Brussels, 08/12/2005 (Agence Europe) - The European Commission has opened an investigation into a planned 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. The Waste and Resources Action Programme (WRAP), is a UK Government body responsible for encouraging recycling activities. WRAP will tender grants among paper mills to co-finance capacity increases for the manufacturing of P&W paper using waste P&W paper. The waste paper will mostly be collected from offices. The budget of the scheme is between £6 and £20 million (€8.7 and €29.2 million). 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.”
The Commission explains in a press release that it has doubts that the use of P&W waste paper for the production of P&W paper goes beyond the “state of the art” as waste paper is commonly used as the cheapest raw material in paper 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. The methodology used by the UK to calculate the costs eligible for state aid does not seem to restrict the aid to what is strictly necessary to meet the environmental objectives. Interested parties are invited to submit their comments.