Latest News - Renewable Energy Subsidies affecting viability of Furniture Manufacturing

Renewable Energy Subsidies affecting viability of Furniture Manufacturing
Wed, Jun 1, 2011
During May, key industry leaders joined together at a Biomass Summit hosted by The Furniture Industry Research Association (FIRA) to discuss the impact of Government renewable energy subsidies. The event was attended by Alastair Kerr, Director General of the Wood Panel Industries Federation (WPIF) along with other industry and trade association representatives.
 
The event was organised to allow key industry leaders to discuss how government renewable energy subsidies, which encourage power companies to burn wood, are distorting the market for new timber, and forcing up the costs for the manufacturing of furniture products. 
 
It is estimated that these subsidies are artificially raising the costs for furniture manufacturers by as much as 50%, a cost increase which ultimately leads to higher prices for consumers.
 
Industry leaders and representatives who attended the event included British Retail Consortium (BRC), British Furniture Manufacturers (BFM) association, British Contract Furniture Association (BCFA), and the British Furniture Confederation (BFC) as well as furniture  manufacturer Senator International, retail giant Home Retail Group (parent to Argos and Homebase), The Decorative Panels Group and also representatives from manufacturer of wood based panels, Egger.
 
Jonny Westbrooke, FIRA COO said, "The burning of virgin wood is hitting the furniture industry hard, and is leading to increased costs in a delicate economic climate.  The Biomass Summit bought together industry leaders to discuss how we can restore the balance in timber pricing [...]  It has been a fantastic achievement to get so many key players around the table to discuss an issue which affects the furniture industry at all levels."


Current subsidies granted to energy companies for burning wood create a distortion in the wood market and risk raising the price of timber to a level at which wood panel manufacturers would not be able to compete.  The Wood Panel Industries Federation (WPIF) is calling on the Government to reconsider the prominent role it has accorded to biomass in meeting renewable energy targets and particularly the financial incentive provided to electricity generators to burn wood under the Renewables Obligation (RO). 

 
The summit agreed that there is a shared concern that needs to be communicated clearly to Government.  Members have committed themselves to continue to work together to communicate this message.
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