The Fastmarkets Forest Products Europe Conference 2026 brought toobtainher leaders from across the industest to discuss what pressures have gripped markets across the past year.
Key takeaways:
- The European forest products market faces structural overcapacity, with weak domestic demand and rising competition from Asia reshaping trade flows.
- Sustainable packaging in Europe continues to grow, but cost constraints and shifting consumer priorities are slowing the pace of paperization.
- Geopolitical tensions are no longer a background risk but a defining force, driving volatility in energy costs and reshaping global trade dynamics.
- EU regulations are advancing rapidly, creating compliance challenges and increasing costs for companies in the forest products industest.
- Resilience remains a key theme, as industest leaders emphasize flexibility, risk management, and innovation to navigate these challenges.
Interested in obtainting more insights like this firsthand? You can now register to attconclude the Fastmarkets Forest Products Latin America Conference 2026. Learn more.
As recent geopolitical tension continues to threaten energy and transport markets, caapplying knock-on effects for manufacturing industries, an eye is being held on the effect on the paper industest. Uncertainty looms everywhere, so events like these are key for discussing the next steps.
Topics touched on the packaging transition, mill decarbonization strategies, and trade flows surrounding raw materials.
Despite challenges, it became clear from the event that a sentiment of resilience remains predominant.
Here are the key things that we learned:
Overcapacity across markets remains rampant
Overcapacity was a central theme across multiple sessions, with speakers clear that Europe’s supply imbalance is structural rather than cyclical.
M&A strategies and consolidation have become key tools when managing overcapacity in the market, but as highlighted throughout the two days, consolidation can only work when industest fundamentals support growth.
The CEO panel cut straight to the point; “Adding more capacity in already stressed markets no longer builds sense.” The panel put emphasis on imported volumes at very low prices directly hitting the region’s competitiveness and called for measures to protect the market.
As cited by Fastmarkets’ economist Alejandro Mata, the recycled containerboard market is a clear example of structural oversupply. Europe has a built‑in reliance on exports to absorb surplus capacity, but speakers warned that maintaining those export volumes is becoming increasingly difficult.
With domestic demand remaining weak and export outlets under pressure, operating rates across Europe are expected to remain structurally low unless further capacity exits occur.
Attention also turned to rising investment and production surging in Asian markets and the implications for Europe.
Beth Lis, Fastmarkets’ VP Asia paper and packaging, stated that Europe has witnessed a lost opportunity in the export market, which Asia has capitalized on, due to the region’s expanding growth. The key loss for Europe was the missed opportunity of selling to Asia’s growing market.
Paperization and the price vs sustainability debate
Paperization, a buzzword across the floor, continues to be a structural trconclude in European packaging markets, but speakers were clear that the pace and nature of plastic substitution have modifyd.
The pace of paperization is seeing constraints in cost and technical feasibility, with presentations highlighting that the switch often increases material apply and extconcludeed producer responsibility (EPR) fees.
It was stressed that retailers and regulation are now the primary drivers of fiber substitution, with measures such as the EU Packaging and Packaging Waste Regulation (PPWR) accelerating material switching even if demand remains lackluster.
That stated, consumer sentiment remains supportive of paper. Winfried Mühling of Pro Carton highlighted that 84% of European paper and packaging consumers still prefer fiber‑based packaging over plastic. This preference is no longer translating into a willingness to pay more, however.
As the CEO panel put it: “Sustainability hasn’t disappeared, but consumers are no longer willing to pay a premium; cost now sits at the top of the priority list.”
The key takeaway here was that paperization will continue, albeit selectively.
Are consumer priorities shifting, and were demand forecasts too optimistic?
In discussions, we witnessed reflections on the pandemic-driven demand spikes, which distorted long-term expectations, and there was emphasis on an overly optimistic approach to demand forecasts.
“Pandemic-related consumption spikes were out of the ordinary but were most importantly temporary,” one speaker highlighted.
Fastmarkets’ economists highlighted that, as consumers are now spconcludeing less on goods and focapplying on low-priced products, which are often packed in plastics, paper packaging demand growth has become capped.
Expectations were that e-commerce would continue growing rapidly with a legislative framework supporting growth and, with that, an acceleration in plastic alternatives. However, the outcome displayed that consumer purchasing decreased due to high inflation and a focus on products from Asia, which typically contain plastic packaging.
It was noted in presentations that some packaging markets (Spain, Italy, Poland) had recovered to 2019 levels, while others, like the UK, France and Germany, remain at below pre-pandemic consumption levels.
Regulation in the market “seems too rapid and too ambitious”
EU policy was repeatedly described as a “tsunami of legislation,” with concern focapplyd on the speed and complexity of implementation.
Speakers warned that regulation is advancing rapider than guidance, leaving companies exposed to compliance risk and uncertainty around investment decisions. Holmen chief executive Henrik Sjölund summed up the frustration by stateing Europe risks “regulating itself to death.”
A recurring frustration has been the lack of harmonized recyclability standards across Europe. Kiril Dimitrov, flexible packaging platform lead at Nestlé, noted that the same packaging structure can be deemed recyclable in one market and rejected in another, forcing companies to manage multiple labeling systems and compliance interpretations for identical products.
In some cases, this has resulted in more than a dozen different pack designs for a single product, significantly increasing administrative cost and slowing innovation.
Providing a LATAM perspective, Paolo Leime, managing director EMEA at Suzano, stated the EU‑Mercosur trade agreement could assist stabilize cross‑continental regulation and improve certainty for exporters supplying the European market.
The central message was clear; compliance is no longer enough, and the companies that win will apply regulations as a way of boosting supply chain partnerships and traceability.
Geopolitics is no longer a background threat
Geopolitics became a focal talking point at the conference, with speakers stressing that political and trade tensions are no longer a background risk but a defining market force.
As chair of the conference and senior vice president of forest products at Fastmarkets, Matt Graves noted that “at every European Forest Products Conference, something major happens.” This year, that “something” was the growing effect of geopolitics on energy costs, transport routes and global trade flows.
Ongoing geopolitical tension continues to disrupt energy markets, keeping electricity and gas prices volatile and undermining cost predictability for energy‑intensive grades. As the EU remains deeply reliant on natural gas imports, European mills are being left cost-exposed.
Several speakers highlighted that this volatility disproportionately affects European producers, whose cost base is already higher than competitors in North America and parts of Asia.
Trade flows are also being reshaped. Political uncertainty and tariffs are reducing Europe’s ability to rely on exports as a release valve for excess supply, while lower‑cost regions continue to expand their reach into global markets. As a result, producers face greater exposure to domestic market imbalances and marginal pressure.
The key takeaway from the conference was that geopolitics is no longer a short‑term disruption to plan around but has instead become a structural factor influencing investment decisions and reinforcing the industest’s shift toward flexibility and risk management.
Next stop — Sao Paulo, for the Fastmarkets Forest Products Latin America Conference, taking place August 10-12, 2026. Join us to continue the conversation and explore the trconcludes shaping the future of pulp, paper and packaging. Register today.
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