The Commission announced this week that it had “opened an in-depth investigation under EC Treaty state aid rules into a proposed UK scheme granting aid to paper mills to increase printing and writing (P&W;) paper production capacity and to stimulate the demand for collection of waste paper from offices.”
This is the second time that a paper sector grant by WRAP – the Waste and Resources Action Programme – has faced an investigation by the Commission. Last time WRAP chose to give money to Shotton to convert newsprint production to using 100% recovered paper.
This time the plan is being looked at by the Commission before any invitations to tender for the grant have been issued by WRAP.
The tone of the Commission's response is seen by some experts as 'standard' – although it does appear to strongly question whether or not WRAP's intervention in the market is really needed.
The Commission says that while it recognises the environmental benefit of recycling waste paper, it has “doubts whether the use of recycled fibre for the production of printing and writing paper goes beyond the state of the art in the industry. Given the expected increase in the collection of waste P&W; paper and the growing interest of the paper industry in this type of waste paper the Commission doubts the necessity of the aid.”
Rules
The Commission’s decision to investigate will shortly be published in the EU’s Official Journal and interested parties will be able to comment on the UK’s proposed measures. The Commission will then take a final decision on the compatibility of the scheme with EU state aid rules.
Competition Commissioner Neelie Kroes commented: “We must ensure that aid proposed on environmental grounds genuinely pursues environmental objectives and is limited to what is necessary to reach the objectives without undue distortion of competition in the marketplace.”
Liz Goodwin, WRAP's director of materials, said that WRAP had gone to the commission with its ideas at an early stage. “A major aim of our printings and writings advocacy team is to increase the demand for recycled office paper grades.”
Domestic
And, Ms Goodwin emphasised that WRAP believed there was a need to increase the UK's domestic reprocessing capacity for office grades. “There is an argument in the medium term that there won't be enough demand for office collection material, even across Europe.”
Ms Goodwin acknowledged that one of the difficulties in collecting from small offices in the UK was the costs involved. She explained that an investment in a mill producing office grade recycled paper “would stimulate collection.”
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