UK wood panel industry renews campaign for removal of subsidies on biomass as Parliament debates energy bill, says government support for biomass is driving up raw material costs, distorting market

SOUTH MOLTON, U.K. , November 7, 2013 (press release) – An industry voice has called on the Government to take into account the potentially damaging impact of its Energy Bill on wood processing jobs.

The Wood Panel Industries Federation (WPIF), which includes Norbord, fears the biomass subsidy support mechanisms included in the Bill could inflict further damage on the wood panel industry and believes that the Government must now give the issue renewed attention.

The WPIF - which represents all UK manufacturers of wood-based panels - says that permitting large-scale biomass risks wood panelling job losses as well as a substantial rise in UK emissions.

The industry has consistently stated that subsidy regimes for large-scale biomass energy are distorting wood markets and should be removed, while pointing out its belief that this support does not give the industry a level playing field in which to operate.

Current subsidies have led to an unfair advantage for large-scale wood fuelled power generators and potentially a threat to the wood panel industry’s UK operations by driving up costs, according to the WPIF.

Wood panels, a vital component in the construction industry and in furniture manufacture, are produced from virgin and reclaimed wood – the same materials which biomass energy plants are being incentivised to burn by Government subsidies.

Without a level playing field, subsidy-supported biomass-fuelled power generators can afford to outbid the UK wood panel industry for its primary raw material.

However, with the Energy Bill still being debated in the House of Lords, the WPIF says this is an opportunity to take a fresh look at the situation and to place more emphasis on the concerns of the manufacturing industry.

According to research, the spiralling development of large-scale wood fired energy plants in the UK also risks a substantial increase in UK carbon emissions.

The WPIF believes that a hierarchy of use should now be promoted and that wood should not be burned when it can be used in more eco-friendly processes.

With domestic wood supply already being challenged, the wood panel industry voice is also supporting an increase in commercial planting.

The industry has a combined annual turnover of over £550m, directly employing approximately 2200 people with approximately 7900 FTE jobs dependent upon the industry. These are mostly based in rural areas where job provision is often limited.

Alastair Kerr, director general of the Wood Panel Industries Federation said: “Our industry desperately needs a lifeline right now. Government support for biomass is directly distorting the UK wood market and is damaging the future viability of the wood panel industry in the UK, which is wholly reliant on domestically-sourced wood.

“Furthermore, consumers of UK-sourced products, who are already paying for the subsidy through their electricity bills, cannot escape the impact of this distortion.

“The WPIF believes that subsidies should be focused instead on the expansion of non-wood fuels which 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.

“Essentially, we are simply calling for a more responsible use of wood – one of our most precious natural resources. We are not requesting preferential treatment, just a level playing field that allows us to compete on an equal footing.”

* 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.