Latest News - Neil Parish MP visits Norbord plant in South Molton

Neil Parish MP visits Norbord plant in South Molton
Fri, Apr 15, 2011
Tiverton and Honiton MP Neil Parish has been told that the UK government's flagship green policies could cost hundreds of manufacturing jobs in Devon, waste billions of pounds - and, perversely, increase CO2 emissions.
 
Mr Parish heard concerns about the effects of the renewable heat incentive  (RHI) and the renewables obligation (RO) on the wood panel industry during a visit to South Molton wood panel manufacturer Norbord on 15 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 400 people at its plant in South Molton, Devon, including a number in Mr Parish's constituency.  The company also employs 250 people in Cowie, Stirlingshire, and a further 120 at its site in Morayhill, near Inverness.
 
Mr Parish said: "The failure even to consider the wood panel industry for inclusion in the RHI is a clear omission and is deeply concerning for me. There must be a hierarchy of use for wood, where it is used, re-used, recycled and, then only when it has reached the end of its useful life, burned.  The wood panel industry is a model industry for this hierarchy, making it one of the greenest sectors around.
 
"It is clearly ridiculous that energy companies are being subsidised to burn wood and thereby release carbon into the atmosphere when this carbon could be locked in the production of wood panels. If nothing is done, wood prices could potentially rise to a point where they meet that paid by generators for imported material.  This will put thousands of jobs in the UK wood panel and associated industries at risk and has the potential to escalate costs for the construction and furniture industries.
 
"I will be urgently writing to Greg Barker- the Minister responsible- to prevent this situation arising."
 
Karl Morris, MD of Norbord, said: "Despite significant communication and dialogue with Norbord, our industry representative body the Wood Panel Industries Federation (WPIF), and the Wood Panel All-Party Parliamentary Group, the Minister of State for Climate Change, Greg Barker, and his department have failed either to appreciate or consider the unintended consequences of the legislation.
 
"Indeed, Mr Barker accepted in a recent 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 could demonstrate that the impact on the wood panel industry - and a significant number of Mr Parish's constituents - will be potentially devastating.
 
"Further discrimination would make the closure of wood panel plants in the UK, including Norbord's facilities in South Molton and the two in Scotland, 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, many of them in North Devon.
 
"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 is not the case, the 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 400million m 3 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 50million tonnes.  This is against a UK supply of 12million 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 benefit from the enhanced buying power enjoyed by the energy producers through the RO subsidy. Despite continued lobbying by the WPIF and a recent European-wide potest against the directive, the industry's concerns have yet to be considered by the country's energy policy makers.
 
The growing concerns 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 the RHI is to be welcomed, but to exclude the pioneer of this technology and the larget generator of renewable heat makes no sense. The current direction of travel that the DECC is embarked upon will lead inevitably to the utterly perverse outcome of perfectly usable wood being directed, through a distoring and ill judged subsidy, to an increase in CO2 emissions, reduction in renewable heat generation, and reduction in employment.
 
"We have asked many times that DECC considers 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 adopted, 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 begin to listen seriously to our calls for more responsible use of wood and to create a level playing between ourselves and our competitiors across the energy sector."

  • Left to Right: Steve Roebuck (Director of Health, Safety & Environmental Affairs), Neil Parish MP and Justin Smythe (Project Manager at South Molton).
  • Norbord logo
  • Left to Right: Wayne Hovord (Plant Manager at South Molton), Neil Parish MP and Steve Roebuck (Director of Health, Safety & Environmental Affairs).
Neil Parish MP visits Norbord plant in South Molton - Click to make an enquiry
Left to Right: Steve Roebuck (Director of Health, Safety & Environmental Affairs), Neil Parish MP and Justin Smythe (Project Manager at South Molton).
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