Recycling firm in £23m grant inquiry

A fibre pulp facility would be built at the Deeside factory

An inquiry has been launched into a £23m government grant for Shotton Paper in Flintshire.

The paper mill had been promised the cash to set up a project to turn waste into paper and is part of a government drive to increase recycling in the UK.

It is routine because the commissioner investigates about one in eight

Ray Georgeson Wrap

However, an investigation is under way by the European Commission which could take up to 18 months to complete and concerns have been raised that the scheme could be delayed.

The £128m project would see the newsprint plant recycle 100% of all newspapers and magazines delivered to the site.

Under the scheme a fibre pulp facility would be built at the Deeside factory which would see an extra four million households being involved in recycling schemes.

The aid package was put together by the recycling agency Waste and Resources Action Programme (Wrap).

£18m of the grant aid comes from the landfill tax credit scheme while the remainder comes from WRAP, a company funded by DEFRA and the devolved governments around the UK.

Ray Georgeson from Wrap said the inquiry is standard procedure.

Paper and magazines will be recycled

"Where there is government aid you have to tell the competition commissioner.

"It is routine because the commissioner investigates about one in eight."

It has emerged the commission has also received a complaint from a European competitor.

The identification of the complainant will not be made public knowledge.

Environmental

Under the scheme about 321,000 tonnes of recovered paper and magazines would be recycled every year.

To comply with EU directives, ministers want 25% of waste to be recycled by 2005, rising to at least 33% by 2015.

Wrap Chief Executive Jennie Price said they were anxious the project goes ahead: "Wrap and UPM-Kymmene who own Shotton Paper remain fully committed to the project.

"We will continue to work together to ensure that the momentum of this important environmental initiative is maintained."

The paper mill has already started foundation and ground preparation work to build the recycling facility.

Is not yet known whether the investigation will prevent them from continuing.