UK Waste Wood for Biomass at a Crossroads, Post 2027 

Hannah: From Argus Media, this is the "Biomass Beat", a podcast focusing on all discussions that affect the biomass industry. I am your host, Hannah Adler, senior reporter on the biomass desk for Argus Media. So, the UK's waste wood biomass sector is approaching a huge turning point as renewables obligation support begins to fall away in 2027. So, what happens to the waste wood market and all the material that currently keeps from landfill if those plants close?

I'm speaking with Richard Coulson, the biomass lead at the Wood Recyclers' Association to unpack the recent oversupply, the pressures facing recyclers and operators, and whether temporary regulatory fixes have made any real difference. And we'll discuss what needs to happen now to stabilize the system and secure its future. So, hi, Richard, thank you for coming on today.

Richard: Oh, it's a pleasure. Hi, Hannah. How are you doing?

Hannah: I'm good. Thank you. And I guess, for those who don't know, do you want to tell me a little bit about what you do at the WRA?

Richard: Yeah, sure. So, I've been on the board of the WRA for the past 10 years of its pasture. And currently, I lead on its biomass advocacy work. The WRA has been around 25 years. We've got over 125 members now. And we're, basically, inclusive the entire supply chain. So, from the waste producer, through to the recycler, through to the end users, we represent the industry, and try and take and manage our problems with our stakeholders.

Hannah: Nice. So, you're perfectly placed then to discuss this.

Richard: We'll see.

Hannah: I'm sure you are. So, to set the scene, from April 2027, support for biomass plants under the renewables obligation scheme are going to start to end, which could force many of them to close. Could you talk about a little bit about how this might impact the waste wood market in the UK?

Richard: Yeah, sure. Well, perhaps to set the scene first, the scale of the problem, every year, the UK produces around about 4.5 million tonnes of waste wood from the likes of construction, demolition material, commercial industrial materials, and community material. And given all the recycling outlets are fully satisfied for supply, around about two thirds of the material, 3 million tonnes of lower grade, more difficult to recycle material finds a really important second life through energy recovery. It's used as a fuel to produce secure, low-carbon power, and in some cases, heat and power.

So, what we see from next April is the renewables obligation, the RO winds down. Our entire supply chain and indeed our external stakeholders face a big issue where those 3 million tonnes of our domestic waste go to is currently being compliantly managed by assets built out through the renewables obligation. And in essence, with the schemes closure, we're going to have a huge oversupply, and that brings many risks, or it damages the benefits we deliver. In essence, the material could either be landfilled, that's not a positive solution. It could be exported, we could give away our own energy, sovereignty, or energy security. And, you know, I think each week now, we see a problem with fly-tipping in the UK. It won't help that issue that we have.

Hannah: So, it sounds like the UK waste wood biomass sector absorbs pretty much all the material that might otherwise just go to landfill or exports. There's not really any other use for it. So, let's say the support from the government falls away, what would happen to that supply?

Richard: Yeah, so, you know, I think it's important to point out that as an association, we want to drive the cleanest material to recycling and reuse outlets and those facilities are fully supplied. They might be able to use a little bit more if we can improve material segregation, but not 3 million tonnes more. So, if the capacity from waste wood biomass falls away and, you know, at the minute, just to put into context what it's used for, that resource actually produces enough power for 1.5 million UK households, low-carbon secure power. So, our waste wood supply chain, if you think about energy security and how important that is, we're using our own domestic biogenic waste to make our own low-carbon biogenic power. So, you know, a huge benefit.

If the plants drop from the RO, there's a real risk that they will close without future support or transitional support to get to a new business model. And in essence, I think the majority of the fuel would be exported to mainland Europe, and then we'll actually buy back that power through the interconnectors at a higher price and lose the carbon credentials. But perversely, you know, this comes at a time when our country has got, you know, a really ambitious, tough carbon reduction trajectory to meet, and we're going to do that for more intermittent renewables, more wind and solar. So, it's really important we've got that reliable, low-carbon base, low power to keep the lights on during periods of low wind and no sun.

