Paperboard production grows more than eight percent in the early part of the year, paper production contracts

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The forest industry produced 830,000 tonnes of paperboard in the early part of the year. Output was up 8.4% from January-March 2015. Production of pulp and softwood sawn timber likewise increased in the first quarter, while paper production continued to contract. Finnish decision-makers can influence the operating conditions of the forest-based sector by pursuing an uncompromising EU policy.

Forest industry production figures for January-March were boosted especially by cardboard, but pulp production also developed favourably. Forest industry companies produced 1.9 million tonnes in the first quarter, up 4.1% from the corresponding period of 2015. New investments have affected pulp and paperboard production volumes quite clearly.

Softwood sawn timber production increased 3.8% to 2.7 million cubic metres. Paper production continued to contract in the early part of the year, however, coming to 1.8 million tonnes in January-March. This is down 4.9% from the first quarter of 2015.

Finnish producers continue to suffer from weaker cost competitiveness than companies located in our most significant rival countries. This is slowing the recovery of exports and employment, making it imperative for Finnish decision-makers to support the business environment of the industry by influencing the decisions made by the European Union.

The EU is currently promoting several schemes that could affect the industry’s operating prerequisite substantially. The risk of so-called carbon leakage – the transfer of production to countries with lower costs – still looms large.

“Finland’s representatives need to be alert at the EU table next autumn. The EU is currently dealing with reform of the emissions trading system, forest-related sustainability policies and environmental regulations for large combustion plants. The role of forests in climate policy shall also be on the table. In its present shape, the proposed regulation for large combustion plants could lead to €150-420 million in additional costs for the forest industry,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

“The Commission is presently exploring means for the EU to ensure the sustainable utilisation of forest biomass. The effort should take advantage of existing domestic and EU legislation to the maximum extent possible. Voluntary tools should also be exploited wherever possible. With regards to emissions trading, the key concern is ensuring that the starting points proposed by the Commission are held on to,” Jaatinen continues.

The significance of national, competitiveness-enhancing decisions is emphasised in the European operating environment. This is why the government should have introduced so-called emissions trading compensation in full at its budget negotiations.

“Improving competitiveness requires ambitious decisions. Unfortunately, the Agreement on Competitiveness Pact falls short of its original objectives. The implementation talks necessitated by it are now ongoing, and the Finnish Forest Industries Federation will evaluate their outcome at the end of May,” Jaatinen notes.

“In this conjunction, we will also examine how satisfactory the Agreement on Competitiveness Pact’s coverage is with respect to the delivery chain. The forest-based sector was Finland’s biggest export industry in 2015 and it exports 90% of its output. The effectiveness and uninterrupted operation of the delivery chain are essential for forest industry corporations,” Jaatinen underlines.

For further information, please contact: Director General Timo Jaatinen, Finnish Forest Industries Federation, tel. +3589 132 6600