News

An “astonishing £3.34 billion” of taxpayers’ money has been paid by the UK Government in Renewable Heat Incentive payments over the past decade, a scheme which subsidises wood-burning while a potential shortage of wood is threatening the UK’s construction sector. 

These are key points raised in a report commissioned by the All-Party Parliamentary Group on the wood panel industry which represents the UK’s six industrial plants producing wood-based materials for the construction industry. 

The report calls for an end to the Renewable Heat Initiative and warns that any future subsidy regime for biomass “must be predicated on completion of a comprehensive and robust assessment of subsidy impact upon wood supply”. 

The cost of RHI last year alone stood at more than £800 million. While the scheme closes to new non-domestic entrants in 2021 and domestic the following year, the UK Government is currently considering future subsidy arrangements following consultation. 

The report points out that it takes 30 years to replace every tree that is chopped up into biomass pellets for burning and warns: “The UK wood supply is finite – and if wood is being burned for subsidy, it cannot be used in the construction industry as was the intention when these trees were planted”. 

The six UK wood processing plants are located close to the forestry plantations from which their raw material comes. The report warns: “If the industry becomes dependent on imported timber (as is already happening), that rationale disappears”. 

Collectively, the six plants directly provide more than 2000 well-paid jobs as well as many more indirectly. These, says the report, “are directly dependent on this issue being addressed by the Government.” 

It also asserts that “open-ended subsidy to burn a scarce natural resource is inconsistent with the Net Zero commitments made by administrations across the UK”. 

The report states: “In the longer term, the answer might lie in planting more trees. However, (this) offers no prospect of early relief — the benefits of planting over the next few years will not be realised until 2040-60. 

“Forestry planting has been in decline in the UK since the 1970s and that is the legacy the industry is now living with. Inevitably, therefore, the biomass sector is currently — and for the next 20 years — relying on planting which took place with other purposes in mind, long before the RHI existed”. 

Selaine Saxby MP, who chairs the All-Party Parliamentary Group and whose North Devon constituency includes a large wood panel manufacturing plant at South Molton, said: “Wood is too important a resource to burn. 

“That is the basic contention of those of us who are calling on the UK Government to reconsider support for the Renewable Heat Incentive before a crisis is created for other users of our finite forestry supply”.

Alastair Kerr, Director General of the Wood Panel Industries Federation and Secretary of the Expert Working Group for the Wood Panel Industry, commented: “We have a successful industry providing high quality employment and with ambitions to invest and expand, particularly in response to increased demand for housing. Increased use of wood in construction is also consistent with the Government’s environmental agenda. “All we are asking is for recognition from Government that wood is a finite resource and there is a conflict between burning it as fuel with taxpayer subsidy and using it for the purposes intended when trees were planted. Security of wood supply is now a major concern in determining our members’ investment plans”.

 

David Rutley Group Shot 2

(Left to right:- Simon Hart – EGGER Forestry Business Development Manager; John Paterson – Director of EGGER Forestry; Guy Opperman MP for Hexham; Tobias Zimmermann, Plant Director, Technical/ Production, EGGER UK; David Rutley MP, Minister for Food and Animal Welfare; Alastair Kerr – Director General, Wood Panel Industries Federation)

David Rutley MP, Minister for Food and Animal Welfare, with the responsibility for forestry policy in England, visited Northumberland’s largest manufacturing site EGGER (UK) Limited, Hexham on Friday 19th July along with the UK Government’s Tree Champion, Sir William Worsley.

This is the second UK Government Minister to visit EGGER’s Hexham plant this year, with the Minister of State for Energy and Clean Growth, Rt Hon Claire Perry MP visiting in March 2019. These visits followed the publication of the APPG for the Wood Panel Industry’s Expert Working Group Report. David Rutley MP’s visit provides a welcomed recognition of the wood panel industry’s role in supporting a strong forestry policy post-Brexit.

EGGER (UK) Limited has invested a substantial £250 million in UK operations in both Auchinleck and Hexham. This is to ensure it remains at the heart of wood-based materials production within Europe, with now over 800 direct employees. EGGER (UK) Limited’s two manufacturing sites deliver the equivalent of 27,500 lorry trailers of wood-based materials each year.

The Minister used the visit to deliver a welcomed speech to stakeholders on increasing forestry cover in Northumberland and across the nation, highlighting the new Environment Bill and forthcoming Tree Strategy as the UK Government’s latest commitment to bolstering tree planting in England.

Forestry Minister David Rutley MP said: “There is no doubt that forestry is a vital industry in Northumberland, and my visit to Egger’s impressive Hexham plant only confirmed this.

“I believe passionately that tree planting must be at the heart of our plans as a government. I look forward to continuing discussions with Egger and other stakeholders in the forestry sector on how we can work together in partnership to achieve our ambitious goals.”