Hannah: Yeah, for sure. And it sounds like, yeah, I mean, that figure you said earlier, the millions of tonnes of waste wood that is in the UK, that is a huge amount to have to place elsewhere, exports. And I think, I mean, recently, there's been a very large oversupply of waste wood in the UK. I know previously in the year you've reported on it and we've seen it. What are the main factors driving that oversupply? Are they sort of structural, or are they just temporary?

Richard: Yeah, I mean, 2025 was a really, really tough year for our sector, Hannah. And there is light at the end of the tunnel now. It might be easy just to quickly look at the waste wood supply chain dynamics and how they normally how they should work. And so, the UK waste wood market, it's regional and it's seasonal, but annually, it's balanced. So, annually, supply equals demand. We realize that people, we make the waste. So, the majority of the waste is in the likes of the Southeast or major cities where people are. And in respect to seasonality, we generally see an oversupply in the summer because construction industry is busier and the tips are open for longer. But the end users, that's when they take their time for planned outages to do their annual maintenance.

So, the supply chain builds stock in the summer, and then in the winter it's the counter, the off takers are really, really busy and availability is lower. So, annually, it balances out. Last year was really, really tough. So, from March last year, one of the larger plants in the Southeast went off line, an unplanned outage, quite a long one. And that was just a reoccurring issue all the way through the year, right up until Christmas time. And it was from the very north, Scotland to the very south, so it infected the entire country. But as I said, on a positive note, it does seem to be that the situation is easing now. And it's going to be interesting to see if producers can run down their stocks now to handle the summer.

Hannah: And you, the WRA, you successfully lobbied for the environment agency to introduce two regulations. It was the RPS 352 and then the RPS 361. And that eased the storage requirements last year because there was some issue, wasn't there, about not having the flexibility to store the oversupply. Correct me if I'm wrong, that was my understanding. How much...

Richard: Yeah. So, it was a really fantastic piece of work between the WRA's technical lead and team with the environment agency. And it did help some of our members manage their businesses safely and compliantly. You know, the WRA is really, really proud. We were one of the first material sector streams going back six, seven years ago to launch our FPP, Fire Prevention Plan. And then, you know, this piece of work just basically showed real collaboration between the environment agency and the WRA team to deliver a flexible and responsive approach to dealing with regulation to deal with this issue. And I think it's important to recognise SIPA, and again, who listened to our industry and delivered a practical and supportive response to dealing with the challenge. So, just a great piece of collaborative work, and I hope that we can make more use of it in the future.

Hannah: How much relief did the regulation measures provide, or is it too soon to tell them?

Richard: I mean, ultimately, I think last year some wood went to landfill. A lot more wood would have gone to landfill without this piece of work, so it's good. I think the regulator appreciated the investment our sector's made over the past 5, 10 years to deliver really safe, compliant operations. We've invested in the technology and the equipment actually to deal with these increased stock levels, and we've proven it's worked actually. The proof's in the pudding.

Hannah: Yeah. I remember last year there was talk that with this oversupply, some operators who had this excess waste wood wanted to export. Did they end up exporting, or did these measures sort of come in time to help the storage flexibility?

Richard: I think there were some additional exports last year. It's too early to tell. We haven't launched our stats yet for last year. We're still collecting them. But I know one of the problems was the European market, a lot of that's for the heating market, the winter heating market. Europe came out of 2024 into spring 2025 with high stocks anyway. So, you know, I think it was a marginal increase in exports, but not sufficient.

Hannah: Yeah, I know...

Richard: We want to make use of our domestic material here. So, exports of valve, I'm not sure whether the valve was sufficiently big this season.

Hannah: Yeah. Well, this is what's interesting, because if you export the domestic supply into Europe, you know, that's fuel, that... In a time when the UK is trying to sort of double down sort of on its greenhouse gas removal strategy, yeah, it does seem like exporting it and then buying it back is kind of counterintuitive. On that note, how do waste wood biomass plants fit into the UK's wider greenhouse gas removal strategy? And do you think that the policymakers who assess this are underestimating the waste wood sector's role?

