Support for Fuel Provision

A.3 There are four broad types of biomass fuel: forestry materials, where the fuel is a by-product of other forestry activities; energy crops, such as short-rotation coppice (SRC) and miscanthus, where the crop is grown specifically for energy generation purposes; agricultural residues, such as straw or chicken litter; and imported biomass, for use in co-firing. There is currently no support for imported biomass for co-firing although there may be for the energy generated from it (paragraph A.14).

A.4 The Biomass Infrastructure Scheme (presently worth £3.5m and awaiting state-aid approval from the European Commission) is intended to help develop the supply chain (and market infrastructure) for woodfuel (forestry materials and energy crops) and straw for energy use. The Scheme is intended to bridge the current gap between fuel-growers and energy end- users.

A.5 The Woodland Grant Scheme (WGS) is part of the England Rural Development Programme (ERDP), in Scotland there is the Scottish Forestry Grants Scheme (SFGS). The schemes provide grants for managing existing woodland and for planting new woodland, as a result of which forestry material may be made available for energy use. The WGS is worth £139 million over the seven years from 2000 to 2006. The Farm Woodland Premium Scheme, also part of the ERDP and only available in conjunction with the WGS, provides annual payments to farmers to compensate for agricultural income foregone as a result of forest planting. This scheme is worth £77 million over the same seven-year period.

A.6 The Energy Crops Scheme provides grants of between £920 and £1600 per hectare (depending on the crop and former land-use) and is worth £29m over 2000-2006, to support the establishment of energy crops, provided that growers have a contract for the energy end-use for their crop, and they adhere to certain conditions. In addition, grants of up to 50% of costs are available for setting up and operating Willow SRC (not other energy crops) producer groups, and to help with the purchase of planting and harvesting machinery to be held in common for the group.

A.7 The EU Common Agricultural Policy (CAP) provides two kinds of support for energy crops. Energy crops may be grown on set-aside land, and on non-set-aside agricultural land they may receive a grant under the CAP of €45 per hectare (though this is reduced pro rata if the total qualifying acreage in the EU exceeds 1.5m hectares).

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