‘Tescoisation’ of wood market by energy plants must not negatively impact on other wood-using businesses – Assembly committee hears

2 August 2010

Government subsidising of large energy plants that burn wood to generate electricity could displace smaller businesses from the wood market, according to a report published today by the National Assembly for Wales’s Sustainability Committee.

The inquiry by the cross-party group of AMs found that while new incentives by the government are encouraging use of renewable biomass, a monopoly held by big energy plants over materials could result in other wood-using businesses being driven out of the market, a process described in evidence to the Committee as the "Tescoisation" of the wood market.

The report calls on the Welsh Government to ensure that smaller businesses are not excluded through wood supplies being diverted exclusively for burning - which provides lower carbon benefits than other uses.

It also questions how well-equipped Wales is to deal with the increasing demand for biomass and recommends that the Welsh Government taps into currently unmanaged woodlands to obtain more materials.

Imposing restrictions on sending waste wood to landfill via environment powers recently gained from Westminster is another recommendation of the committee.

“The Committee agreed to undertake this inquiry because it recognises that bio-energy has the potential to substitute for fossil fuels, reduce greenhouse gas emissions and contribute to other policy objectives such as rural development,” said Committee Chair Kirsty Williams AM.

“However, evidence received by the committee showed that there are obstacles standing in the way of the successful development of the industry; including the availability of raw materials, financial and environmental issues and market opportunities.

“Correctly managed, biomass can deliver a significant reduction in net carbon emissions and we are keen for Wales to be the source of as much material as possible so that it can become a key player in this increasingly important industry.”