Energy costs: German paper mill generates cheap bio-power

DW (English)

The paper industry consumes massive amounts of energy — and energy is expensive. Some companies are already going under. But one business in northern Germany is pushing back against the trend, generating its own energy in an on-site bio-power plant.

Transcript

00:00Compared to usual, the noise at this factory is conspicuous by its absence.

00:06High energy costs coupled with falling market prices spelled the end for paper manufacturer Meldorf outside Hamburg.

00:14The workforce of 130 will now be made redundant, among them Rolf Schneider.

00:20He tidies up the workshop area one last time.

00:24Everything here is up for sale to new owners.

00:29It's a really big blow, having to give up your job after 29 years

00:34and sign the termination notice given to you by the insolvency administrator.

00:39Rolf Schneider is part of the 25-strong team winding up operations,

00:44such as dismantling the papermaking machines.

00:47And as the team spend their final few days together, many cannot say what the future holds for them.

00:54It's not that common a job up here, so of course we're worried about our livelihoods, especially people with families.

01:03It's strange, going home and knowing that it's curtains for the company.

01:11Possibly the death knell for the company were the increased prices for electricity and gas due to the war in Ukraine.

01:18Double, in fact, says managing director Ulrike Lemm.

01:22The factory had hoped to survive with a new and sustainable product, paper made from grass.

01:33It worked pretty well initially, but then stagnated as demand dropped.

01:39And ultimately this industry might not yet be ready for alternative fibers.

01:44Or maybe we just needed a little more time.

01:48The insolvency administrator tried in vain to find an investor, but nobody believed in a future for the factory,

01:54not least because the machines were outdated and required above-average energy input.

02:01At the end of the day it became evident that the business was unable to cover its costs.

02:07And further, that we were unable to find an investor willing to take on those risks and ultimately guide the firm into a safe harbor.

02:20A half-hour drive further north is another paper-making factory.

02:24Here at Steinbeis the machines certainly are still running, with high energy prices not an issue.

02:30The company has its own power plant producing electricity and heat, while doing without expensive gas.

02:39The crucial difference is the fuel we use.

02:42Residual materials from waste paper processing, which are subject to different price mechanisms.

02:49So energy price fluctuations don't hit us that badly.

02:55The company also owns wind, solar and biogas production facilities.

02:59And it recently also acquired a second power plant that burns scrap wood and paper waste.

03:05Having two such plants enables Steinbeis to even sell energy and has made it internationally competitive.

03:14We stay competitive when gas prices are low.

03:17This plant has been in operation since 2010.

03:20Even when gas costs 2 to 3 cents per kilowatt hour, we still had cost advantages over our competitors.

03:27The company has had a sustainable approach for over 40 years now.

03:32That commitment has paid off, on the energy front but also with regard to its products, all made from 100% recycled paper.

03:41And demand is growing.

03:44More and more companies are switching from virgin fiber to recycled paper.

03:50And for us that means a boost in growth.

03:53Generally speaking, recycled paper no longer has that cheap and grubby image.

03:57The trend seems to be towards seeing recycled as a superior product.

04:04Back at the paper factory that's closing down, 40 of the workforce of 130 have now found new jobs, some at Steinbeis.

04:12The machinery will all be sold off, probably to new owners in Asia.

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