John Paterson, Director, EGGER Forestry commented: “We were delighted to have the Minister visit our plant where we were able to show him the manufacturing process and range of panel-based products produced in Hexham. Northumberland is a fantastic location for afforestation and we look forward to further discussion on the future of large-scale planting opportunities. EGGER makes a considerable contribution to both the local and national economy and as a company we are encouraged by the initial steps taken recently in terms of woodland creation targets which will be a key component for promoting confidence for this domestic industry in the years ahead.”

Alastair Kerr, Director General of the Wood Panel Industries Federation (WPIF) added: “We were pleased to continue the constructive conversation with the Minister on the challenges facing our industry as a whole. The principal issue facing the industry is wood security and constraint upon long-term supply limits its growth potential. Future forestry policy needs to detail key planting targets for the next twenty years, which will prove a crucial time for the wood panel industry. We look forward to further discussion on this and energy policy in order to secure the long-term future of this critical domestic industry.”

Guy Opperman, MP for Hexham said: “It was fantastic to have David Rutley MP,  the DEFRA Minister, visit Egger in Hexham. It was an incredibly productive meeting with representatives from across the Forestry sector. He will have left the event in no doubt that we want more forestry in Northumberland, which will not only result in more forestry sector jobs but will also build us a better environment.” 

 

© Sandy young Photography 07970 268944 Michael Grove MP Secretary of State for Environment, Food and Rural Affairs on a visit to Norbord Europe Ltd, Codie Scotland. E: sandy@scottishphotographer.com W: www.scottishphotographer.com **Editorial use only**no photo sales**no marketing** credit must read scottishphotographer.com**

(Left to right: Alastair Kerr, Director General – WPIF; George Webb, Purchasing Director – Norbord; Steve Roebuck, Environment, Health and Safety Director – Norbord; Stephen Kerr MP for Stirling and Chair of the APPG for the Wood Panel Industry; Rt Hon Michael Gove MP, Secretary of State for the Environment, Food and Rural Affairs; Nick Fedo, General Manager of the Cowie Plant – Norbord).

Secretary of State for the Environment Food and Rural Affairs, the Rt Hon Michael Gove MP, met with one of the UK’s leading wood panel producers, Norbord Europe Ltd., to hear about the challenges they are facing sourcing their main raw material.

Mr Gove was given a guided tour of their operations in Cowie, Stirlingshire, accompanied by local MP Stephen Kerr, who also chairs the All Party Parliamentary Group (APPG) for the wood panel industry.

Norbord and other leading manufacturers who are members of the Wood Panel Industries’ Federation (WPIF) have warned that a major government rethink is required to help the industry satisfy demand for its products, in order to secure thousands of jobs and help the UK face up to its housing crisis.

A recent report carried out on behalf of the APPG for the wood panel industry, involving former Energy Minister, the Rt Hon Brian Wilson, concluded that wood availability will decrease dramatically within the next decade. 

The strain on the UK’s wood basket is being exacerbated by renewable energy subsidies and is creating real uncertainty for wood panel manufacturers while endangering the supply of key materials in the construction and house building sectors.

Stephen Kerr, MP for Stirling and Chair of the APPG for the Wood Panel Industry and Expert Working Group, commented:

“I’m pleased Michael was able to visit a major contributor to the local and national economy.

“I have the privilege of chairing the APPG for the wood panel industry, a sector which 7,500 British jobs are directly supported by.  In my own constituency alone, 250 jobs are created and sustained by the Norbord plant directly, with another 250 employed by local supply chain partners indirectly.

“The wood panel manufacturing industry is a UK success story, with a contribution to the economy in excess of £850m per annum and an ability to meet 65% of the UK demand for wood panel products.

“This industry has the capability to increase production to meet the UK’s demand for wood panel products and to do so with no reliance on imports of wood from elsewhere in the world.  However, this is only possible if it has enough wood to sustain and grow its manufacturing capability.”

Steve Roebuck, Director of Environment, Health and Safety, Norbord, said:

“I’m very pleased that Mr Gove took time to visit our site and listen to Norbord’s concerns.  He certainly took on board our message that the UK’s wood supply is now at a critical point due to demand from heavily subsidised biomass for energy.

“We’re not against the use of wood for energy, but continuing to use subsidy to drive wood towards energy is putting undue pressure our domestic wood supply.  This threatens industries, such as construction and furniture manufacture, which rely on wood panels and sequester carbon for generations.

“The APPG expert working group report concludes that removing the subsidies which cover woody biomass would create a competitive, free market for all wood users competing for a finite resource base.  The equalisation of the market would be the most desirable for wood panel manufacturers and would place all wood users on a level playing field.

“A point that I think all parties agree on is the pent-up demand in the requirement for low cost affordable housing.

“If you’re not going to have wood panels manufactured in the UK, you’re going to import them, and you’re not going to make them out of steel, so this is a critical area that everybody is agreeing on – we have to build those houses and, to build those houses, you need wood-based panels.  That’s 50 per cent of our business.”

Alastair Kerr, Director General of the WPIF and Secretary of the Expert Working Group, added:

“We were delighted that the Secretary of State for the Environment, Rt Hon Michael Gove, was able to take a tour of Norbord’s manufacturing plant as part of his recent visit to Stephen Kerr MP’s Stirling constituency.

