Support role

Summary
• The Forestry Commission is engaging with private growers to secure wood fuel.
• It is also targeting under-managed woodlands.
• It is building data on resource estimates, demand and supply, and greater price transparency.
• It has created a trade association forum to co-ordinate industry development.
• Forest Research is undertaking R&D on wood fuel-related subjects.

Using wood as a fuel for generating heat and electricity helps to deliver on a number of government policy objectives. Especially relevant to the Forestry Commission (FC) are objectives on climate change mitigation, renewable energy and sustainable forest management.

Although the wood fuel industry in Britain is growing rapidly, it is still young and faces some challenging barriers. So we have an important role in supporting its growth through research, policy development, grant support and knowledge transfer.

None of our work, though, is done in isolation: we work closely with a wide range of enthusiastic partners on all aspects of the industry – research, technical and supply chain development, and so on. And although England, Scotland and Wales have different emphases and support mechanisms, they share many issues.

Supply security

Ensuring the sustainability of the resource is one. Because other, existing industries compete for the same home-grown material, we need to find ways of bringing additional material to the wood fuel market. One resource we're targeting is under-managed woodland: our England wood fuel strategy, for example, aims to access two million additional tonnes a year from this source by 2020, bringing wider benefits such as improved wildlife habitat and woodland health as well as employment.

Even allowing for this, it is likely that major users, such as power stations, will need to import material if they are to help the UK to meet its targets for renewable power generation.

Another approach is to stimulate the development of local supply chains to medium-scale users such as district heating schemes and commercial buildings. This can be particularly efficient in rural areas that are off the gas grid and close to where the wood is grown. By minimising the costs of transport, wood fuel can be price-competitive against fossil fuels, and can bring new jobs and income to rural areas.

Of course, we also need to be able to demonstrate sustainability against agreed criteria. There are concerns that insisting on the use of independent forest certification standards – or introducing rules specifically for biomass – will actually discourage owners of small, under-managed woods from bringing material to market. So we're working with the Department of Energy & Climate Change to engage fully with the EU in its discussions on sustainability criteria to ensure that those that are eventually applied will reflect the range of situations in the UK.

Before switching from fossil fuels to wood fuel, potential customers want to know whether the supply is reliable and the price is fair. To answer these questions and help build confidence in the market, we're addressing some important data issues. These include better resource estimates, improved information on current demand and supply, and greater price transparency.

The FC supplies some wood fuel, but we're constrained by our existing long-term volume contracts. In Wales we've ring-fenced 35,000 tonnes of small roundwood for the local heat market. This can be drawn down if local companies experience difficulties maintaining continuity of supply from their own material. In England and Scotland we're exploring the potential for freeing up some wood fuel-grade material to offer on the open market. However, our key thrust across Britain is through engagement with private growers to mobilise their local resources.

Suppliers' concerns

Potential suppliers too, have concerns. They need to know that there will be a market for their products before they commit to capital investment. To address this, we are using our own and other government departments' grant schemes to try to get the balance of support right between supply and demand. We have also established networks of advisers to bring together local clusters of suppliers and customers.

We're also on the case of quality assurance. We're aware that equipment and service failures, and variable-quality fuel entering the market, will give the industry a bad reputation and slow its development. It is critical that wood fuel is supplied at the right specification for the equipment. Many suppliers now operate quality control procedures, and these standards must be applied consistently across the supply chain (see p27). To help achieve this, we've brought together a forum of key trade associations to promote a co-ordinated approach to industry development, including quality assurance.

It is vital to ensure that players have access to the independent advice, information and support they need to ensure they meet the quality standards and make sound investment decisions. So we have an important role in knowledge transfer, through sound research and technical development. Much of this is delivered by our Forest Research agency, which is undertaking R&D on a wide range of wood fuel-related subjects. These include the establishment of 'energy forestry' research and demonstration sites on FC land. The agency also leads much of the research into wood fuel crops and technology, quantification of the resource and supply chain development.

Biomass Energy Centre

Forest Research also hosts the UK government’s Biomass Energy Centre, which provides advice and information on all biomass fuels through publications, its website, seminars and workshops, responses to enquiries, and the regional advisory officers.

Next in line in 2011 is the Renewable Heat Incentive, which will subsidise heat production from renewable sources and on which the UK government will consult this year. This has the potential to transform the wood fuel industry’s finances, and make it a much more attractive business proposition. With the support of the many fruitful partnerships we have built, we believe we will be well placed to help the industry take full advantage of it.