On Monday 12 December, the British Furniture Confederation (BFC) and the Furniture Industry Research Association (FIRA) held a meeting at the House of Lords to launch a report that focuses on the Renewables Obligation Woody Biomass Subsidy and the detrimental affect it is having on British manufacturing.
The launch event enabled the BFC and FIRA to share the report with parliament, and appropriate Ministers and MPs were invited. This report is the outcome of a number of Biomass summits held at FIRA earlier this year. These events brought together key industry leaders to discuss how government subsidies encouraging power companies to burn wood, are distorting the market for new timber, thereby forcing up prices for the manufacturing of furniture products. The woody biomass report will now be used to lobby the Government on behalf of the furniture industry.
The document outlines a series of recommendations on how the Government can ensure that manufacturers are allowed to continue business without facing the difficulty of coping with rising prices from the woody biomass subsidy distortion.
The report also explains how the biomass subsidy is having a negative economic impact within the UK furniture industry. Following the introduction of biomass subsidies, wood prices have risen by 55.1 per cent over the past 5 years, having a significant impact on furniture production margins. With increased costs for furniture production, an increase in jobs losses is also likely. Many manufacturers are based in rural areas where unemployment is already high and there are limited employment opportunities. As a result, if the UK wood panel industry was to disappear, 4,400 jobs would be lost.
With increased costs for furniture production, it follows that furniture product prices for the consumer will also increase. This is especially poignant as the subsidy paid for burning renewable fuel is paid by consumers through their electricity bill. This means consumers are paying for a renewable energy form which distorts the market perversely against them as both a consumer and also to British manufacturing. Over its life time, burning woody biomass also emits significantly greater CO2 than wood panel manufacturing. The report suggests that the biomass subsidy should not encourage the burning of virgin wood, which could be used productively through its lifecycle, before being burnt for fuel. It encourages that furniture at the end of its lifecycle is burnt for fuel, rather than placed in landfill. Furthermore, the report discusses how biomass stations relying on wood imports from abroad are a threat to the world’s forests and may even increase climate-change emissions.
The Full Report to download (PDF-Document)
Source: The British Furniture Confederation, press release, 2011-12-12.