Latest News - Iain Gray visits the Norbord plant at Cowie

Iain Gray visits the Norbord plant at Cowie
Thu, Apr 7, 2011

Scottish Labour leader Iain Gray has been told that the UK government's flagship green policies could cost hundreds of Scottish manufacturing jobs, waste billions of pounds - and, perversely, increase CO2 emmisions.  Mr Gray heard concerns about the effects of the renewable heat incentive (RHI) and renewables obligation (RO) on the wood panel industry during a visit to Stirlingshire wood panel manufacturer Norbord on 1st April.
 
The UK government launched the RHI last month as part of its strategy to revolutionise the way heat is generated and used in the UK.  Believed to be the first of its kind in the world, the policy aims to support emerging technologies and businesses in the UK as well as strengthening security of supply and reducing dependence on fossil fuel heating and emissions.
 
The development of sustainable low carbon energy alternatives has lead to a proliferation in large-scale biomass generators, where energy providers are being given financial incentives in the shape of Renewable Obligation Certificates (ROCs) to burn large masses of crops and wood.  
 
Wood panels, a vital component in the construction industry and in furniture manufacture, are produced from virgin and reclaimed wood - the same materials which biomass energy plants are being subsidised to burn.  However, the wood panel industry has been excluded from the policies and this could have a dire effect on local manufacturer Norbord, which employs 250 people at its plant in Cowie, Stirlingshire.  The company also employs 400 people in South Molton in Devon.
 
The company already has the support from Stirling MP Anne McGuire and she attended the breifing along with Mr Gray and Labour's Holyrood candidate for Stirling, John Hendry.
 
Karl Morris, MD of Norbord, said: "Despite significat communication and dialogue with Norbord, their industry representative body the Wood Panel Industries Federation (WPIF), and the Wood Panel APPG, the Minister and his department have failed either to appreicate or consider the unintended consequences of  the legislation.  Indeed, Mr Barker accepted in the Westminster Hall debate that the wood panel industry had not been considered within the scope of the RHI Impact Assessment.  Further, he quoted figures in the debate which demonstrate a profound failure of understanding of the issues involved.
 

"This failure even to consider the wood panel industry, and the use of inappropriate and inexact data, is profoundly concerning both to Norbord and our constituents.  The most basic analysis would demonstrate that the impact on the wood panel industry will be potentially devastating.

 
"Further discrimination would make the closure of wood panel plants in the UK, including Norbord's facilities in Cowie, Inverness and Devon, a real possibility.  This is clearly an unacceptable state of affairs for a sector which produces nearly £100m of tax revenues, £1bn of economic activity and supports 8,700 jobs.
"It may well be that the Department of Energy and Climate Change (DECC) is willing to sacrifice the wood panel industry on the altar of the Climate Change agenda.  And, although Mr Barker claimed several times in the Westminster Hall debate that this is not the case, DECC's actions seem significantly at variance with these protestations.
"To do so would be profoundly misguided, not just as considered by the wood panel industry which rightly has its own interests to protect, but even when considered in terms of the ambition of that Climate Change agenda for which Mr Barker is responsible."
 
With the demand for wood now outstripping supply, a recent study by the United Nations found that there could be a shortage of up to 400 million m3 of wood in Europe by 2020 due to the demands of biomass.
 
DECC estimates that the demand for wood for energy under the RO and RHI targets will reach 50 million tonnes.  This is against a UK supply of 12 million tonnes, according to DECC estimates.  Demand is now outstripping supply and cost of the raw wood materials used by the wood panel industry and the biomass producers has rocketed by 60% in the past three years.  However the wood panel industry does not enjoy the enhanced buying power enjoyed by the energy producers through the ROC subsidy.
 
Despite  continued lobbying by the Wood Panel Industries Federation (WPIF) and a recent European-wide protest against the directive, the industry's concerns have yet to be considered by the country's energy policy makers.
 
This growing concern was further confirmed recently when it was announced that the RHI's Impact Assessment did not cover any potential impact on the wood industries.  The exlusion comes after the WPIF submitted extensive supporting evidence to DECC.


Mr Morris added: "We are not anti-biomass and, indeed, as an industry we have pioneered the burning of our process-derived wood residues to generate heat and power, which is then fed back into our own manufacturing process.  This is the most efficient use of this scarce resource.  The introduction of a renewable heat incentive is to be welcomed, but to exclude the pioneer of this technology and the largest generator of renewable heat makes no sense.
"The current direction of travel that DECC is embarked upon will lead inevitably to the utterly perverse outcome of perfectly usable wood being directed, through a distorting and ill judged subsidy, to an increase in CO2 emmissions, reduction in Renewable Heat generation, and reduction in employment.
 
"We have asked many times that DECC consider rebalancing this equation through the RO and, particularly, the RHI funding mechanisms.  In particular, it seems both unreasonable and unfair that, as the UK's single largest industrial generator of Renewable Heat, we should be excluded from the RHI process. To be 'punished' as an early adopter, and for competitive advantage to be given to new entrants, is economic and environmental madness.
 
Although we have received backing by MPs and a wide range of other organisations and individuals, it's vital that political decision makers now being to listen seriously to our calls for more responsible use of wood and to create a level playing between ourselves and our competitors across the energy sector."
Iain Gray visits the Norbord plant at Cowie - Click to make an enquiry
Iain Gray with Karl Morris (left) the MD of Norbord.
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