WRAP hopes the scheme will help to achieve its target to secure investment in reprocessing capacity in the P&W sector for the use of an additional 150,000 tonnes per annum of recycled fibre by 2006 (ENDS Report 364, p 36 ).
Because of the investigation, this deadline will almost certainly be missed.
Given the expected increase in the collection of waste P&W paper and the paper industry's growing interest in this type of paper, the Commission doubts the aid is necessary.
It also claims the methodology used by the UK to calculate the costs eligible for state aid does not restrict the aid to what is strictly necessary to meet the environmental objectives.
In particular, "the costs of a technically comparable investment that does not provide the same degree of environmental protection have not been deducted from the eligible costs."
A similar investigation in 2003 almost scuppered a grant from WRAP to support the expansion of newsprint recycling at Shotton, North Wales.