1. Putting it all together: Policy directions Cameron Maxwell, Business Development, FCS FEG Autumn Symposium, 8 September 2011

2. Policy directions 2 Forestry is always looking for a White Knight

3. Policy directions 3

4. SG policy The Scottish Government would prefer to see biomass deployed in heat-only or combined heat and power schemes, off gas-grid, at a scale appropriate to make best use of both the available heat, and of local supply. Policy directions 4

5. Rationale Heat is 50% of total energy demand Make most efficient use of a finite resource Biomass key to delivering 11% renewable heat target can make a minor contribution to electricity baseload off gas-grid ensures highest carbon savings promote development of decentralised energy generation. Policy directions 5

6. Balanced approach Timber processing industries: low carbon products for construction etc contribution to economic development New income stream for forest industries Better returns for growers Development of supply chain More woodland management Encourage investment in new woodland Heat – more incremental increase in demand Local use Policy directions 6

7. Resource Softwood production - 6.3m green tonnes Sawmills Wood panel Paper and paperboard Wood fuel - 1.6m green tonnes (40% recycled) Production Forecast, 7.3m green tonnes in 2020 UK 9.8m gt (2010), 11.8m gt (2020) Policy directions 7

8. 8 Biomass demand Forestry Commission Scotland: Wood Fuel Demand and Usage Update Report 2009. Hudson Consulting (www.forestry.gov.uk/scotland)www.forestry.gov.uk/scotland

9. Policy directions 9 Availability WFTF update report published in March 2011 Potential available resource 0.8m green tonnes in 2010-11, 2.4m green tonnes in 2017-21 Increased harvest, forest residues, recycled wood Renewable heat 2.8% (biomass 90%) Additional 1m green tonnes in heat only plants would deliver additional 3% renewable heat

10. Imports May be a significant role for imported biomass But global market is immature and likely to be volatile Use dependant on: price, availability and evidence of sustainability Use should support maximum heat use and de-centralised energy production. Policy directions 10

11. Going forward Renewable Obligation Banding Review Review support for biomass to align with policy Analysis: Best use of wood fibre and wood fuel Future wood fuel demand Likely impact of the Renewable Heat Incentive Proposals in planning Energy forestry Policy directions 11

12. UK Government policy Renewables Road Map Significant role for biomass electricity Enhanced co-firing, conversion, dedicated biomass ROC Banding Review Bioenergy Strategy/Bioenergy Review Policy directions 12

13. UK ambition (m odt) Policy directions 13 + 5m odt for the renewable heat target

14. Demand for UK fibre (m odt) Policy directions 14

15. UK biomass inputs Policy directions 15

16. Global resource Policy directions 16

17. Timber development Green credentials Renewable Carbon substitution Carbon storage Incentivisation Promotion, Education R & D, new products, systems, Building regulations, embodied carbon.

18. Concerns/conclusions Scale of demand Tilbury, Drax Pellet plants Georgia, USA – 1m tonnes Russia – 2-3m tonnes Canada – 2m tonnes Electricity generators will go for most accessible material first Ability to pay DECC: 5-15% price increase to 2020 Wood will travel Policy directions 18

19. Policy directions 19