Just as the world is coming to terms with one crisis, another begins. Outcomes are impossible to predict, but one thing for sure is that, as with Covid, events in Ukraine will impact the market here.

Trading difficulties and consequential production drops experienced by our members during the first Covid lockdown were reversed in 2021 with exceptional levels of demand, in turn creating supply challenges.

Whilst demand is still strong today and is likely to remain so in 2022, there are signs in some market segments of a return to pre-Covid trends.

Everyone is feeling the pain of rising global energy costs, but the long-term impacts of inflation on consumer confidence have yet to play out.

The three most important inputs into panel production are energy, wood, and resin binders.

Whilst a large proportion of the industry’s heat demand comes from burning its own process dusts and trimmings, its demand for electricity and some gas is still substantial.

Rising wholesale gas costs impact directly on both gas and electricity bills (the UK still has a dependency on gas-fi red electricity) and indirectly on the production costs of key chemical inputs, all adding to inflationary pressures.

The long-term solution is to continue the drive towards total decarbonisation and Net Zero.

As an energy intensive sector, our members are acutely aware of the benefits of decarbonising the process and are well ahead of most other energy intensive manufacturing.

But there’s still more to be done. We recently commissioned consultants to undertake a decarbonisation study to examine what challenges remain.

Whilst existing technologies such as biomass CHP can be pursued today, it is not an option for all.

Likewise, technologies such as green hydrogen could be available in the future, but again its unlikely to be available to every site, so instead a range of strategies will have to be employed across the sector.

Unless a range of technology alternatives is widely available and the government meets its targets to decarbonise electricity and gas grids, the industry will not be able to fully decarbonise without carbon offsetting.

The industry’s other priority is wood availability. Scotland leads the way in planting targets but the overall UK target of 30,000ha by the end of the parliament falls significantly short of Committee on Climate Change recommendations, ie 30,000-50,000ha by 2024.

The issues are whether enough is being done to meet targets set and whether there is enough commitment towards productive planting. In respect of both, the evidence is not particularly encouraging.

As a federation, we raise issues directly with officials and ministers and use the Wood Panel Industries all-party parliamentary group to garner support of parliamentarians.

To give a more joined up approach, we are in the fi nal stages of setting up a cross-party parliamentary group in the Scottish Parliament.

There are two drivers behind the UK’s energy policy – climate change and energy security. Time will tell whether events in Ukraine push the balance of priorities towards the latter and whether the role of woody biomass is affected.