THE unintended consequences of Government subsidies encouraging biomass electricity generators to burn wood have been widely reported by the media in recent weeks.
Thanks to the soaring cost of wood, panel manufacturers are having to increase the price of products such as chipboard – widely used in construction and housebuilding.
But now our industry is fighting back with a two-pronged approach to secure future wood supplies and argue with Government to rethink policies that are well-meaning, but environmentally flawed and make the already fragile wood supply and demand balance in the UK even worse.
Egger, for instance, has taken significant steps to secure its own supplies and invested £12m to establish two new sites in Glasgow and Washington, Tyne & Wear, for its recycling subsidiary Timberpak Ltd, as well as investing in machinery to be able to process more recycled wood.
Currently, the only wood panel company in the UK to have its own timber recycling company, we are able to process waste wood, that would otherwise go to landfill, and supply it to our chipboard factories in Hexham and Ayrshire.
Wood availability is an issue now, at a time when housing starts remain historically low. Although the economy is fragile, simple supply and demand dynamics is driving up the price we pay for wood and the housebuilding industry is facing a sustained period of continued price rises.
Inevitably, these costs will have to be passed on to the consumer.
We should all be concerned with what happens when the construction market does grow. Importing wood-based panels from places like Asia is not a viable option, as not only do those markets consume domestic production, but the costs and logistics make it unfeasible.
And, with the European chipboard industry also facing similar cost pressures, a number of our customers have expressed their concern about supply going forward.
That is why we are working closely with competitors through our trade association and backing the Make Wood Work campaign.
This is lobbying Government to guarantee the long-term competitiveness of wood panel manufacturing in the UK by ensuring wood is used in the most sustainable way possible rather than giving subsidies to power companies to burn it.
I am also concerned that other well-meaning Government policies have encouraged construction companies to go down the route of installing wood-burning hardware in new public facilities such as schools, swimming pools and colleges.
For further information, and to lend your voice to the campaign, visit www.makewoodwork.co.uk
For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 374 0233 or firstname.lastname@example.org.
Bob Livesey, joint managing director of Hexham-based Egger UK.