Monday, 11 February 2013

Beware the consequences of Biomass demand on wood prices & Hyndburn's furniture industry

Raising the issue last week in Parliament.

I am currently serving on the Public Bill Committee for the Energy Bill, and during a recent session of the committee I raised the issue of burning biomass for energy.

There are a large number of Hyndburn residents who are employed in the furniture manufacturing industry, the raw material of which is largely wood. It has been a concern raised by many people in the past, including by me in the main chamber of the Commons, that burning wood causes the price of wood to increase, which is bad for the furniture industry.

According to the industry, due to Government subsidies for the burning wood for electricity, the price of wood has risen by over 55% in the past 5 years. It is government subsidies that is at the heart of rising wood prices encopuraging teh growth in the numbers of wood burning biomass plants.

Though it was disappointing that the Minister would not say anything direct or make any firm commitments, I am glad to see that he recognised that there was a trade off to be made between burning wood for energy and the effect that is has on the furniture industry.

Graham Jones (Hyndburn) I want to briefly make some comments, primarily because I have a huge furniture industry in my constituency and in the surrounding areas, as well as training colleges. They continually approach me to raise concerns about biomass. I noted the hon. Gentleman’s suggestion that we should consider waste wood being used in biomass plants. Such wood is valuable as fresh timber for the furniture industry. It is not only fresh timber but recycled timber. In both commodity markets we have seen exceptional rises in the cost of purchasing such timber and that has impacted considerably on the furniture industry.

I thank the Minister for these exchanges; he has been very helpful. Would he go on the record and say whether he thinks that the capacity market auction and the contracts for difference would allow the Government to negotiate and implement a policy in which we would see greater production of wood—greater plantation of trees—that would meet future capacity and lower prices? In short, does he see tree production as an element in the capacity market auction and in contracts for difference, so that we can ensure a lower price for consumers through biomass, and perhaps lift that 400 MW of biomass production to a much higher figure, given that we will have increased production of wood.

The Minister responded with the following:

I think the hon. Gentleman is skilfully—perhaps even a little playfully—trying to extract an on the record commitment from me on a very specific series of measures, which I am too wily to make. One can be wily and straightforward; that is not a paradox.

I am prepared to look at all those things. If we are to have a proper debate about the consequences of the demand for fuel and the need for timber, it is absolutely right that we consider it in the round. We would not be asking for evidence if we were not going to consider that evidence, having consulted and reported on our considerations. I am not prepared to make any commitments, but I am certainly prepared to retain an open mind about these matters. They are complex, and as with any policy, it is right to say that there can be unintended consequences of a range of kinds. Building policy is not about denying that; it is about being willing to respond appropriately when the consequences become clear, having measured them closely. That is precisely what I intend to do.

With that, I conclude my remarks on the basis that I believe that biomass is an important part of what we can do to build a more sustainable generating capacity. I accept that, as with each technology, there will be specific challenges associated with it, but the Government are ready for these challenges. We will move forward in a measured way. True courage is cool and calm. Those are the words of the great Tory social reformer, Lord Shaftesbury.