The UK market is expecting rises at the moment, especially in those areas with the higher gate fees, as the weakening euro and lack of demand from Scandinavia is causing stockpiling.
Gate fees for mixed grade wood are around £45 in London and the south and £20-25 from Birmingham to the M62 corridor, but down to £5 to zero in Scotland.
Processing and standard transport costs are typically around £25 per tonne. Longevity of contract, quality of wood and risks to both buyer and seller all affect the actual price.
During the past six years, the UK recycled waste wood market has undergone a revolution. Before this there was a relative steady state between supply, demand and excess. The main consumer was the fibreboard industry, while cleaner wood was separated for equestrian and animal bedding.
But there was a perception that many millions tonnes of waste construction and demolition wood was being sent to landfill or illegally combusted every year.
Studies that attempted to answer the question of how much waste wood was produced each year quoted around 10.5 million tonnes. It was estimated that there was an active market for around two million tonnes.
The natural conclusion was that there had to be some form of market stimulus to encourage the diversion away from landfill of eight million tonnes a year.
The generation of power and heat from biomass was seen as a convenient and environmentally efficient solution for the excess use of waste wood. The combustion of waste wood in a Waste Incineration Directive-compliant biomass boiler provides tight controls over emissions and has a much reduced effect on the environment than raw fires or landfill deposits.
New support tariffs were introduced to provide sufficient inducement to allow substantial investment in the biomass sector.
As a result, biomass projects emerged all over the UK, causing excitement and a certain degree of trepidation about how all these new projects could be supplied and from whom.
In 2009, further studies into the availability of waste wood arisings from the UK were commissioned, but this time they attempted to avoid any double accounting by carrying out a bottom-up and top-down analysis.
The results of the studies shocked biomass developers because it was agreed that there was, in fact, only 4.3 million tonnes a year of waste wood produced in the UK - and this was declining further because of the recession and the general drive to reduce waste from timber-related industries. Biomass investors became nervous about the potential for the future market becoming short of waste wood.
The marginal tonne sets the market price and if that marginal tonne could, in the future, comprise imported wood, then the market price would rise.
This is all very different to building a biomass plant that absorbs the material that is naturally produced from a particular catchment area in the UK.
What of future prices?
No one actually knows, but there are sufficient biomass projects under construction with a combined feedstock appetite exceeding two million tonnes a year.
The revolution has not yet ended and the next two years will provide the answers to such questions.
Report by Neil Bailey for the wood recyclers’ association