Energy costs a threat to Australian pulp and paper mills

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Rising energy costs and poorly aligned energy policies are threatening the future of Australia’s pulp and paper industry.

Unlike many other major energy using industries, the pulp and paper industry produces significant amounts of its own renewable energy.

However, much of the industry receives little recognition and precious little return for the contribution they make to the production and supply of renewable base load electricity, let alone its supply of renewable industrial heat.

There can be no doubt that Australia has an energy problem. It is a mess, in many ways, including for pulp and paper manufacturers, whose issues include :

Securing baseload electricity supply

· access to affordable gas from conventional and unconventional sources

· Renewable Energy Certificates under the RET for thermal heat generation

· Investment in energy efficiency and lower emissions production

· Adoption of an emissions intensity target that rewards efforts to increase the efficiency of energy production

· Maintenance of quality and consistent electricity supply

Of course, the domestic producers have not been idle.

In the latest edition of its Pulp & Paper market analysis, data compiled by the Australian consulting firm IndustryEdge shows that in the last two years the sector has increased its total production of paper and paperboard by 2.7% (2014-15) and 2.8% (2015-16). Over the same period, the industry’s energy intensity has fallen by 2.8% and 2.7% in each of those years respectively.

The aggregate 5.4% reduction in energy used tonne of production over these two years has been achieved with significant investments and ongoing activity to improve operational efficiencies.

Energy policy in Australia is way beyond a political issue. It’s a serious issue for households and businesses across the nation. The impact of inaction or poor policy settings could, at its worst, bring the pulp and paper sector to its knees. According to the authors, that’s not in the national interest, meaning concerted action is required, urgently.

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