Does the price of woodfuel restrict initiatives to increase production?

Summary

Forestry Commission England’s Woodfuel Strategy aims to increase woodfuel supply and create a viable and sustainable biomass industry. Working with the Biomass Energy Centre, Forest Research reviewed available information to assess how pricing along the supply chain affected additional woodland harvesting.

Key findings and recommendations

Findings

• No published data available on prices that buyers are willing to pay to woodland owners for raw materials for woodfuel
• Limited data on prices at every other stage of the emerging woodfuel supply chain
• Estimated total woodfuel production costs (2008-09 prices) range from £21-£83 per tonne for woodchips and £14-£49 per tonne for firewood logs, based on limited case study data
• Based on a comparison of prices paid for small roundwood for woodfuel
  from the public estate, a price increase of up to £10 per tonne may be needed (excluding any necessary infrastructure costs) to cover production costs

Recommendations

• Data on prices, quantities and costs should be collected regularly to supply data for econometric analyses of woodfuel markets
• More comprehensive analyses should investigate how the woodfuel sector affects imports and the substitution of material from other wood-using industries
• GIS analysis of potential woodfuel resources and costs of supply from under-managed woodlands will support more precise estimates of required price increases to cover production costs
• Underpinning research is needed to assess how factors such as woodland location, size, road access, risk of ground damage, terrain slope and potential biomass yield affect estimated costs
• Costs and earnings surveys could be undertaken for the main groups involved (including woodland owners, purchasers of raw materials for woodfuel, processors and woodfuel product suppliers) to try to fill knowledge gaps concerning production costs, prices for materials used and woodfuel products
• A survey of first-hand purchasers could supply crucial data on the price buyers are willing to pay for raw woodfuel
• Owners of under-managed woods could provide data on the mark-up they require to supply materials for woodfuel

Funders and partners

Commissioned and funded by the Forestry Commission.

Research conducted in partnership with the Biomass Energy Centre

Status

The project was completed in 2008.

Contact

Vadim Saraev