“This provided an opportunity to discuss the challenges facing the industry, primarily the future of domestic wood security, and to highlight the policy options outlined within our recent APPG for the Wood Panel Industry Expert Working Group Report produced earlier this year.
“We welcome the Secretary of State’s commitment to improving long-term forestry cover through the targeted planting of a further 11 million trees by 2025, and look forward to further engagement where we can explore the immediate and medium term concerns in more detail.”
 

0P9A0099
From left to right: Cllr Cath Homer (Councillor for Hexham East); Guy Opperman MP (Member of Parliament for Hexham); Cllr Peter Jackson (Leader of Northumberland Council); Jonathon Stephens (Egger Plant Manager – Finance / Administration); Elfi Bretterklieber-Taye (Director, Campact Ltd); John Paterson (Director, Egger Forestry); Claire Perry MP (Minister of State for Energy and Clean Growth)

EGGER (UK) Limited welcomed the UK Government’s Minister for Energy and Clean Growth, Rt Hon Claire Perry MP to their wood-based materials manufacturing site at Hexham in Northumberland on Friday 8th March 2019.

Rt Hon Claire Perry MP’s visit to Northumberland’s largest manufacturing company EGGER comes on the back of concerns raised by the industry through the Wood Panel Industries Federation (WPIF) about the increasing demand for the UK annual wood basket.

Wood-based panel manufacturers are looking to ensure that wood security is at the forefront of future UK business and energy policy. The wood panel manufacturing sector uses 25% of the 11 million tonnes of wood delivered from UK forestry every year. UK manufacturers supply approximately 65% of the total UK annual consumption of wood-based panel products, which can be found in virtually every office, home and workplace across the country and is relied upon by the furniture, house building and construction industries across the UK.

The Minister for Energy and Clean Growth was joined by Hexham’s local representative Guy Opperman MP, Northumberland County Council Leader Cllr Peter Jackson and Councillor for Hexham East, Cllr Cath Homer.

The Rt Hon Claire Perry MP, Minister for Energy and Clean Growth, commented “It was a pleasure to be in Hexham with Guy Opperman MP and visit the Egger plant to meet representatives of the Wood Panel Industry and discuss the importance of forestry to the UK Economy. It’s great to see manufacturing firms continuing to invest domestically and bringing highly skilled, quality jobs to the area.”

Hexham’s Member of Parliament, Guy Opperman said: “I was delighted to welcome Energy Minister Claire Perry to EGGER in Hexham to show off one of our top local employers. It was a fantastic opportunity to demonstrate the importance of forestry to Northumberland, and I really hope she takes the message loud and clear about the need to maintain forestry and keep timber costs down on an ongoing basis.”

WPIF Director General Alastair Kerr commented, “We really appreciate the time and engagement the Minister gave to this visit. Being able to showcase first-hand the nature of the industry, its products and processes is extremely valuable as it creates a more informed context to future discussions that we hope to have with the Minister and her Department”.

Welcoming the Minister for Energy and Clean Growth, John Paterson, Director, EGGER Forestry commented, “It was a pleasure to host this meeting with the Minister, where we were able to discuss the impact of energy policy on our wood supply. Our industry is at the forefront of sustainable UK manufacturing. I was pleased to show the Minister what we are able to manufacture at Hexham to meet the demands of the furniture, interior design and construction sectors. Wood security is vital to underpin our manufacturing capability and future capital investment.”

 

David Rutley

 

From left to right: Stephen Kerr MP (Chair of the APPG and Expert Working Group); Steve Roebuck (Director, Norbord); David Rutley MP (Minister, DEFRA); John Paterson (Director, Egger Forestry); Chris Emery (Timber Procurement Executive, Kronospan); Rt Hon Brian Wilson.

Members of the Expert Working Group and the APPG for the Wood Panel Industry met with David Rutley MP on 13th March 2019 to discuss supply and demand issues facing the industry, resulting from a lack of security surrounding domestic wood. The impact of existing UK energy policy on the wood panel industry and policy options available to combat the unintended consequences of biomass subsidy were highlighted as follows:

  1. Achieve a commitment to align policy across the UK with a focus upon improving long-term wood security through increased planting.

This was led by members companies of the Wood Panel industries Federation – John Paterson (Director, Egger Forestry), Steve Roebuck (Director, Norbord) and Chris Emery (Timber Procurement Executive, Kronospan).

The following policy options were led by Alastair Kerr (Director of the Wood Panel industries Federation) and the Rt Hon Brian Wilson:

  1. Remove the subsidies which cover woody biomass and create a competitive, free market for all wood users competing for a finite resource base
  2. Restrict the total quantity of wood supply that can be consumed as wood fuel by recipients of subsidy payments on an annual basis and/or restrict the type of wood that biomass plants in receipt of subsidies can use as fuel
  3. Adopt a technology neutral approach ensuring that renewables subsidies are equalised and biomass does not receive a higher rate than is justifiable based upon the available evidence.