Higher energy costs and an increased focus on decarbonization are affecting the competitiveness of European paper and cardboard packaging manufacturers, according to a new report from Rabobank, as cited by European Supermarket Magazine.

Energy Consumption

The report, titled "The Competitiveness of European Paper Packaging," suggests that although Europe was once well-known for cost-effective paper packaging production, it has "experienced a shift in its competitive position."

Energy-related issues have made Europe one of the regions with the highest production costs for paper, affecting both exports and the profitability of European paper factories.

"In the near future, energy will remain a crucial differentiating factor for European manufacturers, both globally and on the continent," said Natasha Valeeva, Senior Analyst, Packaging and Logistics at Rabobank.

"Europe used to be a level playing field when it came to energy, but it is now subject to a burden. Reforms to the EU Emissions Trading System will also bring new challenges to the industry."

New Opportunities

According to Valeeva, the current situation will require paper packaging manufacturers to "accelerate" the adoption of technologies aimed at reducing energy consumption, improving heat supply efficiency, decarbonizing steam supply, and adopting renewable energy sources.

"Recognizing that energy challenges can also present strategic opportunities, European paper packaging producers must focus on decarbonization to maintain their competitive advantage in the evolving energy landscape," Valeeva said.

"While most paper packaging companies will continue their operations in Europe, despite current challenges, some may review their operations and seek to relocate production elsewhere," she added.