The wood waste industry is in turmoil at the moment but why?
Like many of the challenges faced for businesses over the past 18 months or so not everything has a single route cause, some could say Brexit, or COVID or even a tanker blocking a major trade route, these issues singularly have a major impact on global business but when they happen in unison it can create the perfect storm for a very stormy business environment.
Since the UK public has not been in a position to travel on foreign holidays (or travel freely around the UK even until lately), or go out for meals and drinks with friends and family many have focussed on their homes. Spending on DIY projects and home improvements, new kitchens, bathrooms, carpets and so on has caused an unforeseen surge in the amount of domestic waste being created, even garden projects and building work have had their impact on the additional generation of wood waste in the market. The route cause of a spike in disposal demand on its own, and coupled with a year of no bonfires which were also cancelled due to COVID restrictions and a huge reduction in workforce capacity with many employed in the waste sector being on the government furlough scheme has had a devastating effect on the wood recycling businesses across the UK.
The net result has been a significant backlog in a majority of facilities as the seasonal trend line of a winter drop off have quite literally never happened. In any ‘normal’ year this drop off of inbound material allows the sites to empty from the prior summer spike. The net impact of these items is that gate fees for disposing of waste wood have risen sharply given the market went into a typical summer full as opposed to the normally available capacity. Wood is now travelling much further to find those sites with capacity and prices have risen for gate fees unseen in recent years, some sites now charging in excess of £70.00 per tonne.
In terms of end-users, a number of these are also full, typically power plants also take their outages in the summer due to lower heat and reduced energy prices. Panelboard mills have also been busy supplying the construction sector, but they can only consume what they typically consume, not the additional surge in wood volumes from this unexpected UK economy spike.
Wood recyclers across the UK, have even closed their gates completely until they generate space, some are taking contracted supply only, and others are working on reduced quotas. The Environment Agency is also heavily policing the industry to eliminate and reduce risk to the environment from the excess waste volumes, sadly fly-tipping instances have risen across the UK, maybe as a direct consequence of reduced disposal routes and increased costs.
It is difficult to actually get over the size of this issue and when we can expect it to be back under control but we can say with confidence is that the situation we expect to get worse before it gets better.