Energies 2023 , 16 , 746
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3. Results and Discussion This section presents future prospects for the European PPI. Expected changes in the business environment are reviewed, and the magnitude of the required annual renewal rate is evaluated. The section presents the possible development pathways and measures forCO 2 emissions reduction. The study discusses how the current political environment guides the sector’s transformation and points out what should be changed in a policy point of view to enable an efficient decarbonization. Finally, the section highlights differences in progress on the decarbonization of the OECD and developing countries. 3.1. Future Prospects of CO 2 Emissions The business environment of the PPI is continuously changing. Prices on CO 2 emis- sions and energy are increasing, demand for products is changing, and competition on biomass may grow. The reaching of net-zero industrial emissions depends on the business environment, and even if the environment would be suitable, significant renovations are
needed to achieve a fossil CO 2 -neutral sector. 3.1.1. Changes in the Business Environment
The demand for different products is changing, which forces mills to modify their product portfolio. The need for packaging materials is increasing, for example, due to grow- ing global markets and the need to substitute plastic packages, whereas digitalization has led to a notably decreasing demand for graphic papers in the OECD countries. In addition to traditional products, the demand for several kinds of novel wood-based solutions such as textiles is increasing. Increasing prices for energy and especially CO 2 will force mills to change their energy use practices. The effect of high ETS prices on the pulp and paper mills is presented in Figure 2. The effect varies notably within the mills. The variation can be caused by several factors, such as energy efficiency, integration rate of the mills, implemented decarbonization actions, or the energy supply strategy. However, clear differences between mill types can be seen.
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0DUNHW PHFKDQLFDO SXOSPLOOV 0DUNHW FKHPLFDOSXOS PLOOV Figure2. Impact of high EU ETS carbon prices (EUR 100/tCO 2 ) on the production costs of different mill types. 6WDQGDORQH SDSHUPLOOV ,QWHJUDWHG FKHPLFDOSXOS DQGSDSHUPLOOV ,QWHJUDWHG PHFKDQLFDOSXOSDQG SDSHUPLOOV Stand-alone paper mills do not have large bio-based side streams that could be com- busted to energy, and therefore, those mills typically utilize fossil fuel for both energy production and paper drying. Thus, stand-alone paper mills have the greatest pressure to cut emissions. Applying a bubble policy [36], which allows even increasing the emissions in some facilities as long as total emissions are reducing, could be the most cost-effective way toward a low-carbon sector. That is because, for example, the mills with access to bio-based waste streams may have better opportunities to replace fossil fuels by intensifying the use
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