Richard: I think they get it. I mean, you know, if you think many institutions, including the Climate Change Committee, have acknowledged, you know, they recognize that if we're to meet our carbon reduction targets, then BECCS, which is Bioenergy with Carbon Capture and Storage, is going to be essential. So, the UK waste wood assets have the potential to capture up to 3.6 million tonnes of carbon from the waste wood fraction of fuel only. It's actually up to 4.5 million tonnes, if you take into account all the biogenic waste that they burn. And that's 17% of our country's 2035 reduction target, so it is significant.

And, you know, we provide a fast track, viable route to truly negative emissions. And that fact was actually acknowledged in the recent, independent review into greenhouse gas removals, which was published at the end of last year. So, we're just waiting for the government's response on that. And, you know, retrofitting the technology is, obviously, cheaper than you build. So, I believe the civil servants understand, accept, acknowledge what our sector can and could deliver. I just get frustrated with the lack of resource and timeliness about delivering the rest of the policies which we need.

Hannah: Yeah, I mean, in that vein, in your view, with all this sort of frustration on how they responded, what do you think should happen almost immediately to stabilize the waste wood market? And then what do you think needs to happen over, let's say, the next year to ensure the market's future?

Richard: Yes, I mean, looking ahead for the biomass sector, there is a business model out there, it's called the greenhouse gas removals business model. So, our assets could transition from a life under the renewables obligation to BECCS. There's 54 regional facilities. And for the assets to use the greenhouse gas removal business model, they need to be next to one of the carbon clusters. So, there's high net in the Northwest, acre one in Scotland, the Northeast cluster. Only four of the assets are within 10 miles of the cluster. So, the other assets, we need urgent confirmation that non-pipeline transport options will be linked to the greenhouse gas removal business model, and consultation has just been launched on that.

So, we need the bits of the policy confirming now to give us some confidence. And then with that, the early leaders from the renewables obligation will need some sort of transitional support, some type of CFD contract for difference to be able to transition from renewables obligation to BECCS and selling carbon credits here. And it'll be no-cost future operating business model in respect to subsidies. But we need transitional support now to do that.

Hannah: Yeah, the transitional support is definitely what's on everyone's mind at the moment. And BECCS, in your opinion, is the future for the biomass waste wood industry, sorry, for the plants that use it.

Richard: We deliver a lot of good doing what we're doing. Yeah, so base load, secure power, low carbon, the environmental service. I think the way policies go in unabated power generation needs to move to a beta to carbon capture removal. In respect to the transitional support, I think it's becoming fairly obvious that the cost of inaction will actually be greater than the value of support which we need to get to our future operating model.

Hannah: Okay, well, thank you so much. This has been so interesting. Before we conclude and wrap up, I'd like to ask you, what is a myth that you would like to dispel about the wood recycling industry or any part of the work that you do and its role in the biomass sector?

Richard: That's a good question, Hannah. What's a myth?

Hannah: Maybe there isn't a myth.

Richard: Maybe a concern. I think we're recognized because of the size of our assets. We vary from a couple of megawatts to 60 megawatts. That we're not important collectively. I've explained what we deliver, and that needs to be recognized, I think.

Hannah: Yeah. No, to be honest, when I read the figures of how much power, basically, the power the plant supply from waste wood, I was like, it's a lot. Like, it's a lot more than people would think, I think.

Richard: It adds up. It's big numbers. It's 3 million tonnes of compliant waste management. It's 1.4 million homes out of UK homes.

Hannah: Yeah. Well, thank you, Richard, for coming on and sharing all your insights today.

Richard: No, thank you, Hannah. I appreciate the invite. You have a good day.

Hannah: Thank you. You too. Stay tuned for the next edition of the Argus "Biomass Beat" podcast. In the meantime, if you want to learn more about this topic and other factors driving the biomass industry, follow all our coverage in "Argus Biomass Markets Report" and visit us at argusmedia.com.