The UK Forest Products Association (UKFPA) welcomed the government’s recent decision to curtail subsidies for burning wood for electricity generation in large-scale power stations, but said the threat from the combined heat and power (CHP) sector would remain.
The government’s Electricity Market Reform Delivery Plan, released for consultation on July 18, recommends subsidies for existing power stations converted to burn biomass to end in 2027.
The government is also proposing to cap payments to new dedicated biomass electricity-only power stations to 400MW. Dedicated CHP plants will be exempt.
"Whilst we do not oppose highly efficient CHP plants, their scale and location must be appropriate to avoid unnecessary tensions in the wood supply chain," said UKFPA executive director David Sulman.
"The threat to the wood processing sector remains, especially as dedicated CHP plants will continue to receive subsidies.
"We cannot be complacent. Generous subsidies for electricity generators will continue for some years yet and the threat of further displacement of wood from existing domestic wood processors persists too as a consequence."
