As the busload of British bureaucrats bustles about at the Earth Summit, some wonder if the cost of the jaunt to Johannesburg and the energies of those attending might not be better concentrated on environmental initiatives closer to home – such as the Arbre Energy biomass generation plant near Selby.
Arbre Energy Ltd was put into liquidation on August 7 and creditors – who include many from the UK forestry industry – have been warned by the liquidators not to expect anything back.
Designed to prove the technical and economic viability of generating electricity from biomass crops, the plant was constructed with grants from the EU under its Thermie Programme, and from the UK government under its Non Fossil Fuel Obligation. It was to generate 10MW of electricity from the gasification of wood chips.
Fuel for the plant was sourced from short rotation coppice, comprising mainly densely planted willow shrubs harvested on a three-year cycle, as well as small roundwood and thinnings from forest owners.
Given that wood fuels are clean, renewable and can be produced in a sustainable manner, that short rotation coppice allows diversification of land use, and that the use of materials derived from forest management benefits forest owners who need a market for these products, there is a belief that supporting the Arbre project would be a justifiable investment by the government in pursuit of its environmental aims.
The closure of the plant means unemployment for the 40-strong workforce and a lost market for raw materials suppliers.
In a report to the recent meeting of the Forestry Commission Advisory Panel (FCAP) Supply & Demand Sub-committee, private growers in England and Wales said: “The hope that bioenergy would bring some relief to beleaguered English forestry has been dashed by the arrival of administrators at Arbre Energy. Growers await news with increasing concern as considerable sums have been invested in short rotation coppice specifically to supply this power station.” This additional outlet for forest products was much needed at a time when there are significant tensions throughout the industry. Growers are grappling with falling prices and declining demand for small roundwood and thinnings. The contractor sector is looking increasingly fragile as the workforce ages and younger people are either not attracted to the business or are seeking better rewards elsewhere. And sawmills struggle against competitive imports and with the problem of finding markets for co-products.
Unfair share Housebuilding remains buoyant, but the UK sawn softwood sector is not getting a fair share of this important market, according to a report presented by the UK Forest Products Association at the FCAP meeting. Volumes have been reasonable during the late spring/early summer months, but with continued strong competition from Sweden and Latvia there is no evidence of any upward price movement.
The usual seasonal upturn has been seen for fencing and garden products and it is hoped that the weather will be good for the remaining weeks of summer and prolong demand.
Markets for falling boards are a problem and the palletwood sector remains extremely difficult, with very low priced Baltic timber – both softwood and hardwood – continuing to displace UK grown timber.
Forest Enterprise reports a slight improvement in log prices, with Green grade at £29.80 in July compared with £29.46 a month ago, and Red grade at £23.49 against £23.64. A year ago prices were £31.02 (Green) and £23.65 (Red), so there is still a distinct downward trend. However, with the recent strengthening of the euro and Swedish krona resulting in increased import prices, and the fact that in previous years prices have tended to fall back slightly at this time of year, there is “minor cause for optimism”.
Private growers in Scotland say demand for green logs remained steady in the second quarter, but prices came under added pressure as merchants sought to offset some of the effect of further price reductions for co-products. Demand for certified timber continues to develop strongly and it is becoming apparent that lower prices are being paid for non-certified material.
In England and Wales there is now an oversupply of standing timber and private growers are building a backlog of parcels – especially for species other than spruce and for poor quality material.
Closure of outlets With falling market demand it may not prove possible to place some of these volumes. Growers in England and Wales have again been badly affected by the closure of some important outlets: Forest Garden has shut its Stanford Court sawmilling operation – a move which took everyone by surprise and which leaves a huge problem for growers across central and southern England and the whole of Wales; and woodwool production has ceased at Pembridge, removing another customer for small diameter bar material.
South Wales is also about to suffer the shutdown of the cement-bonded particleboard line originally built by Pyrok – the product will now be manufactured in Belgium. After the demise of Tech-Board this was the only outlet for small roundwood in south Wales and leaves Kronospan as the only market for spruce chipwood in the whole of Wales.
Hardwood discussion The recent FCAP meeting included considerable discussion about the hardwood trade and, in particular, whether public funds being spent on various hardwood initiatives represented good value for money. The main focus seems to be on planting traditional British broadleaved species in order to increase woodland diversity.
However, with the remaining UK hardwood mills concerned about future supply of quality wood, it seems reasonable to seek a balance between environmental and commercial aims – which would mean consideration being given to which species are planted and to the timescale involved. There is arguably more to the cultivation of hardwoods than softwoods, and long-term funding is needed for the management of plantations as well as the initial planting.
As ever, good quality hardwoods continue to sell well while second quality material remains difficult. Overall the hardwood market is buoyant, but heavy reliance on imported temperate species – whether for quality or price – is expected to be a permanent feature of the trade.
Panel products The UK panel products sector is experiencing reasonably strong demand for many products, especially from the construction market. However, competition from imports is equally strong and prices are therefore depressed. The ready availability of relatively low priced recycled wood fibre is undoubtedly allowing UK producers to maintain competitiveness – but the impact on markets for sawmill co-products and small roundwood is of increasing concern.
Some panel products manufacturers are reported to have become much more demanding in relation to co-product quality and quantities than is usually the case at this time of year; and the increasing use of recycled fibre – from which significant volumes of fines are obtained – is reducing demand for sawdust.
Private growers in Scotland say the market for small roundwood continues to be extremely difficult. As processors reduce stocks from winter to summer levels, demand, particularly for chipwood, has been decidedly weak. This may lead to increasing problems with supply as the industry moves into the productive summer period.
There are also mounting concerns about the possible impact on wood supply of the imposition of weight restrictions on rural roads by local authorities. Such restrictions could lead to increased costs, or even result in areas of forest being land-locked. Difficulties are already being experienced in southern Scotland and northern England and it is feared the problem will intensify.
