A burning issue: should we really be subsidising the biomass industry?

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Is the extensive burning of biomass for electricity generation a good use of (arguably) renewable resources and an important contribution to the low-carbon economy? Or is it in fact a threat to our environment and the timber industry, and an inefficient use of a very valuable resource?

In this guest post, Stirling-based building product manufacturer Norbord argues the latter.

What is the most responsible use of timber?

The background
Wood is a valuable resource, which, unlike other sources of renewable energy, is limited due to available land area and the length of the growing cycle. In the UK, current sustainable harvest is fully utilised by Norbord and other manufacturers through a lifecycle of grow –> use –> re-use –> recycle – and then, and only then, –> recover for energy.

This responsible and environmentally efficient lifecycle ensures carbon is stored for many years before being released back into the atmosphere when it is finally burned to produce energy.

As part of its commitment to a low carbon economy, the Government has introduced subsidies to electricity generators under the Renewables Obligation (RO). These subsidies incentivise the burning of wood for electricity-only generation, at efficiency levels of less than 30%.

The issue
The wood panel industry relies entirely on UK wood (virgin and recovered), which is now under huge pressure from the large-scale biomass energy sector. In simple terms, our industry is under threat because the Government subsidies allow the energy generators to pay more than double the price currently paid by the UK wood panel industry for its primary raw material. As a result, this has driven up average wood prices by 60% in the last five years.

And the problem looks set to grow. There has been a huge increase in the number of planning applications for biomass power stations that generate electricity by burning wood. These plants have the capacity to consume many times the entire UK’s timber harvest. Additionally, the Government is introducing subsidies with respect to the Renewable Heat Incentive (RHI) scheme, which will further distort the market.

Biomass protest (image by faul on Flickr)

The impact
The threat to the wood panel industry is clear, however the current legislation has wider-reaching consequences too:

• The loss of the wood panel industry would cost tens of thousands of jobs across the UK, many of them in manufacturing, damaging already fragile economies.
• The environmental impact – the inefficient burning of wood will in fact generate a net increase in UK CO2 emissions, to the order of hundreds of millions of tonnes.
• UK bill-payers, already struggling with rising costs for household energy, are actually paying £810 million a year for these so-called ‘green’ subsidies through hidden charges in their bills.
• Consumers will experience significant price increases on wood panel products and other manufactured items, driven by the rising cost of raw materials.
• Large negative impact on the UK’s balance of trade, as we would need to import wood from overseas to meet demand.
• Distortion of the ‘Hierarchy of Use’ for wood, to which the UK Government is committed.

What’s being done?
The Wood Panel Industries Federation’s Make Wood Work and Stop Burning our Trees campaigns are backed by Norbord and the other UK panel producers, and supported by other forest product industry organisations. They are national campaigns aimed at persuading the Government to encourage the best possible use of this valuable and limited material.

Working with leading organisations within the building trade, we are lobbying the government to review current and proposed legislation. An Early Day Motion has been tabled in Parliament in support of the Make Wood Work campaign. Specifically, we are asking the Government:

1. To respect the obligated “Hierarchy of Use” in the framing of legislation.
2. To review the RO and RHI incentives with respect to their distortion of this Hierarchy.
3. To incentivise the use of wood for energy only after its full lifecycle use, for carbon storage.
4. To better integrate the process across disparate Government Departments.
5. To commit to, and deliver on, an expansion of productive woodlands.
6. To engage fully with the wood processing industry as represented by the Wood Panel Industries Federation (WPIF) and Confor (Confederation of Forest Industries).

How can you help?
The Biomass Issue has consequences for the UK economy, our environment and for the tens of thousands of UK workers whose jobs are at risk as a result of this legislation.

Please support our campaign by signing the petition.

Thank you to Norbord for this guest post. What are your views on biomass and the Government incentives? Whether you are in opposition to the above or in support of it, I would love to hear from you.

In the meantime, here is some more background information:

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2 Responses to “A burning issue: should we really be subsidising the biomass industry?”

  1. millercs Says:

    In the U.S., I write extensively about wood biomass to biopower and biofuels through my BioStock Blog ( http://biostock.blogspot.com ). We are not as motivated by global climate change as we are with finding the most sustainable feedstock for conversion to alternatives to oil – which Pres. Bush characterized as “an addiction” and which continues to threatens our economic, military, as well as environmental security in this millennium. I would submit that Europe’s dependence on oil is as problematic as ours!

    I also worked for Price BIOstock which aggregates and processes over 15 million tons of wood for its customers (almost all are large paper manufactures). Price is interested in finding the highest possible use for woody biomass. That changes with economics and societies’ perception of the value of energy independence, GHG, low carbon power & fuels, etc.

    As managers of vast timberlands, the U.S. need sindustries that can provide markets for fuel wood and thinnings – lest our overly dense forests go up in a cloud of smoke from “megafires”. What better markets than biomass power and biorefineries that would simultaneously reduce our dependence on fossil fuels?

    You might try protecting your supplies of biomass for your forest product industries by recommending a switch from pellets to natural gas – but that is not renewable and it is a fossil fuel that is getting to be as globally centralized and strategic a commodity as oil. For “have not” nations these are hard choices that need to be analyzed locally. What, for instance, is the vulnerability you have from a growing dependence on imported natural gas?

    Subsidies should be determined by deciding whether the true “price” of a energy commodity accurately reflects its value to society among alternatives. FITs, RECs, and carbon taxes are other tools for addressing these imbalances. Take your pick! And good luck!

    By the way, we observe Memorial Day today. We sincerely wish our cousins in Europe freedom from adversity as we share cherished memories of all our fallen heroes. Our common cause is to reduce the global pressures that lead to military conflict.

    • Benedikte Ranum Says:

      Thank you so much for that thoughtful and informative comment.

      It’s very interesting to hear what the situation is in the US – clearly there are many similarities, and as you point out, our dependence on fossil fuels is wholly unsustainable. Working out sensible, long-term alternatives is a priority and something that occupies a lot of people’s minds here at the moment – in Scotland as well as in the UK as a whole.

      I will pass your comment on to Norbord, who will no doubt find it of great interest. In the meantime, I wish you a good Memorial Day, and thanks again for taking the time to comment.

      Best wishes,

      Benedikte

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