The economic situation of the German paper and pulp industry did not improve in the first half of 2026 compared to the same period last year. Despite hopes for an economic recovery, the turnaround has failed to materialize. Production and turnover in the German paper and pulp industry continue to decline, according to the current half-year balance sheet from the German Paper Industry Association (Die Papierindustrie).
A key factor inhibiting the industry's recovery is the poor business environment in Germany. High energy prices, strict environmental regulations and comparatively high labour costs make it difficult for companies to compete internationally. Association President Hans-Christoph Gallenkamp emphasises the urgency of economic policy reforms. „Economic policy reforms must now pick up speed. There must not be another year of stagnation.“
As a basic materials industry, the sector remains closely tied to macroeconomic demand trends and international value chains. Production and turnover declined further: the production volume fell to 9.4 million tonnes (-1.4 per cent) and turnover to 6.9 billion euros (-7.1 per cent).
Packaging papers remained the largest category by volume at 6.4 million tonnes (+/-0 percent), accounting for more than 67 percent of total production. Despite lower volumes (722,000 tonnes, -0.8 percent), technical and speciality papers held their ground as an important pillar for sales and revenue. Graphic papers achieved the second-largest production share at 18 percent, but again fell significantly by 6.9 percent to 1.7 million tonnes. Tissue papers were also 2.0 percent below the previous year at 658,000 tonnes.
Calls for reform
The association is calling for permanently more competitive energy costs, faster planning and approval procedures, and a comprehensive reduction in bureaucratic burdens and reporting obligations. The social security systems must also be stabilised and more strongly geared towards employment and performance incentives. These are the prerequisites for future investments in state-of-the-art production facilities in order to secure value creation and employment at the Germany location in the long term. „Industrial competitiveness must once again become the guiding principle of political action. Companies only invest if the locational conditions are right,“ said Gallenkamp.
Reliable Framework conditions are needed
Instead of facilitating investments in climate-neutral production, additional costs and bureaucratic requirements are increasingly burdening companies. This applies in particular to the planned ETS reform. The European Commission's proposal to oblige companies to make potentially uneconomic investments up to the amount of free allocation has met with sharp criticism from industry. „Companies are committed to the transformation. However, central prerequisites are often lacking – from climate-neutral energy sources to sufficient grid capacities and market-ready technologies. Anyone who creates ever new regulations under these conditions jeopardises investments and accelerates the deindustrialisation of the business location,“ emphasises Gallenkamp.
Source: The paper industry
