End ‘damaging’ biomass subsidy, Osborne told

Biomass fuels significantly shorten the lifespan of wood and encourage the immediate burning of harvested wood rather than using it to manufacture products that last for many years first, the Timber Packaging and
Pallet Confederation( TIMCON) said.

It said the sector – along with the UK’s other forest based industries – are being threatened by the current regime of subsidising biomass fuels.

“The timber packaging and pallets industry sits at the very heart of commercial activity in the UK, and as such provides a very good measure of the country’s economic performance,” said John Dye, TIMCON’s president ahead of Wednesday’s Budget.

“This sector is essential for the smooth running of the British economy, because of its critical role in the transport of goods, and because it sustains approximately 38,000 jobs.

“More than 25% of the output of UK sawmilling is used to manufacture pallets and packaging; a fact, that in turn plays a huge role in making all forest-based industries efficient and economically viable. The business also protects the environment by fuelling huge demand for sustainably managed forests.”

The UK has a binding target under the European Commission’s Renewable Energy Directive to source 15% of its overall energy from renewable sources by 2020, and biomass has been used to reach that target.

In 2013, after the BBC revealed that millions of tonnes of wood were being imported for burning to help meet Britain's renewables targets, DECC announced subsidies for biomass burning in existing stations would end by 2027.

Mr Dye said burning wood as a biomass fuel “compromises the integrity of a finely balanced and highly efficient ‘cascade system’, where every useful part of a sustainably grown and harvested tree is used to maximum benefit.

“As these subsidies distort the market and threaten jobs, they are also completely unjustified from the point of view of the economy.”

He added:

“One of TIMCON’s major objectives is to communicate clearly to Parliament the pivotal part our industry has in both protecting the environment and creating jobs. There are some early signs that Parliament is beginning to grasp these issues, which we welcome. We hope this will be reflected in this year’s Budget statement and beyond.”