New book claims to expose the crippling cost of climate change policy

Let Them Eat Carbon

Let Them Eat Carbon

A new book – ‘Let them eat carbon’ from TaxPayers’ Alliance Director Matthew Sinclair – looks at the  record and cost of climate change policies, and the special interests that profit. 

It is said to provide new insights into the cost of major regulations driving up energy prices, particularly the Renewables Obligation and the EU Emissions Trading System.

In 2009-10 the Renewables Obligation cost over £1.1 billion, equivalent to an additional £40 a family (up from under £900 million in 2007-08). The figure includes the subsidies paid to the biomass industry to burn wood, which are funded by rises in energy prices and are said to directly threaten 2.4 million jobs across the UK’s and European wood associated industries.

Matthew Sinclair says: “Regulations that are supposed to cut greenhouse gas emissions are adding to energy bills, and making it much harder for a lot of people to make ends meet. At the same time manufacturers are finding it harder to compete and jobs are being lost as industrial capacity relocates to other countries not placing the same burden on industry. The only ones who benefit are a handful of big businesses that can make billions in profits at the expense of ordinary consumers. With the dismal failure of these policies, and the cost mounting, it is vital that we scrap them.”

You can read more about the book and Matthew’s views in the TPA’s press release.

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

Biomass

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

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.

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.

Wood prices will continue to rise

Kronospan warns of price rises

Kronospan warns of prices rises

One of the UK’s largest wood panel plants is warning of sustained price rises due to an unprecedented increase in raw material costs. And government subsidies to the biomass industry for burning wood are making matters worse, it says.

Kronospan’s CEO, Ludwig Scheiblreiter, is cautioning customers not to try to absorb any increase in prices. Instead distributors and retailers must pass the rises down the supply line now or face serious financial implications, because the increases are here to stay and more are expected.

All the raw materials – timber, chemicals and energy – used for wood panel production are under accelerating supply pressures, which is relentlessly pushing up prices across Europe.

Ludwig says: “This year will be critical and decisive, even without the effects of the new age of austerity. This is not a wave any of us will be able to sit out, nor will any of us be able to continue the absorption of cost increases within the supply chain.”

Subsidies – worth up to four times the current price levels of timber residues and post consumer wood waste – are being paid to the biomass industry to burn wood to create electricity. The well meaning but ill conceived legislation on the generation of renewable energy is squeezing the availability of the core raw material and increasing prices.

In addition, the main chemical used in resin for the wood panel industry process is urea. More than 90% of urea is needed as fertiliser to meet expanding worldwide demand for food. This is obviously putting pressure on supply and with crude oil up 40% the chemical industry’s price demands are rising.

Subsidies paid to the biomass industry are being funded via the cost of electricity, again pushing up price. Add to this tightening rules on carbon trading, continuing price rises in oil and gas, and the UK’s structural supply problems, and there is perpetual strain on energy demand.

Ludwig says: “The industry urgently needs to set up the right structures to secure future supply as price alone will not guarantee availability. These changes will be enormous. The UK is still slightly behind many Western European countries but, with its comparatively low share of forestry, it is catching up fast.

“In Germany and surrounding countries these raw material pressures have already led to major reductions in production capacities and price levels for panel products are up to 25% higher than the current UK levels.”

Ludwig insists there are still things the industry can do to keep price increases to a minimum. The key action is for everyone to campaign to abolish subsidies to the biomass industry for burning still useable wood. Anyone can do this by supporting the Wood Panel Industry Federation’s (WPIF) Make Wood Work campaign. For more information go to www.makewoodwork.co.uk.

The subsidies directly threaten not only Europe’s wood panel manufacturing industry but also all its associated customers, from furniture makers to the construction industry. Wood should only be burnt at the very end of its useful life cycle.

Ludwig says: “The best will survive and we’re committed to further improving our technology, products and service for the long term. Our goal is to provide all the tools the supply chain needs to compete in the global market, to replace imports, build markets abroad and keep price increases to a minimum with tight cost management and efficiency gains.”