Woody biomass subsidies paid to energy producers are causing 'extraordinary increase' in cost of wood, say U.K. furniture industry officials; petition presented to Prime Minister calling for halt to subsidies, review of impact on industry sectors

STEVENAGE, U.K. , May 22, 2012 (press release) – Leading furniture industry representatives have today gone to 10 Downing Street to present a petition to the Prime Minister over their concerns about the impact of biomass subsidies on wood prices. This represents the latest phase in a campaign being co-ordinated by FIRA and the British Furniture Confederation (BFC).

Many of the industry's top company executives have put their names to the petition that highlights the extraordinary increase in the cost of wood, its prime raw material, as a consequence of woody biomass subsidies paid to energy producers.

Stephen McPartland MP, chair of the All Party Parliamentary Furniture Industry Group, who took BFC representatives to 10 Downing Street said: "The industry supports well over 100,000 jobs and is a sector full of industrious small enterprises employing highly skilled staff. Current woody biomass subsidies are a significant cause of rising wood prices which are damaging British furniture businesses."

DECC's subsidies encourage energy companies to burn wood which is creating an unsustainable bubble in the timber market. Prices are rocketing and demand is growing so fast that the forestry sector has no chance to ever get near to meeting it. Energy producers are simply out-paying manufacturers and this will lead to the collapse of the mainstream British furniture manufacturing base, unless the subsidies are significantly reduced or removed, especially for the burning of newly grown trees.

The furniture industry, which generates £7.3 billion of GDP (almost 3 per cent of Britain's manufacturing output), is calling for the Government to call a halt to these subsidies now and seeks a comprehensive review as to their impact on industry sectors such as furniture.

"We are not look for any advantage ourselves - only a level playing field for all those in the market wanting to create value, whether products or energy, from wood," said British Furniture Confederation chairman Paul von der Heyde. "At the moment there is an imbalance with the subsidy granted to the power generation industry."

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.