Recycling companies keen to cash in on biomass energy boom slash gate fees

burning recycled wood threatens UK jobs

A new report from the Waste and Resources Action Programme (WRAP), says that recycling companies are cutting their gate prices to attract waste wood from the construction sector to sell it on to the woody biomass industry.

Subsidies for generating electricity using biomass are distorting the domestic wood market.  Energy companies, supported by the Renewables Obligation (RO), are using their enhanced purchasing power to bid for the same recycled wood used by the wood panel industry.

The report also found there has been a significant increase in demand for waste wood to be used as fuel, with UK biomass facilities’ demand for recovered wood more than doubling between 2007 and 2010 to reach 0.55 million tonnes – nearly a quarter of total recovered wood demand!

WRAP has predicted gate fees will continue to fall in line with growth in the biomass market. A recent report from John Clegg Consulting suggests that demand for recovered wood from biomass plants could rise to more than four million tonnes by 2015, which is more than the UK’s entire supply of waste wood.

It is more evidence that if this situation does not change the future of the wood panel industry and wood-based manufacturing in Britain is threatened because they cannot compete in the same market as the energy companies, who are being subsidised to buy wood.

Read the full story at businessGreen…

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 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.

The 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.