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Technical Report Templates Final Report Regional Market Assessment for Wood Waste for North East England Project code: RED002001 ISBN:1-84405-369-5 Research date: Date: March 2007 Regional Market Assessment for Wood Waste for North East England 2 WRAP works in partnership to encourage and enable businesses and consumers to be more efficient in their use of materials and recycle more things more often. This helps to minimise landfill, reduce carbon emissions and improve our environment. Written by: ESYS Consulting Limited Front cover photography: Different sized pieces of wood from a construction site. WRAP and ESYS Consulting Limited believe the content of this report to be correct as at the date of writing. However, factors such as prices, levels of recycled content and regulatory requirements are subject to change and users of the report should check with their suppliers to confirm the current situation. In addition, care should be taken in using any of the cost information provided as it is based upon numerous project-specific assumptions (such as scale, location, tender context, etc.). The report does not claim to be exhaustive, nor does it claim to cover all relevant products and specifications available on the market. While steps have been taken to ensure accuracy, WRAP cannot accept responsibility or be held liable to any person for any loss or damage arising out of or in connection with this information being inaccurate, incomplete or misleading. It is the responsibility of the potential user of a material or product to consult with the supplier or manufacturer and ascertain whether a particular product will satisfy their specific requirements. The listing or featuring of a particular product or company does not constitute an endorsement by WRAP and WRAP cannot guarantee the performance of individual products or materials. For more detail, please refer to WRAP’s Terms & Conditions on its web site: www.wrap.org.uk Executive summary INTRODUCTION & STUDY OBJECTIVES Following on from publication in 2006 of the “Regional Supply Chain and Recyclate Market Development Plan for the North East Region”, this study looks in greater detail at the wood recycling market in the region. The report was commissioned by WRAP to support ONE NorthEast in considering what interventions they could make in supporting growth in the supply chain. Waste wood is of particular interest in the region due to a number of high profile developments, including UK Wood Recycling Limited in Teesside; Egger (UK) Ltd’s new plant and WID compliant boiler in Hexham, which will increase the volume of waste wood utilised by the company considerably; and recent research which has warned of supply shortages in the wider region of virgin timber and saw mill co-products, thus increasing the potential demand for waste wood. The key objectives of this study are to: Investigate the current regional supply chain for the wood recycling and biomass sectors; Review overall demand for waste wood; Assess opportunities for and the barriers to expansion in the regional wood recycling market. There are EU and UK legislative drivers affecting both the supply and demand sides of the wood recycling and recovery sector, including the Packaging and Landfill directives, the Climate Change Levy and Renewables Obligation and the Waste Incineration Directive (WID). It is the intention of legislation to maintain the waste hierarchy – reduce; reuse; recycle; recover (refer to page 17, Definitions) in that order – but in practice there are fears amongst industries utilising wood recyclate that the energy sector could swallow up waste wood which could be reused/recycled. Grades of waste wood may be summarised as follows: 1) Clean recycled waste wood; 2) Panelboard grade (a mix of grade 1 and mixed grade wood); 3) Fuel grade; and, 4) Hazardous grade. Details of the types of wood waste falling in to each of these categories are given in the body of this report. THE REGIONAL ECONOMY The North East is the smallest of the English regions in both area (8,592 square km) and population (2.6 million, 5% of England’s population). It is largely rural but also contains the urban conurbations of Newcastle, Gateshead, Sunderland and Washington around the river Tyne. The region is administered by 2 county, 13 district and 10 unitary authorities across 4 sub regions. The North East is the poorest of all of the English regions with an economic output 40% below that of London. With two-thirds of the region being rural, the performance of the rural economy is very important. Earnings in the region are 87% of the English average and GVA per head is 77% of the English average. As such the region has benefited from European Objective 2 and 3 regeneration and social funding and has UK DTI ‘assisted area’ status for Teesside. Economic restructuring in the 1970s and 1980s saw a decline in the manufacturing sector within the region. The most significant sectors in the region now are the Public Sector (32% of