'Fresh Approach' Needed Over Feedstock Supply Chains

A "fresh approach" to managing feedstock supply chains is needed if the UK biomass sector is to continue to grow, while meeting new sustainability and reporting criteria introduced in April, according to Stuart Campbell, director at Savills Energy.

Mr Campbell made the comments last week while addressing the All-Energy Conference in Aberdeen.

He said that understanding the implications and security of the widening supply chain would be "fundamental to the continued development of viable biomass projects in the UK going forward."

Mr Campbell explained: "All generating plants with an output of 1MW and above using solid biomass now have to submit an annual independent audit report which assesses compliance against strict sustainability criteria.


"The greenhouse gas (GHG) lifestyle criteria ensure that biomass delivers savings against fossil fuel while the land use criteria specify that forests are managed sustainably. However, with greater emphasis on the sustainability of feedstock, the supply chain is coming under increasing scrutiny."

Research commissioned by the Department of Energy and Climate Change (DECC) in the summer of 2013 found that the UK power sector would need 23 million tonnes of feedstock by 2020.

"Despite the potential impact of a feedstock failure, traditional business interruption insurance does not cover many of the risks a biomass supply chain may face," Mr Campbell said. "This issue has become more acute as heat off-take and the consequential contractual obligations have become more relevant.

"Ultimately, pre-empting and managing the financial implications of feedstock supply chain failure better and more proactively will act as a catalyst to unlock the potential in new and existing bioenergy projects, thus supporting the UK's obligations under the Renewable Energy Directive and opening up opportunities for job creation and economic growth."

(IT/JP)