Wood recyclers are facing an unprecedented rise in costs which many operators will have no choice but to pass on, according to the Wood Recyclers’ Association (WRA).
Sky-high prices for diesel and electricity are placing additional costs on businesses already hit by the removal of subsidised red diesel and driver shortages. Longer lead times for new trucks and equipment are also having an impact.
While inflationary pressures are affecting all sectors, the wood recycling industry is particularly impacted due to its reliance on heavy machinery, such as shredders, to recycle material into valuable end products. It is also dependent on haulage for which prices have shot up.
Although there are mechanisms in place for some of these expenses to be recouped from waste wood suppliers through index-linked contracts, these are often very limited and do not cover the full scale of the increases.
The WRA is now seeking to alert wood suppliers such as local authorities and waste management companies to the market pressures so they can prepare for the inevitable changes that are coming.
Julia Turner, Executive Director of the WRA, said: “The cost of reprocessing waste wood has gone through the roof. In the past 18 months there has been a steady hike in costs to levels which are now unprecedented, placing a huge burden on our members.
“A lot of mobile plant used to run on red diesel but since the sector’s entitlement to use this ended in April, costs to run these machines have rocketed and now we are also seeing record fuel, haulage and energy prices.”
Gate fees for recycling waste wood are typically higher in the summer and the WRA is warning that these spiralling costs will apply further upwards pressure.
Julia commented: “We want to raise awareness that it’s tough out there at the moment for our members. They are all being squeezed and many will have no choice but to pass those costs on.”
“While this may not be welcome news, the sooner our suppliers understand the pressures, the sooner they can prepare for the inevitable changes and make the market more resilient going forward”.