Electricity costs for European countries is hurting production with both Lessebo Paper and Metsa Tissue curtailing production because of the high costs of electricity which was brought about due to sanctions against Russia. Source: Timberbiz
The electricity cost for Lessebo Paper has unprecedently increased from Euro 3 million to Euro 19 million per year.
As a result, production at Lessebo Paper will be paused. Going forward a decision for production will be taken daily depending on the electricity price for the upcoming day.
The paper industry is electricity-intensive, and the electricity price increases will most likely, not only affect Lessebo Paper, but several industries in south of Sweden.
“Since autumn 2021, the electricity price has gradually increased, and we cannot see that the increases have slowed down, rather to the contrary. Historically, the winter period usually entails high electricity prices and the fact that we already have record high electricity prices in August is a concern,” Jens Olson, CEO at Lessebo Paper said.
Lessebo Paper is a leading producer of high quality environmentally friendly paper located in Sweden.
Metsä Tissue has had to curtail its production both in its Zilina mill, Slovakia, and Kreuzau mill in Germany for several days because of the high energy price peaks. With the high energy cost inflation, further production curtailments are likely, and they may also impact the availability of tissue products in the markets, as substantial amounts of daily production losses will occur.
“To mitigate the situation, we have explored all possible energy efficiency improvement actions and mitigation actions to replace Russian gas with alternative energy sources are on-going.
“We have also been forced to revise our offering and the crisis will also speed up the move towards fresh fibre focused strategy, which enables lower energy use in the paper making, compared to recycled fibres,” Tobias Lüning, SVP Central Europe, Metsä Tissue said.
Tissue profitability will continue to be reviewed on a daily basis and the high energy costs will most likely continue to cause additional temporary production shutdowns.
