 2020) generating a turnover of 8.18 billion, up 28.6% on 2020. Increase that reflects the attempt to recover at least part of the huge increases in fibrous raw materials and gas, energy and transport. “The Italian paper mills are measuring themselves with a weight of the gas bill alone on the turnover increased by 400% only in 2021/2020, but since the beginning of 2022 the figure has worsened a lot”, says Poli.

To date, production stops and reductions also depend on the type of paper produced and the reference market. «As regards what, it seems to us, has been decided in Europe, we appreciate the actions regarding the need for joint storage of gas and the diversification of sources that will have structural impacts in the medium term, contained in the draft Joint European Action document. However, compensatory measures must be taken immediately for the increases in energy costs in favor of energy-intensive companies, also envisaged by the Joint European Action. For example, immediate measures capable of “anticipating” the benefits of shared storage and diversification of supplies to businesses, in addition to suspension of the CO2 market“.

With the paper mills the entire supply chain for the production of packaging, sanitary papers, medical papers, graphic papers for publishing and information, as well as the circular economy and paper recycling is being blocked. A few examples. The Villa Lagarina paper mill in Trentino has suspended production. The owner, Pro-Gest, also made the same decision for the other plants: Camposampiero in the Padua area, Mesola in the province of Ferrara, Tolentino in the Macerata area, Mantua and Capannori in the province of Lucca. No layoffs, the holding company makes it known that it is “committed to finding a solution as quickly as possible”.

At the basis of the measure, the rise in energy, raw materials and transport costs. «Factors that prevent the cost of production from being kept within the limits allowed by maintaining the overall financial balance – the company said -. The paper, sold at around 680 euros per tonne, today requires only 750 euros of energy costs, net of the important investments made in recent years that allow the company to have a state-of-the-art machine park and safe factories “.

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About David Martin

David Martin is the lead editor for Spark Chronicles. David has been working as a freelance journalist.

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