Wood recyclers, some of which did not charge a gate fee until recently, have said that board mills are requiring them to treat wood to an increasingly higher standard.
The cost of updating machinery to comply with the rising quality of wood required by the mills, and other markets is significant, said recyclers. And there are also rising administrative costs relating to legislation, as well as the increasing cost of diesel to contend with.
One midlands-based wood recycler said that he has had to make a substantial increase in his gate fee because of a number of these issues. Manager of A&A; Recycling in Warwickshire, Kevin Goldman, said the company's gate fee had risen from 0 to 15 in recent months. “We are always under pressure from the panel board companies we supply, and the price of diesel is still increasing. I would say our general running costs have probably risen by about 10%.”
North
In the North of the country the picture looks similar, Wigan-based wood recycler Armstrongs agreed that external pressures were driving up the gate fee. The company said its prices have steadily increased recently. Patricia Brammel, sales manger, said the company's gate fee is around 40-80 for a skip of waste wood up to 50 cubic yards where as before it was considerably lower.
Explaining the increase, she said: “We need to drive the quality of the wood up all the time because the panel board companies are applying so much pressure. They need the wood so clean that it is pretty near virgin wood and this means more and more screening. There is a lot of cost involved in getting the wood to the required quality and this is coming through in our gate fee.”
Mills
Board mills say stricter pollution controls mean they have no choice but to ensure the recycled wood coming in to them is of high quality. Alistair Kerr, director-general of the Wood Panel Industry Federation – the main trade association for board makers across the UK – said: “We are subject to IPPC regulations. We sand and trim our products and we use the dust from this as fuel to heat the process. This obviously produces emissions and control on these emissions is tightening all the time, which means the specification to the supplier changes,” he explained.
Because of these increasing standards and the cost involved in implementing changes to support them, wood recyclers are trying to drive up their gate fee, but in a challenging market this is not simple. Many wood recyclers are clustered together in certain parts of the country, mainly in the Midlands and in the North and North West – nearer to the mills. A number of businesses said they were reluctant to raise gate fees because of competitive pressures.
In Scotland, wood recyclers are also at the mercy of local competition. Andrew Corry, director of Tracey Timber in Scotland told Letsrecycle.com: “We currently do not charge a gate fee due to local competition – there are three wood recyclers in a 20 mile radius.”
Other companies are holding off raising their gate fee for as long as possible, but increases look inevitable. A W Jenkinson Woodwaste in Scotland recycle 1,600 tonnes of mixed wood waste weekly, said it will be addressing a possible price increase next spring, although attempts to do this in the past have been unsuccessful.
The business's company secretary, Sylvia Paton explained: “We did try charging a small tipping fee of about 3-5 two years ago and it didn't work as the industry is so competitive. There are too many companies vying for business. Our customers started going elsewhere and if we were to try charging again at the moment, we would loose more than we would gain.”
Landfill Tax
She added that landfill disposal and Landfill Tax are not high enough to encourage customers to recycle rather than tip, so it is holding off with a gate fee increase for the moment.
However, with Landfill Tax increasing from 15 a tonne to 18 in April 2005, and further steep increases due yearly beyond that date, wood recyclers are slowly becoming more comfortable with increasing gate fee because it won't change the fact that they can still offer a competitive option to landfill.
Sales manager at Motward Timber in Befordshire, Martyn Sansom agreed that charging a higher gate fee was becoming more common for wood recyclers. “A few months ago there were a fair few companies disposing of waste wood free of charge, but it is now becoming more the 'norm' to charge because of the growing costs involved in wood recycling.”
PRNs
Another factor contributing to pressure on the wood sector, said Mr Kerr of the Federation, was that wood packaging PRN prices have continued to remain low. This meant wood recyclers did not always feel it was worth separating out packaging waste wood from other waste wood. “Because packaging wood is cleaner we could usually pay more for this, but the wood packaging PRN value is so low that wood recyclers don't always separate it and identify it as packaging.”
He said the value of wood packaging PRN's had risen slightly to about 7-9 a tonne, but this was still not high enough to encourage recyclers to separate. The PBIF, he added, was lobbying with wood recyclers to drive up the PRN price.
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