Energy and Climate Change CommitteeWritten evidence submitted by BSW Timber (BIO03)

1. BSW Timber is the UK’s largest domestic sawmilling group, processing around 15% of the UK’s annual timber harvest. The company has six mills across the UK (and one in Latvia). The group has an annual turnover in excess of £180 million, employing over 900 people; indirect employment accounts for another 2,500 jobs. It is one of the largest timber buyers in the UK.

2. BSW is currently implementing a £52 million five-year capital investment programme to modernise the mills and expand capacity. This includes investing in renewable heat generation, through the installation of biomass boilers which run on process derived residues from the company.

3. BSW is concerned about the impact of subsidies for large-scale woody biomass electricity generation both environmentally and on the long-term future of the UK forestry sector. BSW believes there is an unintended consequence from subsidies for large scale woody biomass energy generation, which will distort the domestic wood market and put UK businesses at serious risk.

4. Given the increasing role that timber should be playing in construction, we do not agree with measures which subsidise this valuable resource for burning, rather than processing. We believe it is short-sighted of Government to support the burning of wood. Rather, the Government must assess the best use of this valuable resource.

5. The UK has a limited wood supply; around 10.2 million tonnes annually. This is almost all used by wood processors. There simply is not enough domestic wood to service a new entrant (biomass) without displacing existing users. Better management of forests will not help to meet this demand; the Forestry Commission estimates that potential increase in production will only be 2–3 million green tonnes.

6. Energy generators say they will not burn “premium” wood such as sawlogs. However, we do not believe that the current higher prices of “higher quality” wood will not mean it is not burned. The price premium of saw-logs will not dissuade energy generators from using them for biomass, as it will increasingly become easier and cheaper to purchase whole trees instead of splitting them into premium and “lower value” parts. Generators will start to purchase saw-log timber, diverting this wood from the timber industry and undermining the Waste Hierarchy. Whole trees are already being used for pellets in North America.

7. In order to maintain their wood feedstock supply BSW’s suppliers and forestry partners have invested heavily in sustainable forest management. The future of UK forest industries is reliant on long term security of wood supply. Woodland creation has declined in recent years, and with increasing demand from bioenergy, the availability of raw material supplies for wood processors is under increasing pressure. Without access to domestic wood supplies, UK wood processors will be forced to close.

8. The Committee on Climate Change has recognised that wood has a valuable role to play in green construction, and that this should be prioritised ahead of burning wood for electricity. BSW Timber is a major producer of sustainable and low-carbon building materials. Wood is the least carbon intensive building material; every cubic metre of wood that is used in place of alternative materials saves between 0.7 and 1.1 tonnes of carbon dioxide. By using a timber frame, it is possible to reduce the carbon footprint of a typical 3 bedroom house by approximately 3 tonnes. 4.2 tonnes of CO2 can be saved per 50 square metre of wall element, by substituting timber frame and softwood weather boarding for brick and block. 13.85 tonnes of CO2 can be saved when softwood weatherboarding is substituted for PVCU weather boarding. There is, therefore, a need for the Government to reassess the environmental benefits of burning wood for electricity, especially where that burning is at the expense of more environmentally friendly uses of the wood.

9. Displacing sawmills will have economic, as well as environmental, costs. The forest industries employ thousands of people in the UK, largely in rural areas where unemployment is traditionally high. BSW’s Fort William mill will consume 420–450,000 tonnes of domestic roundwood per year and provide around 150 jobs on site. In contrast, a nearby 20MW biomass plant will consume around 300,000 tonnes of domestic biomass roundwood per year but provide only 15–20 jobs.

10. Displacement of the wood processing industries by subsidised electricity generators risks raising unemployment, losing valuable manufacturing businesses, and damaging the environment. BSW urges the UK Government to look again at its subsidy regime, and seek to incentivise only small scale local efficient heat and CHP biomass generation.

April 2013

Prepared 1st May 2014