Lower fuel bills will make furniture more expensive

BIOMASS SUBSIDIES OPPOSITION

In December 2011, the BFC published a report entitled Biomass Subsidies and their impact on the British Furniture Industry that was commissioned by the Furniture Industry Research Association (FIRA). Biomass energy subsidies were introduced in the UK in 2002 to promote ‘green energy’, but have increased wood prices, by pushing up demand for the material that is widespread in the furniture industry. According to an article by The Furnishing Report, the cost of timber has risen by 55% over the past 5 years. The BFC and FIRA report argues that timber market is being distorted and that UK furniture manufacturing jobs are under threat, as a result of the Renewables Obligation Woody Biomass Subsidy, which encourages wood burning to create electricity through financial incentives. It also states that a continued rise in furniture production will force manufacturers to increase retail prices. On 12th December 2011, industry leaders united and held a meeting at the House of Lords, calling on the Government to revise the policy.

However, the Government failed to take note. Another press release by the BFC that was published nearly a year later, in September 2012, quoting von der Heyde, who said:

“The Government seems intent on ignoring the negative financial and business impacts on the furniture supply chain created by these subsidies which effectively assist energy producers to out bid manufacturers for a vital raw material resource. There is a danger that this will lead to the collapse of the mainstream British furniture manufacturing base, unless the subsidies are significantly reduced or removed, especially for the burning of newly grown trees.”

He added:

“We are urging The Government to review the situation and to ensure that our industry is not disadvantaged competitively, particularly at a time when imports continue to grow, and exports offer one of the few opportunities for growth.”

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