Wood recyclers are facing an unprecedented rise in costs which many operators will have no choice but to pass on, according to the Wood Recyclers’ Association (WRA).
The WRA says that high prices for diesel and electricity are placing additional costs on businesses already hit by the removal of subsidised red diesel and driver shortages. It also says that longer lead times for new trucks and equipment are having an impact.
While inflationary pressures are affecting all sectors, the WRA says that the wood recycling industry is particularly impacted due to its reliance on heavy machinery, such as shredders, to recycle material into valuable end products, as well as its dependence on haulage which has increased in price.
The WRA says although there are mechanisms in place for some of these expenses to be recouped from waste wood suppliers through index-linked contracts, these are often very limited and do not cover the full scale of the increases.
In the past 18 months, there has been a steady hike in costs to levels which are now unprecedented, placing a huge burden on our members.
Gate fees for recycling waste wood are typically higher in the summer and the WRA is warning that these spiralling costs will apply further upwards pressure.
The WRA has more than 110 member companies representing over 90% of the UK’s wood recyclers and reprocessors.
The WRA says it is now seeking to alert wood suppliers, such as local authorities and waste management companies, to the market pressures so they can prepare for the inevitable changes that are coming.
Executive Director of the WRA, Julia Turner, said: “The cost of reprocessing waste wood has gone through the roof. In the past 18 months, there has been a steady hike in costs to levels which are now unprecedented, placing a huge burden on our members.
“A lot of mobile plants used to run on red diesel but since the sector’s entitlement to use this ended in April, costs to run these machines have rocketed and now we are also seeing record fuel, haulage, and energy prices.”
“We want to raise awareness that it’s tough out there at the moment for our members. They are all being squeezed and many will have no choice but to pass those costs on.
“While this may not be welcome news, the sooner our suppliers understand the pressures, the sooner they can prepare for the inevitable changes and make the market more resilient going forward.”
