Introduction of carbon tax may lead to tightening competition in EU pulp and paper market
The introduction of a carbon tax on imports to the EU, which is scheduled for 2022, could have a negative effect on pulp and paper producers from emerging nations, operating in it and may even result in their exit from this market, according to recent statements, made by representatives of some paper producers and EU analysts in the field of paper business.
In contrast to importers, most of the EU pulp and paper producers have already shifted on cleaner technologies in their production processes in recent years. That has also affected their carbon emissions (which since 2016-2017 have declined by 15-20%) and inevitable led to the increase of their production costs.
It is expected, the introduction of a carbon tax on imports will result in the tightening of competition in the EU pulp and paper market and lead to the exodus of some of foreign companies from the local market, as their products will be no longer competitive due to the growth of production costs.
According to analysts, that may primarily affect producers from China, Russia, as the volume of carbon emissions during their production processes remains still high.
By: Eugen Gerden