The chair of the all-party group for the wood panel Industry has called on the Government to end its support for electricity-only generation from wood, and labelled the Renewable Heat Incentive (RHI) a “further crushing blow” to competitiveness in the wood sector.
Sterling MP Anne McGuire secured a debate in the House of Commons following the Government’s RHI announcement, which did not consider the impact of the policy on the wood panel market.
She said: “Despite the introduction of the RHI, the minister cannot deny that the current incentive regime still makes burning virgin timber for electricity an attractive proposition. The best way to end market distortion and to achieve the best environmental outcomes is to end support for electricity-only generation from wood, and to exclusively support quality combined heat and power, heat generation and energy from treated wood waste.”
According to McGuire, the distortion comes from UK wood demand outstripping supply, a lack of sufficient energy crops being planted and the large scale of biomass plants, which are in danger of driving up wood prices and diverting waste wood from recycling and re-use and into energy-from-waste facilities.
She added: “The RHI will only add to pressure on domestic wood supply and drive up prices above levels that the wood panel industry can absorb or pass on to customers. Biomass energy companies will buy wood from established wood markets, such as the market for small roundwood, unless they are specifically encouraged not to do so. Why would they seek out twisted branches, stump and brash when they can outbid existing industries for small roundwood, sawdust and even logs?
“The core problem remains the unsustainable and flawed support for large-scale electricity from wood.”
In response, energy minister Greg Barker said: “I am very aware of unintended or perverse consequences. We will work harder to look at the consequences for the wood panel industry. Many powerful arguments were made today, not least how it is better to lock up carbon rather than to burn it, and I am mindful of that.”