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The North East's fledgling wood fuel industry has been given a £70,000 boost with a grant from Defra to form North East Wood Fuels (NEWFuels), the first woodfuel producer group in the North East to be funded by Defra.

With support from nearly 100 potential woodfuel consumers and suppliers, the North East's woodland initiative, Northwoods, has secured a Bio-energy Infrastructure Scheme Grant to start a Region-wide producer group of farmers, woodland owners and foresters to supply wood fuel to markets.

It will be the first step in developing an industry which can offer genuine savings on energy bills for the consumer as producing heat from wood fuel can be cheaper than using fossil fuels.

A successful wood fuel industry will also create more local, rural jobs as people switch to wood fuel. In addition to the obvious economic benefits to producers and consumers, it will lead to better woodland management as landowners and foresters find markets for the products of their currently unmanaged woodlands.

There are also huge additional environmental benefits to developing the wood fuel industry as it is a carbon neutral fuel - the carbon stored by a growing tree is released once the tree is used as a fuel. New trees are planted and so the cycle continues.

Neil Harrison, Director of Northwoods said:

"This grant from Defra is extremely welcome as it will enable us to kick start the biomass supply chain in the North East. That means there are a whole range of benefits for the consumer, for businesses and for the environment."

Northwoods is the initial point of contact for anyone who works along the wood supply chain in the North East - from planting trees through to managing and maintaining woodlands, large scale harvesting, arboriculture or end users and processors. It can also provide advice on training and grants available.

Mr Harrison added:

"We are 25 years behind Europe in the development of the wood fuel industry, but there are phenomenal benefits if we can develop it to its potential. Farmers and other land owners often do not realise they have woodland which can be utilised, and so a lot of woodland is being under managed at the moment. This scheme can help them to find new markets for these products by matching growers with consumers."

"We can help a farmer, for example, to create a market for 500 tons of wood chips, so it becomes worth their while to manage their woodland properly."

Northwoods in now conducting a questionnaire with members to establish the shape, remit and operating model of the producer group. The first group meeting will be held in the next few weeks.

Martin Price, Adviser at the Rural Development Service North East said: "NEWFuels is an exciting new development for the North East to develop the supply chain for wood fuel with wide ranging benefits for the environment, the rural economy and communities throughout the region.

The grant will support the producer group with staff costs and the purchase and rental of equipment over the first three years until the group is financially sustainable and able to support its own costs.

The project is an excellent example of sustainable development, which will complement the existing work carried out in the region under the England Rural Development Programme."

* The £3.5m UK-wide Bio-energy Infrastructure Scheme provides grants to farmers, foresters and businesses to help develop the supply chain required to harvest, store, process and supply biomass to heat, combined heat and power, and electricity end-users.

Eligible biomass is short rotation coppice, miscanthus and other grasses, straw and woodfuel. Funding, up to a maximum of £200,000 per applicant, is available over three years for the purchase or rental of specialist machinery, storage and hard-standing; administrative set-up costs for producer groups; and training.

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