Wood panel prices sent soaring by carbon subsidy – Construction Enquirer

Construction Enquirer

Construction Enquirer highlights biomass issue

Today’s Construction Enquirer has reported that the price of wood panels could double because of the Government subsidy programme to the ‘woody biomass’ industry.

The subsidies are pushing up the cost of timber causing a 60% jump in wood panel prices already with further rises of up to 100% in the pipeline.

For the full story click on this: Construction Enquirer – Wood panel prices sent soaring by carbon subsidy.

UK Government can’t see the wood from the trees in climate change plans

‘It’s barking up the wrong tree’, says Wood Panel Industries Federation

Power station

An industry group whose business and commerce relies on UK wood says the Government is barking up the wrong tree with its proposed renewable energy plans, especially those concerned with the use of biomass, as part of the commitment to carbon emission reduction targets.

New legislation will bind the UK into an agreement to meet a carbon emissions cut of 80% of 1990 output by 2050 (60% by 2030).  The agreement relies on increased use of, and investment in, renewable electricity and/or heat from wind, wave and tidal sources as well as biomass.

Alastair Kerr, Director General of the Wood Panel Industries Federation (WPIF) which is spearheading a ‘Make Wood Work’ campaign, warns that the plans could cause the exact opposite of the Government’s vision – a drastic increase in carbon emissions, the diversion of UK wood supply into inefficient electricity generation, larger household bills for consumers, and the potential death in the UK of industries that currently contribute positively to the UK both financially and environmentally.

Chris Huhne, Secretary of State for Energy and Climate Change has already stated that renewables will be absolutely crucial to securing energy supplies and reducing carbon emissions in the decades ahead, and that the Government are reforming the electricity market to help bring forward a surge of investment in renewables1.

Burning woodKerr says, “Until the mass capacity required of wind, wave and tidal energy is reached, and additional biomass capacity from short-rotation and energy crops occurs, one of the most widely available supplies of renewable energy will come from subsidised and notoriously inefficient electricity-only biomass plants burning UK wood.

“This is being actively encouraged through the Renewables Obligation (RO) scheme and the energy suppliers have been quick to respond. Currently, there are an estimated 16 UK biomass fired electricity power stations in operation, under construction or awaiting approval3.  Their demand, coupled with RO subsidies, will distort the UK wood market and it threatens our industries’ future viability.”

The UK has current capacity to produce between 10-11 million tonnes of harvested green wood (wood that has recently been cut from a living tree) per year, and around 4-4.5 million tonnes of waste wood arisings. 

Currently demand for small forest roundwood and recycled wood by existing  users is broadly in balance, but there are supply strains starting to appear and any significant increase in demand by the subsidised electricity sector will seriously distort the market.

A report2 produced by John Clegg Consulting for the Wood Panel Industries Federation and CONFOR estimated that the demand for biomass from wood, wood chips and pellets, and wood waste by 2017 would be 50 million green tonnes.  One proposed plant, RWE npower’s Tilbury B coal-fired power stations is requesting planning permission to adapt to burn wood – this alone would require 6+ million tonnes a year.

Make wood workKerr continues, “The consequence of redirecting, through subsidy, the wood we use today into energy generation would result in a net increase in CO2 emissions totalling six million tonnes per annum – which is bad news for the environment and the taxpayer.  It will drive industries and jobs abroad and once the UK wood and wood waste supply dries up, wood will have to be imported, leading to increased costs passed to consumers, and additional carbon emissions through transportation.”

“The message is simple”, says Kerr.  “There is not enough wood available in the UK to support the number and scale of biomass electricity plants that are being proposed for development.  The RO subsidies promote the burning of wood rather than locking up the carbon through use, re-use, recycling and only then burning it for energy.  This goes against the grain of our own industry practice and the Government’s previously stated support for the waste hierarchy.

“If left unchecked, the subsidy regime could displace existing wood processors and those who rely on UK wood for product manufacture. It is putting at unnecessary risk many thousands of jobs, hitting the pockets of already stretched consumers through increased energy bills and the knock-on effect that increased wood prices will have on the products we produce.

“Most shockingly, the reality behind the climate change deal and the Renewables Obligation policy is that unless rewards to those burning wood for electricity are stopped immediately, in one fell swoop it will actually increase carbon emissions over the next 20 or so years – the exact opposite of the stated goal.” 

  1. Chris Hukne responds to Renewable Energy Review
  2. Department of Energy and Climate Change
  3. Wood fibre availability and demand in Britain 2007-2025

Don’t Waste – Make Wood Work: a guest blog by the Director General of the WPIF

(Today we welcome our guest blogger Alastair Kerr, Director General of the Wood Panel Industries Federation. Alastair has very kindly agreed to keep us updated with news from the WPIF’s Make Wood Work Campaign, so it’s over to you Alastair…)

Alastair Kerr, Director General

Alastair Kerr, Director General of the Wood Panel Industries Federation

The Government’s publication last month of the details of the Renewable Heat Incentive (RHI) held few surprises. As promised, financial support would be introduced – for industry this year and the domestic sector next year – for generating heat from burning wood, among other sources. 

