Energy price increases in Italy: Federazione Carta e Grafica launches two proposals

Soaring gas prices have had a particularly dramatic impact on the profit margins of companies across the entire supply chain and are threatening to wipe out €22 billion of GDP.

During an event organised by the Italian trade union UGL (General Union of Labour) entitled “Energy independence and sustainable development” held in Rome on 18 January, Massimo Medugno, Director of Assocarta and Federazione Carta e Grafica, made two urgent requests to combat the high cost of energy across a supply chain that accounts for 1.4% of Italy’s GDP (a positive trade balance of €3.5 billion).

“Gas has seen a 600% price increase and is the most significant input for paper mills, accounting for 30% of total costs,” said Medugno. “Yesterday gas prices reached €90 per megawatt-hour compared to €20 just a year ago. Energy-intensive rotogravure printing companies and large converting plants are also being badly affected.”

According to Medugno, the first urgent measure for dealing with the emergency is to find a way to use strategic national gas reserves, while the second is to take Europe-wide action to increase market liquidity, because cheap gas will allow companies to reinvest in energy improvements and work towards the goal of decarbonisation.

Italy is the third largest paper producer in Europe after Germany and Sweden. The sector itself is worth around €7 billion, but the supply chain as a whole (from paper mills to packaging manufacturers, printers and manufacturers of printing and converting machinery) generates a turnover of €22 billion, with exports accounting for around 45% of its total output.

“Rising energy costs are squeezing the operating margins of companies that produce printed media, packaging and printing and converting machinery, putting their businesses at serious risk,” concluded Medugno.