Waste wood sector faces long-term challenges
Waste wood industry experts have predicted that the waste wood sector is set to face a long and difficult recovery from the Covid-19 pandemic.
At a Wood Recyclers’ Association (WRA) webinar organised with the Charted Institution of Wastes Management (CIWM) held last Wednesday (3 June), waste wood experts met to discuss the market trajectory for the sector post-Covid and the imminent challenges following the pandemic.
The coronavirus outbreak has caused significant disruption in the waste wood sector; within ten days of lockdown there was a 80 to 90 per cent reduction in inbound waste wood onto recyclers’ sites in the UK. The stringent requirements for placing waste wood on the market in the UK, the progressive shutdown of UK plants in April and the impact of the closure of Household Waste and Recycling Centres (HWRCs) affecting the volumes of available waste wood for feedstocks have put an unprecedented strain on the sector.
Although the situation appears to be improving now — with the majority seeing feedstock levels returning to 50 per cent or more — experts claim it will be a “slow return to normality” as the long-term impact of the coronavirus pandemic could extend beyond 12 months to a few years.
Vicki Hughes of Enva Wood Recycling, Mark Hayton of panel board specialists Egger UK and Richard Coulson from energy supplier RWE and Deputy Chair of the WRA all spoke at the webinar.
Hughes said: “If we look at the two potential scenarios for the sector over the next 12-18 months, we think possibly the best case will be a shortage of just less than 400,000 tonnes of waste wood. However, in the worst case this could be significantly higher.”
Hayton commented that the impact of Covid-19 on the panel board industry was the biggest in its history, with order books collapsing overnight.
The mixture of housebuilding output in March being 6.4 per cent lower than in February and 10.8 per cent lower than in 2019, together with retail sales of construction products falling by a record 18.1 per cent has had a massive impact on panel board requirements.
Hayton said: “Although the industry gained orders from the building of the Nightingale Hospitals during lockdown, and, unfortunately, an increase in demand for panel board from the funeral sector, it will be a slow return to normality for the industry and sales orders are expected to be low for several months yet.”
Coulson said Covid-19 had resulted in normal contractual supply to biomass plants being 60 per cent lower at the start of April than usual, although there were big variations between suppliers and some were significantly lower.
He said some plants had cancelled planned outages due to European specialists being unable to travel and instead ran at a reduced load. Others that were short of fuel had been forced to switch off, and some had managed to change the fuel mix and imported both virgin and waste wood.
“The next 12 months are critical,” said Coulson. “If there is a second peak of Covid-19 or a recession, the reduced economic activity could result in the impact on our sector being felt for another two years or more.”
Commenting on the European market, Lauma Kazuša of Suez Trading Europe said: “Agility and flexibility is required to maximise the benefits from the immediate market gaps and the short/mid term market trends, and minimise risks caused by uncertainty”.
You can read more about the waste wood sector on the WRA’s website.