The Wood Recyclers’ Association (WRA) has asked the Government to give wood recyclers more time before it removes the entitlement to use red diesel.
In this year’s Budget the Government announced it is removing the use of red diesel from April 2022 in certain sectors, including wood recycling and reprocessing.
In its response to a consultation launched by the Government about the proposal, the WRA has outlined the impact such a short time period for the change will have on its members and others in the sector. It has asked for a five year phase-in to allow businesses to implement new ways of working without risking a financial crisis.
Julia Turner, Executive Director of the WRA, said whilst the trade body accepted the reasons for the new rulings, it felt the timescale was too tight and would mean many wood recyclers would be unable to absorb the costs.
“There are currently no reasonable alternative fuels for our sector, so white diesel would have to be used instead,” said Julia. “Not only is this bad for the environment, but it would increase costs by nearly £7 million a year. For an average site processing 75,000 tonnes of waste wood per annum, the yearly cost would be just over £125,000 which is just not financially viable for businesses.”
She added: “It is unlikely that the off-takers for this material – the panel board industry and biomass sector – would be willing to increase the price they pay for material to help recyclers fund it as their margins are already tight.”
The waste wood sector currently consumes circa 14 million litres of red diesel per annum at a cost of around £6.6 million. It is used for mobile processing equipment, loaders, shovels, fork lifts, stand-by generators etc.
Julia said many recyclers would look to change the mobile equipment which predominately uses red diesel, to electric plant in the long-term, but that again had costs associated with it and would take time.
“Doing this too soon could create a perverse environmental outcome as it would mean disposal of plant and machinery before its natural end of life,” said Julia.
“The wood recycling sector is already committed to the principles of the circular economy and in fact is an excellent example of it in practice, with all material being reused, recycled or recovered and no requirement for landfill,” she added.
“The use of waste wood in the biomass sector is also already making a significant contribution to the replacement of fossil fuels. We therefore recognise the requirement to move away from diesel use as much as possible, but with the recent impacts of Covid 19 on our sector and the absence of realistic alternatives as well as the indirect costs of replacement and required electricity upgrading to sites, we would request that Government consider a more realistic timeframe to implement this.”
The UK produces 4.5 million tonnes of waste wood each year, with end markets for all of it:
- Three million tonnes goes to Chapter IV compliant biomass. Producing renewable power for 750,000 households
- Approximately 1 million tonnes goes to panel board which adds £850m GVA to the UK economy each year
- 500,000 tonnes goes to added value markets such as animal bedding and equine surfacing.