Will the energy programme support competitiveness?

Will the energy programme support competitiveness?

At a time when forest-industry companies have enhanced their preparedness for future success, sometimes through rather painful measures, the competitiveness of the industry has careened in the opposite direction because of increased energy costs.

Increased prices of energy place the export companies operating in Finland in a difficult position. The companies cannot pass this cost increase on to the prices determined in the global market. To retain a competitive position, the companies should be able to pare down other expenditure correspondingly.

Various factors contribute to the increase in energy costs, with the significant rise of the market price for electricity being probably the most important one. The forest industry finds it particularly annoying that competitiveness is being undermined by political decisions that considerably weaken Finnish producers’ position in relation to their foreign competitors.

Energy expert Maiju Westergren, of the Finnish Forest Industries Federation, calculates that the decisions, effective as of 1 January 2011, will increase the energy taxes that can be imposed upon the Finnish forest industry by over 60 million euros. The sum total of the energy taxes amounts to 130 million euros annually.

“In Finland, the industry’s electricity tax is several times greater than in many other countries. The Swedish forest industry pays, in practice, no energy tax whatsoever, and, in Germany, the tax cap cuts off 90 per cent of the energy taxes. A tax cap is also in place in Finland, but the taxes paid by the industry are capped to a considerably lesser extent,” Westergren remarks.

Read more in the magazine, issue 1/2011