The government’s publication last month of the details of the Renewable Heat Incentive held few surprises.

However, there were some alarming omissions in the draft regulations, such as restricting eligible heat transfer to water and steam. This meant greatly reducing the potential for renewable heat generation by excluding the most efficient heat transfer mediums: thermal oil and direct air heating. A speedy response from the wood panel industry has led to the inclusion of thermal oil in the RHI, though the Department of Energy and Climate Change will not include direct heating.

Yet the biggest problem remains a grave lack of understanding of the UK wood market or industries, which did not even merit a mention in the RHI’s Impact Assessment. DECC’s shortcomings on wood knowledge were evident in the Minister’s speech during a recent Westminster Hall debate on the wood panel industry when he cited only modest increases in sawlog prices over five years. If his department had any understanding of wood use, they would realise they should be measuring the price of small roundwood, chips and sawdust to get a feel for the impact of biomass energy demand.

Prices for the whole tree, including this material, have risen 55% over the same period. However, with electricity generators receiving over £80 for every MWh of wood-fired electricity generated (approximately a tonne of wood), it is only a matter of time before sawn timber ends up being burnt instead of being turned into useful products.

Through the Make Wood Work campaign we are urging DECC to revise the Renewables Obligation – which supports electricity generation – so that support for wood-fired electricity generation alone (without capturing useful heat) is greatly reduced or eliminated in favour of support for small-scale and efficient wood heating and combined heat and power.

Large-scale electricity generation from wood is not only hugely wasteful but will reduce the UK’s ability to produce carbon-storing, sustainable products from our limited and precious forests. We want to see existing wood processing continue alongside a biomass sector that makes the best use of peripheral materials.

Alastair Kerr is director-general of the Wood Panel Industries Federation.