UK wood panels manufacturers have warned the energy minister that part of their industry could fold if the government presses forward with a plan to extend renewable fuels subsidies being paid to the power industry.
The Wood Panel Industries Federation (WPIF) asked minister Stephen Timms during the October 23 meeting at the DTI to review a White Paper proposal, which encourages power companies to convert from coal and gas and to build 100% biomass power stations.
Since last year, power generators have been eligible to receive a subsidy to produce some energy from renewable resources under the “Renewable Obligations” policy, which aims to help cut UK CO2 emissions.
WPIF director Alastair Kerr described Mr Timms as “sympathetic” to members’ concerns.
He said extending the subsidy could distort the wood co-products market, with the result that panel manufacturers would not be able to compete with power companies for raw material.
“The subsidy will undoubtedly hand control of the market to the energy companies and drive up the price of [wood] biomass.
“A price rise of only a few pounds would seriously impact on the competitiveness of the wood panel manufacturers, threatening their viability,”
he said.
