The UK Wood Panel Industries Federation (WPIF) has urged the Government not to ‘support the squandering of valuable wood resources’ through the issue of its Renewables Obligation (RO) subsidy for biomass energy.

According to the report compiled by the WPIF and consultancies Carbon River and Europe Economics, there has been a 30% increase in costs over the last four years and the fear is that prices will continue to rise in the scramble for biomass, threatening the wood panel industry, which is wholly reliant on domestic wood.

To cap the amount of domestic wood used for biomass, the WPIF proposes more stringent regulation of large-scale fired wood. Talking to Wood Focus, the Director of the WPIF, Alistair Kerr, says, ‘The subsidy to the energy sector gives the biomass industry an ability to pay prices that potentially would allow them to buy even the more valuable part of the tree (i.e. sawlog) which is why the UK sawmilling industry is concerned. Rising raw material costs for unsubsidised industries can only be passed on to a degree before competitiveness starts to be eroded.’

He adds, ‘UK wood processing industries maximise the economic value of the resource. All we ask for is to be allowed to compete for the raw material on a level playing field.’

The burning of virgin wood in particular is a chief concern. The WPIF calls for Government to re-focus the RO subsidy to expand non-wood fuels and fast-rotation crops and to use only processderived waste timber to generate electricity.

‘A better use [of virgin and reclaimed wood] would be to extract the economic (product manufacture) and environmental benefit (carbon storage potential) in the first instance and only burn wood for energy at the end of its useful life after recycling and re-use opportunities have been exhausted,’ says Kerr.

Support for the campaign comes from the Scottish Parliament. MP Malcolm Chisholm, one of three MP’s who has backed the report, says, ‘The important role that wood products play in storing carbon expresses concern at the inefficiency of burning wood to generate electricity alone. The Scottish wood industry could not support even one large-scale biomass plant on its own’.

However, power generation firm Drax recently released a report calling for biomass to play a greater role in the UK’s efforts to cut CO2 emissions. This would require the Government and the Office of Gas and Electric Markets to ‘guarantee the level of support given to dedicated biomass plants’. Furthermore, the company claims Government support does not go far enough.

Melanie Wedgbury, Head of External Affairs at Drax, UK, says, ‘The RO is necessary to encourage investment as renewable technologies are more expensive than traditional fossil fuel technologies. Yet, the cost of various renewables technologies differs and hence the levels of support. Without schemes such as the RO, there would be no incentive to invest in renewables, as investors would not be able to recover their investment from selling power alone’.

She adds, ‘One of the ways we burn biomass is to mix it with the coal [co-firing]. Biomass is around three times the price of coal on a heat output basis. The support mechanism compensates for this price differential. Currently, the support level for co-firing biomass makes some biomass materials uneconomic to burn, therefore, the economics favour burning coal. Our argument is that this does not help reduce CO2 emissions and increase renewable electricity output, quite the reverse.’

However, Kerr remains unconvinced about the idea of restricted support for biomass, arguing, ‘If there is so little support for [wood-derived] biomass why are there currently around 11 operational woodfired energy plants totalling 320MW electricity, six more consented totalling 685MW, and around another 19 planned totalling 2,500MW. If all built, they would have a wood demand of around 30Mt. The opposite is the case, there are insufficient subsidies driving energy crops.’

While both industries compete for resources, the general consensus appears to be that the subsidy framework will need to be more tightly tuned to keep UK enterprise competitive among its quest for carbon reduction.

The full report can be viewed at http://www.makewoodwork.co.uk

See also www.draxpower.com and www.scottish.parliament.uk