If nothing is done to amend this policy, wood prices could potentially rise to a point where they meet that paid by generators for imported material
Alastair Kerr, director general, WPIF
The trade association for wood panel manufacturers yesterday (June 28) launched a campaign, entitled ‘MAKE WOOD WORK', which is calling on government to modify the Renewables Obligation Certificate (ROC) banding to remove its “distortion” in the market, with the wood panel industry claiming it should only subsidise capital expenditure in the UK biomass sector.
At present, under the RO banding, dedicated biomass projects are eligible to receive 1.5 ROCs per MWh of energy they produce, while co-firing of biomass gets 0.5 ROCs and dedicated biomass with combined heat and power (CHP) qualifies for two ROCs. As of June 24, the average value of one ROC was £49.
According to the campaigners – which include MPs and a wide range of other organisations and individuals – only wood that has reached the end of its useful life, and after recycling opportunities have been exhausted, should be used by the energy sector in installations that maximise the heat potential of the resource. At present, the wood panel manufacturing sector is the largest end-market for recovered wood – but more is increasingly used for biomass fuel.
The WPIF has long been calling for the RO to be changed as the Federation claims it leads to material which could be recycled being burnt for energy (see letsrecycle.com story).
Campaign
The ‘MAKE WOOD WORK' campaign is also calling on the government to:
• Ban wood – an increasingly precious resource – from landfill and maximise the lifespan of all wood in the UK;
• Focus the subsidy on the expansion of non-wood fuels and fast-rotation crops, as these have a greater potential to reduce CO2 emissions in the short term. In the long term, the amount of UK forest cover should be increased;
• Recognise the wood panel industry's sizeable contribution to UK renewable heat generation under the Renewable Heat Incentive – and treat it as a special case by including its eligibility in the RHI and offer our industry an essential lifeline.
Research
The campaign has been launched alongside the publication of two independent reports, commissioned by the WPIF, which claims that sectors such as the sawmilling industry could also be in danger if large-scale wood fired power generators demand for UK-sourced wood is encouraged to develop unchecked.
One of the reports, ‘The Wood Panel Industry in the UK, A report for the Wood Panel Industries Federation', conducted by economic consultants, Europe Economics, highlights that if this were to happen, the sawmilling sector could experience structural change in which generators will buy the whole tree and invest in forest properties and product preparation.
According to Europe Economics, the employment effects will therefore not be confined to wood panel manufacturing but could extend to the 12,000 or so people estimated by the Forestry Commission to work in sawmilling and related activities.
The second piece of research, from emissions management company, CarbonRiver, identified that:
• To subsidise the purchase of wood for incineration – as the current ROC scheme does – is to encourage the most carbon-intensive use of that resource;
• If the ROC subsidy continues to distort the market such that panel manufacture is displaced by the biomass industry – as trends suggest it might – there would be an increase in net CO2 emissions equivalent to 1.5 tonnes of CO2 per tonne of wood processed, a total increase of 6 million tonnes or 1% on the UK's total net CO2 emissions each year.
Commenting on the findings, Alastair Kerr, director general of the WPIF, said: “Our research proves categorically that the government's renewable energy policies – specifically support for biomass – are directly damaging the competitiveness of the wood panel industry in the UK, which is wholly reliant on domestically-sourced wood.
“If nothing is done to amend this policy, wood prices could potentially rise to a point where they meet that paid by generators for imported material. This will put thousands of jobs in the UK wood panel and associated industries at risk and has the potential to escalate costs for the construction and furniture industries. Consumers of UK-sourced products, who are already paying for the subsidy through their electricity bills, cannot escape the impact of this distortion.”
Emphasis
Mr Kerr added that the government was putting too great an emphasis on large-scale wood-fired electricity and as a result is threatening to destroy an industry that “adds economic value and brings environmental benefit through carbon storage”.
He said: “We are not anti-biomass and, indeed, as an industry we have pioneered the burning of our process-derived wood waste to generate heat and power, which is then fed back into our own manufacturing process.
“Backed by MPs and a wide range of other organisations and individuals, our campaign today calls for a more responsible use of wood – one of our most precious natural resources. But, importantly, we are not asking for special treatment – just a level playing field.”
Subscribe for free