Sawmilling companies are seeing their energy bills soar as the government’s new climate change levy begins to bite.
The sector is being hit harder than other parts of the timber industry because it is not eligible for a rebate.
Hamish Macleod, general manager at Howie Forest Products, said the firm’s last two electricity bills were up 10% since the levy’s introduction.
Mr Macleod, also the vice-president of the UK Forest Products Association, said: ‘It’s just another cost which we have to bear. There is a rebate on national insurance contributions but this covers only about 15% of the levy.
‘The government is claiming it is a success but the manufacturing industry is bearing the cost. We are now waking up to the fact that we cannot argue the levy on the production side.’
Scottish sawmiller James Jones & Sons has also seen a 10% rise in its latest electricity bills, costing ‘thousands’ extra.
Senior manager Roger Thornton said: ‘It makes things extremely difficult. Margins are at the moment almost non-existent. It’s simply another tax.’
The panel industry has negotiated an 80% rebate on the levy (TTJ June 2) but Peter Wilson, executive director of the Forest Industries Development Council, said sawmills had been ‘caught’ as they did not use the same high electricity levels as the panel industry.
‘Any extra burden on business is of great concern and affects our ability to compete with imported products,’ he added.
