The Deeside-based newsprint recycler, owned by UPM-Kymmene, was originally offered 23 million from the Waste and Resources Action Programme for an expansion project that would cost a total of over 120 million. However, under rules governing the provision of State Aid for private companies the European Commission decided on Wednesday that the grant could not be higher than 17 million (see letsrecycle.com story).
The total was lowered by the Commission because it decided the full amount would be beneficial to the UK's environmental record as a whole. The State Aid regulations relating to environmental improvement projects state that a project must improve the individual company's environmental performance. It was judged that only part of the grant would be needed to specifically improve the Shotton Paper mill's environmental record.
Commenting on the Commission's judgement, UPM Kymmene (UK) managing director Martin Gale said: “We are relieved that the Commission has completed its investigation and announced a positive conclusion, although naturally we are disappointed not to have received the full planned aid of 23m. At the end of a lengthy process we agreed to accept 17m on account against the original aid awarded to UPM-Kymmene (UK) through WRAP’s competitive tender process.”
Shortfall
Mr Gale continued: “The current shortfall in grant aid does create the need to consider alternative funding options which may be internal through cost management solutions, but we will also need to seriously explore external avenues.”
The project will see an expected 321,000 tonnes of additional paper recycled in the UK, raising the national newsprint recycling rate by 30%.
Mr Gale said: “This is an important project not only for UPM-Kymmene, but for the United Kingdom in its challenge to develop a recycling culture. The project is a good example of industry setting new levels of environmental and social responsibility.”
Shotton has said its new Recycled Fibre Pulp facility is scheduled to be commissioned, as planned, in November 2003 with full production by April 2004.
Rhodri Morgan, First Minister of the Welsh Assembly Government, welcomed the announcement by the European Commission's Competition Directorate General to approve investment at UPM Kymmene's plant at Shotton on Deeside.
Capacity
The new recycling pulping facility investment takes the total sum invested at Shotton Paper to over 400 million since its plant opened in North Wales in 1985. The recycling capacity will be increased to over 700,000 tonnes of recovered paper each year, although there will be no overall increase in the output of newsprint.
Rhodri Morgan, First Minister of the Welsh Assembly Government, welcomed the European Commission's approval of Shotton's State Aid grant.
Mr Morgan said: “I am very pleased that the Commission has made this positive announcement. The investment at Shotton will offer considerable environmental benefits to Wales and adjoining parts of England. It will allow some 1.6 million tonnes of paper to be recycled by local authorities in Wales and the North West of England over the next five years. This investment supports the Wales Waste Strategy, and by providing a stable market for paper will encourage more recycling. I commend both UPM-Kymmene and WRAP for taking this project forward.”
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