Biomass subsidies are distorting the market

The most pressing mandate for the government from all British timber industries is that it reviews its current policy of subsidising large biomass electricity plants, urgently.

There is room for the UK to accommodate smaller biomass heat plants, which may use a few hundred tonnes a year and operate at 90 per cent efficiency. They use, and therefore encourage, thinnings from local forests, which in turn helps produce better quality timber in the future.

The large biomass electricity plants, meanwhile, burn the wood at just 30 per cent efficiency and require up to four million tonnes of wood every year, creating a substantial threat to British businesses and the environment.

In the short term, there are currently not enough supplies available to satisfy demand for established timber-based manufacturing industries such as ours as well as the large biomass plants. Subsidising these large energy operations damage the environment by creating a situation where virgin timber is more likely to be burnt inefficiently as biomass fuel rather than used to make carbon-storing products. Meanwhile, they are damaging the economy as they artificially increase the price of timber, which diverts essential supplies from manufacturing, and escalates the costs of business-critical and environmentally friendly products such as timber pallets and packaging, which are excellent examples of products that can be repeatedly recovered, repaired and recycled so as to maximise carbon storage.

Long term, we are concerned that as pressure on timber supplies increases, it will lead to a significant shortage of trees 20 years from now. While in the last few years the availability of wood from commercial forests has increased, these forests are now being replaced by wind farms or heathland. At the current levels of new planting, the total commercial forest area is declining.

The wood-based industries encompass the UK's most sustainable and environmentally friendly companies, and provide a significant level of employment – much more than provided by the biomass industry for example. There are approximately British 30,000 jobs provided by our sector alone. Together, we are working hard to ensure that customers, politicians and the general public understand the great benefits of manufacturing with wood - and huge damage the current regime of subsidising biomass could have.

The original aim of subsidies was to encourage incremental harvesting of biomass from thinnings of marginal land. However, this policy has evolved so it now artificially supports the burning of small logs, rather than using them as we do in the packaging and pallet industry. We are asking for a level playing field and the end of subsidies that are distorting an important market.

Policy must focus on encouraging existing uses for timber – including packaging and pallets – so this raw material is used for several years, and the maximum benefit taken of this carbon storing material, before it is utilised as fuel at the end of its useful life.