To ask the Secretary of State for Environment, Food and Rural Affairs what assessment her Department has made of the effect on (a) the wood market, (b) the wood panel industry and (c) other wood processing industries of not differentiating subsidy support for biomass feedstocks sourced domestically and internationally; and if she will make a statement.
I have been asked to reply on behalf of the Department of Energy and Climate Change.
DECC has carefully considered the potential impacts on the wood products industry of biomass electricity incentives.
Analysis published alongside the Government's Bioenergy Strategy(1) shows that the UK is a price taker in the global market and that UK wood prices have not correlated with energy demand in recent years. The use of sustainably sourced biomass feedstocks by the energy sector is set to increase' both in the UK and globally. However, for commercial reasons the very large majority of the UK increase is expected to be fuelled by imported feedstocks under long-term supply contracts, and as such the Government does not consider that biomass deployment in the electricity sector will have a significant impact on the dynamics of the domestic UK wood market.
Recognising the scope for market uncertainty, DECC is working closely with the wood products industry and biomass electricity generators to ensure robust monitoring measures are in place for biomass feedstocks. These measures will provide early warning of any supply risks from the electricity sector and give confidence to the wood products industry and its investors that domestic supplies of feedstocks will continue to be available.