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Back to basics on supply and demand

A recent campaign promoting the use of wood used the slogan “when I grow up I want to be table” – this, of course, is what wood is primarily grown for, with the saw log being utilised for construction as well as numerous household items. However, wood has a natural life and will eventually be discarded – this then opens up the debate as to what to do with this “post consumer wood”. 

As wood has many “second life” uses it seems to be a terrible waste to allow this resource to be taken to landfill.  A simple solution may be to do what the Germans and other European countries have done in the past 10 years, and put a complete ban on wood (along with other biodegradable materials) going to landfill. This policy alone, would not work in the UK in the absence of other joined up policies. Mainland Europe can move materials across borders, which allows a natural flex between supply and demand with wood surpluses and deficiencies being bought and sold to neighbouring countries.

In the UK we have an additional shipping cost to export to neighbouring countries which in some cases makes it uneconomical to sell into (or buy from) these markets. So what are the options to prevent wood going to landfill? A high-level response to this would be ensure the good quality grades of wood are re-used in board and panel production with the lower grades being combusted as efficiently as possible to produce either or both heat and power – simple enough you would have thought.

A couple of years ago when the renewable subsidies for biomass power and heat generation were known, this spawned a number of projects across the UK -  the future forecast for recycled wood demand looked to far outstrip supply causing the board and panel federation to lobby the government against supporting this technology warning that they would go out of business as they claimed that they could not afford to pay the same rates for processed recycled wood.

Today we have a major issue with surpluses of recycled wood across the UK but predominately in the South where the larger volumes of waste wood are generated and having fewer local markets. The cost to take waste wood to landfill is around £80 per tonne therefore you would have thought that this was a sufficient financial incentive to force depositors of wood to find alternative markets – however if there are no alternative uses for this material then as a last resort landfill has be retained as an option until…. we have engineered a market that prevents this.

The only solution to prevent waste wood from going to landfill is to design a framework that ensures the UK has a symbiotic balance between wood produced and wood utilised with the base level demand slightly higher than the base level of wood discarded.  We must have a short demand position in other words, which would ensure that any waste wood generated will find always find a home with any shortfalls being met either by imports or a market adjusting merit order with some plants having to face a slight shortfall during periods of high demand and low  wood availability.  

Neil Bailey, CES Biomass Consultant

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