Surging gas prices drag down Spanish paper and board production in early 2026

Energy volatility hits the core of Spanish manufacturing

The Spanish paper and cardboard industry is facing a severe competitiveness test in 2026. According to recent data released by ASPAPEL (the Spanish Association of Pulp, Paper and Cardboard Manufacturers), national production of paper and board fell by 3.2% in the first half of 2026 compared to the same period in 2025. The cellulose sector fared even worse, registering a 3.9% drop in output. The primary culprit is a relentless surge in energy costs, specifically natural gas and electricity, which have spiked between 50% and nearly 100% compared to previous fiscal years.

For an industry that exports roughly 50% of its total production, these energy premiums are not just a domestic issue; they are a critical threat to international market share. Spain currently stands as one of Europe's top producers of paper and board, but its manufacturers are increasingly disadvantaged against competitors in neighboring countries like France or Portugal, where industrial energy costs remain structurally lower.

The geopolitical toll on operational margins

The current energy landscape is heavily influenced by international tensions, particularly in the Strait of Hormuz. The Alliance for the Competitiveness of Spanish Industry estimates that these geopolitical frictions could add a staggering 7.4 billion euros in extra energy costs for the broader Spanish manufacturing sector by the end of 2026. For the paper industry, which is highly energy-intensive, this translates directly into squeezed margins and forced production curtailments.

ASPAPEL has been vocal about the structural risks this poses. The association warns that the current cost environment is eroding the export capabilities of Spanish mills. When gas prices exceed 80 euros per MWh, as seen in recent market fluctuations, the cost of drying paper and running massive corrugator plants becomes unsustainable without passing the burden onto the final packaging buyers—a difficult move in a highly competitive European market.

Accelerating the shift to alternative fuels

This crisis is forcing a rapid reassessment of the industry's energy matrix. While natural gas has historically been the transition fuel of choice for cogeneration plants in Spanish mills, the current price volatility is accelerating investments in biomass and biomethane. However, these infrastructure shifts require time and massive capital expenditure, leaving manufacturers exposed in the short term.

The situation underscores a critical vulnerability in the European packaging supply chain. As mills scale back production to avoid operating at a loss during peak energy pricing hours, the availability of recycled containerboard and specialty papers could tighten, potentially impacting downstream converters and brands preparing for the high-demand Q3 and Q4 seasons.

The Spanish paper sector has proven its resilience time and again, but surviving this energy shock will require faster regulatory support and a definitive pivot toward decentralized, renewable thermal energy. Will European policymakers step in to level the energy playing field before permanent industrial capacity is lost overseas? Follow The Paper for daily news, market signals and key updates from the global paper, corrugated and packaging industry. — Sigue toda la actualidad del sector en www.thepaper.ai