employment), Distribution & Leisure (22%), Finance (16%) and then Manufacturing (12%). In economic terms, the wood-based industries sector is important to the region – representing around 3% of the region’s manufacturing jobs and 5.6% of England’s wood manufacturing jobs. The 3,700 regional jobs in saw milling and wood based manufacturing industries can be estimated to contribute around £50 million to regional Gross Value Added (GVA), based on the regional average GVA per head of £13,524 in 2004. Salaries from the sector amount to some £62 million per annum (based on median gross weekly wages in the region of £322). The wood reprocessing sector in the region has four main employers: Egger (UK) Ltd at Hexham, UK Wood Recycling Ltd at Wilton, Wood Pellet Energy UK Ltd in County Durham and Reivers Reprocessing Ltd in Gateshead. Regional Market Assessment for Wood Waste for North East England 4 There are other wood reprocessing operators, although these tend to be waste management and collection companies who process wood as part of a wider operation. The impacts on the regional economy of dedicated wood reprocessing employment can be summarised as follows: Current Within 3 to 5 Years Employment numbers in the North East 33 73 Annual GVA @ £13,524 per head (at 2004 values) £446 thousand £987 thousand Annual Gross Income @ £322/week (2006 median) £553 thousand £1,222 thousand WOOD WASTE ARISINGS Chapter 3 analyses the best available information on wood waste arisings in the region. These may be categorised as municipal, commercial and industrial (C&I), construction and demolition (C&D), agricultural and arboricultural waste wood arisings. Defra municipal waste arisings data for 2005/2006 are available by local authority, waste collection route, material category and waste disposal route. As wood waste is not separated, we supplemented the information provided by interviewing the regional local authorities and the waste management companies involved in municipal collections. The main sources for municipal wood waste are via Household Waste and Recycling Centres (HWRCs) and bulky waste collections. The latest official data for C&I arisings is the Environment Agency’s 2002/2003 C&I Waste Survey data. However, we were able to enhance this data with as yet unpublished Environment Agency data for 2004 C&I waste in the region and the findings from various research reports. The latest available C&D waste data relates to 2004 and was compiled by Capita Symonds, but is available via the Environment Agency’s website. This data was supported by several recent research reports. Agricultural wood waste is mainly old fencing and posts. However, this is mainly used on site and does not actually enter the waste stream. There has been much debate about the volume of arboricultural arisings (tree surgery and forestry wastes) which are available for fuel recovery. ‘Gut feel’ estimates from Northwoods (a regional delivery partner) put the figure at around 100,000 tonnes per annum. However, this figure has not been scientifically supported and such arisings are currently being used on site or elsewhere within local authorities at zero disposal cost. Although there is an argument that Local Authorities could possibly gain positive economic value from their arboricultural arisings, this would not actually be diverting waste from landfill. The table below summarises the best current estimates of wood waste arisings in the region and their disposal routes: Summary of Best Estimates of Wood Waste Arisings in the North East Reprocessed/ Arisings Recovered Landfill Other Municipal 77,000 16% 27,200 49,800 Commercial & Industrial 145,000 31% 39-64,000 81-106,000 Construction & Demolition 246,000 53% 50,000 196,000 Sub-total: 468,000 116-141,200 327-352,000 Arboricultural 100,000 - - 100,000 Agricultural Negligible 568,000 116-141,200 327-352,000 100,000 Source: ESYS Regional Market Assessment for Wood Waste for North East England 5 NORTH EAST WASTE WOOD REPROCESSING Egger (UK) Limited has a panel board manufacturing plant in Hexham. In addition to being one of the largest consumers of waste wood in the region, Egger is itself a major reprocessor. They are the only UK panel board manufacturer with their own full recycling plant. Egger Hexham sources its waste wood via a number of channels: its own wood recycling business, Timberpak based in Leeds; a network of thirteen Wood Collectors/Recyclers (from the M4 corridor to Edinburgh); and a little material is delivered direct to Hexham for reprocessing. A brand new conti-board production line will go live in April 2007. This replaces two older lines and increases the company’s waste wood capacity considerably. One of the major improvements of the new plant will be a fully WID-compliant boiler. This will be fuelled by the plant’s waste materials (bark from roundwood inputs, wood fines and sanding dust) giving them a double benefit of an outlet for their fines and the ability to produce process heat for free.
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