Board mills concerned over competition for wood (15/05/08)
Chipboard manufacturers have claimed they are being undercut for waste woodchip by biomass plants - and have called on the government to do something about it.
Demand for wood waste is increasing with the emergence of biomass in the UK
Up until recently, the factories provided the main market for clean waste woodchip, which is used in the manufacture of chipboard and MDF, whch kept the price for woodchip relatively stable.
However, increasing government support for renewable energy and the use of wood waste as a fuel has driven the development of wood-burning biomass plants - which have increased demand for the material.
Although many of these are still in development, the director general of the Wood Panel Industries Federation, Alistair Kerr, has said that the ones which had been developed were of a sufficient size to already have an impact on waste wood supplies.
Echoing concerns raised earlier this month by Southampton Test MP Dr Alan Whitehead, he claimed that while some competition was healthy, clean waste wood was being diverted away from recycling.
And, he claimed was not a "level playing field" because the plants were being subsidised by the government through Renewable Obligations Certificates (ROCs).
He said: "We are finding ourselves being outbid for raw material which is the life blood of our industry. If we have to continually pay more and more it will become uncompetitive.
"We have got no problem with normal competition but we are not competing on a level playing field - it's a subsidised competitor," he stressed.
At present, companies receive one ROC per MegaWatt hour of energy they produce, which is set to be banded based on technology type from 2009. This would mean that some technology such as co-firing gets less than one ROC per Megawatt hour, and some more.
However, the WPIF now wants ROCs to be banded based on fuel type for biomass - to incentivise plants to burn lower-grade material over clean waste wood.
To help achieve this, the federation has requested a meeting with energy minsiter Malcolm Wicks.
Mr Kerr said: "Environmentally it is a nonsense to burn wood that could go into product manufacture. The government thinks there is no room for growth in the existing industry but intake is increasing by 2/3% annually."
Mr Kerr said that the competition for waste woodchip from biomass plants provided an "opportunity" for wood recyclers as it provided a wider market for their material.
However, he warned that if things went too far, they may be back to one customer.
He said: "This is an opportunity for them as it opens up a second customer base for them. But if energy becomes the only customer that will become the worst situation. It's all about getting a balance."