However, the draft regulations did include some alarming omissions, such as restricting eligible heat transfer to water and steam. This meant greatly reducing the potential for renewable heat generation by excluding the most efficient heat transfer mediums: thermal oil and direct air heating. A speedy response from the wood panel industry has led to the inclusion of thermal oil in the RHI, though the Department of Energy and Climate Change (DECC) will not include direct heating, citing flawed concerns over measuring it.

Yet the biggest problem remains a grave lack of understanding of the UK wood market or industries, which did not even merit a mention in the RHI’s Impact Assessment. DECC’s shortcomings on wood knowledge were evident in the Minister’s speech during a recent Westminster Hall debate on the wood panel industry. The Minister cited only modest increases in sawlog prices over five years. If his Department had any understanding of wood use, they would realise that they should be measuring the price of small roundwood, chips and sawdust to get a feel for how biomass energy demand is impacting on the wood panel industry.

Prices for the whole tree, including this material, have risen 55% over the same period. However, with electricity generators receiving over £80 for every MWh of wood-fired electricity generated (approximately a tonne of wood), it is only a matter of time before sawn timber ends up being burnt instead of being turned into useful products.

Make Wood WorkThe Wood Panel Industries Federation (WPIF), through the Make Wood Work campaign, is working closely with other forest industries and environmental organisations to persuade Government to improve its bioenergy policies. We are urging DECC to revise the Renewables Obligation – which supports electricity generation – so that support for wood-fired electricity generation alone (without capturing useful heat) is greatly reduced or eliminated in favour of support for small-scale and efficient wood heating and combined heat and power.

Large-scale electricity generation from wood is not only hugely wasteful but will reduce the UK’s ability to produce carbon-storing, sustainable products from our limited and precious forests.  We want to see existing wood processing continue alongside a biomass sector that makes the best use of peripheral materials.   Visit www.makewoodwork.co.uk for more details.

Burning wood is the most carbon intensive use of this resource

Lock-in CO2

The humble chair locks in CO2 for its lifetime

Wood harnessed for biomass energy at the end of its life is a sound proposition, but current subsidies encourage electricity generators to burn virgin wood, which is disastrous for CO2 emissions.

Wood products have the unique ability to store CO2 from the atmosphere. Everything from a wooden garden chair, dining room table and kitchen worktop is a store for CO2 emissions.

The growing forests are carbon sinks, absorbing and storing huge volumes of CO2 from the environment. Then when the wood is processed it locks carbon away for the lifetime of the product. So, we need to use wood, reuse it and recycle it to ensure its potential benefit to the environment is maximised. Then we can burn it for biomass energy.

The total carbon stored in Europe’s wood products is estimated to be 60m t C, the equivalent of 240 million tonnes of CO2 captured from the atmosphere by the trees.

The more wood products replace other materials, the more CO2 is impounded from the atmosphere. That’s why it makes little environmental sense to burn wood for biomass fuel right at the start of its lifecycle.

For more environmental information take a look at the European Panel Federation (EPF) Environment Fact Sheet.

UK’s renewable heat incentive could increase air pollution

Air pollution

Renewable heat incentive could increase air pollution

Energy Efficiency News has reportered that the green charity, Environmental Protection UK (EPUK), is warning that the Coalition Government’s recently announced renewable heat incentive (RHI) could lead to increasing air pollution, especially in urban areas.

The RHI offers businesses and households incentives to use renewable heat from the likes of biomass systems such as wood-fired boilers. But EPUK warns that biomass heating systems can release high levels of air pollutants when fuel is burnt, presenting a potential health risk in built-up areas.

According to statistics from the Committee on the Medical Effects of Air Pollutants, pollutants released by biomass heating systems, similar to those from vehicles, could contribute to up to 200,000 premature deaths a year.

Read the full story here.

Channel 4 News reports on biomass issue

Channel 4 reports on biomass issue

Check out Channel 4's report on biomass and wood industry

Channel 4’s science correspondent, Simon Clarke, reports on the Government subsidies that are encouraging power companies to burn wood, which is distorting the market for timber and forcing up prices in manufacturing and construction industries.

You can read his report and see the report of Channel 4 news here.

Experts raise doubts on biomass sustainability

Power plant

Total biomass emissions should be measured

The Committee on Energy and Climate Change launched an inquiry in July 2010 to look at the Government’s decision to consider introducing an emissions performance standard (EPS).  

The experts who attended the first evidence session in October 2010 expressed concerns about many wider issues affecting the future production of electricity, including the need to consider emissions resulting from biomass plants and land-use because of increasing demands for biocrops.

The most consistent warning put forward by experts included measuring the total emissions of biomass plants. Professor Jon Gibbins (University of Edinburgh) said that large scale biomass plants contribute their fair share of CO2 emissions. He went on to say that large scale biomass plants are “…a very large source of carbon; it’s about the same amount of carbon as an 800 MW gas plant” (Examination of Witnesses, Question 21).

(For the full story go to the news pages of Make Wood Work.)

If this is the case, why is the biomass industry subsidised to burn wood when the benefit to the environment and its effectiveness in reducing carbon emissions is so questionable?

The best way to use forests as carbon sinks is to harvest the timber and convert it into products (which continue to store the carbon) while replanting more trees than before (Source: IIED and ECCM, Using Wood to Mitigate Climate Change, 2004).