Norbord calls for change to biomass subsidy

Published:  30 August, 2016

The government's support for biomass power plants that burn wood fuels is distorting the timber market and seriously disadvantaging manufacturers of wood panel products, says Norbord.

Biomass is a growing part of the renewable energy sector. Major power generators like Drax are converting former coal-fired boilers to burn biomass as a sustainable alternative to fossil fuels, while numerous smaller generators are setting up purpose-built biomass plants to burn wood.

The government pays subsidies to encourage energy suppliers to burn wood with no attempt to specify the type of wood fuel that should be used; the subsidy is paid whatever the type or source of wood.

Wood comes in many forms – as sawlogs, small roundwood, green chips, sawdust and recycled fibre. All are combustible, which is all the power companies' care about, and the government pays the same whatever type goes into the furnace.

However, there is a well-established market for wood, and the market differentiates wood by price. The first choice wood for biomass is, unsurprisingly, the cheapest: chips, recycled fibre and forestry thinnings.

These materials are often described, misleadingly, as ‘waste' wood with the implied suggestion that they are suitable for little more than fuelling biomass boilers. In fact, they constitute the basic feedstock for many wood panel products such as OSB, chipboard and MDF.

By subsidising wood-fuelled biomass power stations, Norbord believes that the government is distorting the market for wood fibre and eroding competitiveness. Therefore, the wood panel products industry is calling on the government to refine the subsidy process and deliver a level playing field for all consumers.

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