Richard Coulson, Chair of the Wood Recyclers’ Association (WRA), looks at the unforeseen challenges the UK’s waste wood market could face over the coming months.
Just when we thought we could see the wood for the trees (pardon the pun!) after the Covid-19 pandemic, it would seem that the UK’s waste wood market, like many other industries currently, could be facing some unforeseen challenges over the coming months.
Last year we reported that exports of UK waste wood to mainland Europe had been decreasing for the past two to three years and we were expecting that trend to continue for the UK going forward.
We need [government] to appreciate that our sector delivers considerable benefits already and these must not be overlooked or put at risk.
However, that no longer seems to be the case. On a positive note, we now have enough demand from within the UK to ensure all waste wood is either reused, recycled or recovered, ensuring no waste wood needs to go to landfill. This is a perfect example of the circular economy in action.
But as we draw to the end of this winter we are seeing increased demand for our waste wood from mainland Europe, due to a lack of their own domestic supply coupled with severe energy price increases throughout the world.
This has led to an increase in enquiry levels for exports to mainland Europe. We now have to look at what risks this will present to our domestic market next winter. Will it leave UK customers short as we see exports increase? More importantly, given the grave situation of the Russian / Ukraine war clarifying the importance of having a reliable domestic power supply, is now the time to be considering exporting?
Waste wood biomass
We also have concerns for the future of the waste wood biomass industry, a vital requirement given that biomass represents two thirds of the UK’s waste wood use, providing the capacity to generate 470MW of low-carbon reliable base load power, equivalent to around 3.3TWh, which can power 840,000 UK households a year.
We know that many of the UK’s biomass plants were funded under the Renewables Obligation (RO) or Renewable Heat Incentive (RHI) subsidy regimes, which are grandfathered for a period of twenty years. However, from as early as the mid 2020s through to 2038 these subsidies will end.
Once they do, there’s a major risk that without the revenue support provided by these schemes, these facilities will be forced to go offline. This not only jeopardises reliable domestic base load power availability, but raises questions and insecurity in respect of the valuable recovery of three million tonnes of usable waste wood. Given the immense strain our markets see today, why face these risks? .
There are no negative environmental impacts of using waste wood for energy recovery. These plants now offer the UK sufficient capacity to ensure no UK waste wood needs to go to landfill and that the resource is used to generate both heat and/or power that is compliant with the latest regulatory standards. As a sector and association we realise that we must engage with government further to make them aware of all of these risks and opportunities.
Fuel costs
Another area of concern for wood recyclers and re-processors at the moment is increasing cost pressure throughout the supply chain, especially the rising costs of fuel and electricity. There is no doubt that businesses as well as consumers are already having a difficult time with the general rise in cost of electricity. In some cases this has already trebled.
Those costs have to be met by someone and not all, if any business, can withstand that sort of increase long-term without passing it onto their customers. However, we know as consumers ourselves, there is only so much of an increase we can withstand being passed on before we have to cut our own cloth accordingly. The impact on businesses worldwide will be felt.
In addition, at the time of writing this the removal of red diesel for many industries, including waste wood, is imminent. The WRA has joined with other trade bodies to have one last attempt to get the implementation date postponed. This would allow business a bit of breathing space on the diesel fuel aspect at least.
As a sector we plan to communicate and discuss these key messages with the Government. We need them to appreciate that our sector delivers considerable benefits already and these must not be overlooked or put at risk. We also need to be mindful of recent environmental, biomass and Net Zero policy statements and consultations and contribute to their development in order to progress our sector’s own development.
Indeed, with further support we could make our industry and its footprint better in respect of BECCS, Bioenergy with Carbon Capture and Storage and help our country further towards its net zero goals. Surely a win – win?
If you’ve got something to say about this opinion piece or would like to submit your own for consideration, email the editor at darrel.moore@ciwm.co.uk
