Overview
Potentially the growing markets for biofuel present an economic opportunity for producers of wood waste. The demand for sources of renewable energy is rapidly increasing. The UK government has a target of providing 100% of energy from renewable sources by 2035. The goal was outlined during the Conservative Party conference on October 2021. Building on the government’s target to cut CO2 emissions by 78% by 2035 compared with 1990 levels and comes amid a period of stress in the UK energy system caused by rising international gas prices.
Biofuel, the energy from natural materials including wood, is part of this renewable mix and therefore the demand for wood, whether virgin wood or waste wood, for use as a biofuel is rapidly increasing. This provides an economic opportunity for the joinery industry, but also some challenges.
Challenges
• Currently, there is considerable confusion and lack of understanding over the use of wood waste as a biofuel, and the types of waste material which can, or cannot, be used
• Improved communication mechanisms are required to advise the timber industry on wood waste legislation and its use in biomass energy
• There is an potential emerging inconsistency in the policies for producing renewable energy and the waste hierarchy principles which seek to reuse and recycle resources before burning them
Burning virgin timber as a biofuel will have the opposite effect. It is less environmentally and economically sensible to divert product that could be re-used effectively by sectors such as the panels industry or other important value-adding manufacturing industries. Burning wood is greener than burning coal in the long term but power stations should only burn wood that has no other use and would otherwise go to landfill, rather than trees straight from our forests. Subsidies here can have a distorting effect and divert timber away from primary use.
Processing Wood Waste
Somerset County Council and Bristol City Council (see case study in the Annexe 3 in the TREP Report) has a wood collection project specifically aimed at collecting wood waste for burning in school biomass boilers.
The quality of the wood being burnt needs consideration. The waste fuel should not include contamination from wood that could be described as hazardous. To address this, the Publicly Available Specification 111 (BSI PAS 111:2012) for processing wood waste was commissioned by WRAP in collaboration with the British Standards Institution (BSI) and extensive consultation with the BWF and wider timber and wood recycling industry.
The aim of PAS 111 is to provide a specification for individuals and organisations recovering and processing post-industrial and post-consumer waste wood into wood products such that potential customers will be assured that they are procuring a material of consistent and verifiable quality.
If the minimum specification is met or exceeded then the material is PAS 111 compliant; if the minimum requirements are not met, then the material is non-compliant, even if an end user’s specification is met.
The following markets account for the majority of recovered wood consumed in the UK and are covered by PAS 111:
- Panelboard manufacture;
- Biomass energy generation;
- Animal bedding;
- Mulches;
- Equine surfaces;
- Pathways and coverings; and
- Industrial and commercial applications.
The PAS 111 document can be downloaded here
Renewable Heat Incentive (RHI)
What is the RHI
The Renewable Heat Incentive (RHI) was launched in November 2011 to provide 20 years of financial support to a business that installs renewable heat initiatives.
The scheme pays participants that generate and use renewable energy to heat their buildings.
Why is this subsidy available?
By increasing the generation of heat from renewable energy sources (instead of fossil fuels), the RHI is focused on helping the UK on reducing greenhouse gas emissions and meet targets for reducing climate change.
In the case of woodworking companies, some companies are beneficiaries of the RHI by virtue of the fact they burn production waste to heat their factories.
Eligibility
To be eligible for the scheme:
- Your equipment must be installed in England, Scotland or Wales on or after 15 July 2009
- You can’t use a public grant to buy or install the equipment
- The equipment you install must be new and of a certain size or ‘capacity’
- The equipment and installer must have Microgeneration Certification Scheme (MCS) or equivalent certification (if available for your type of installation)
- Your equipment must use liquid or steam to deliver the heat
- Your equipment must be used to heat a space or water – or for carrying out a process where the heat is used within a building
- You can’t use the equipment to heat a single home (though a combination of homes sharing a heating installation might be eligible – eg a block of flats)
A more detailed definition of eligibility is availabe from OFGEM here (but the suppliers of your equipment should be in a position to advise you on eligibility)
Tariffs for the RHI
You get a certain amount per kilowatt hour (kWh).
Small and medium-scale biomass tariffs have 2 payment rates called ‘tiers’. You’ll be paid at the tier 1 rate up to a certain limit. If you use more energy than that, the rest of the energy is paid at the tier 2 rate.
Example
You install a biomass boiler with a capacity of 175kWth. Because of the capacity, it’s on the ‘Small Biomass’ tariff. You use the boiler at full capacity for 2000 hours in 1 year.
You’ll be paid:
2.85p per kWh (the tier 1 rate) for the first 1,314 hours
0.75p per kWh (the tier 2 rate) for the other 686 hours
Note above was based on information available in August 2017 – For a list of current tariffs click here
Further Information
March 2017: The detailed Non Domestic RHI Guidance from Ofgem
August 2016: A useful FAQ on RHI matters for businesses from Ofgem
Read about the BWF Response to the RHI consultation here
