Impacts of the sale of house coal and the most polluting manufactured solid fuels: report

Appendix 1 Transcript of interview with Solid Fuels Scotland

• What is the profile of the solid fuel supply sector in Scotland?
  • For example, what is the number and size (Number of employees) of companies, and where are they located? Are there different types of businesses serving different areas/ communities- e.g. those that supply urban areas vs. more remote communities?
  • What types of fuels are sold by these suppliers?

In England and Wales Solid Fuels Association members join on how much they sell, however in Scotland there are just 2 categories of members, high sales and low sales.

No information on what fuels suppliers sell is available. All suppliers sell coal and smokeless fuels and so are ready for the transition.

In England, the transition from coal to smokeless fuels was straightforward- might be more difficult in Scotland as more rural/remote homes. In terms of remote area suppliers, only island of Orkney suppliers are members of Solid Fuels.

In terms of UK solid fuel suppliers, 4/5 suppliers are based in England, 1/5 split between Wales and Scotland. As English suppliers will stop selling coal fully in 2023, (Grace period of UK ban ends), this could lead to increased costs.

• Do you have information on the prices of different fuels in Scotland?

Since the England coal ban, coal price has increased. Coal used to be cheaper than smokeless fuel (although smokeless fuel lasts longer/is more efficient so this balanced out for consumers). Smokeless fuel however is now cheaper than coal. It is hard to get consumers to swap who are set in their ways however.

• What would be the impact of a ban of coal and higher sulphur manufactured fuels, and potential reduced sales of wet wood, in terms of:
  • Ability to sell alternative fuels- Are they already sold, and if not, will it be possible to switch?
  • What are the costs of shifting sales to these alternative fuels, e.g. impacts on profitability?
  • What would be the impacts on supply chains of the ban- Would some go out of business? Would there be lost employment? Would this affect suppliers in certain locations more?
  • Any other increased costs?

More remote suppliers will be more impacted as coal will be a higher proportion of their sales, also will be smaller/more vulnerable companies potentially. In cities/ populated areas, smokeless fuels will already be the majority of sales so small impacts of the policy.

England banned coal 2021 in outlets, only approved sellers could sell 2022-2023 before full ban

Coal is imported, smokeless fuels domestically produced (With imported raw materials). Hard to say if significant difference in profitability for suppliers between the two types of fuel.

The ban shouldn't put companies out of business, but lots of merchants are older and resistant to change.

Industry backs low sulphur fuels. High sulphur fuels do tend to be slightly cheaper- which could have been a benefit regarding the energy crisis.

High sulphur comes from the pet coke raw material in the fuel- high sulphur pet coke used to be much cheaper than low sulphur. However, the UK/ England policy reduced demand for high sulphur fuels and so increased cost.

Wood is a very different supply network, more informal supply which will often be wet. Formal Merchants already selling dry wood/ready to burn from main suppliers who kiln dry to supply England.

• What are the supply chains of these fuels, are any reliant on international imports?

Content of manufactured fuel comes from abroad (pet coke, anthracite). Electricity costs to make the fuels have gone up.

3 main fuel manufacturers in England, 1 in Ireland.

Coal is imported fully.

Other questions

Solid fuels consumers buy fuel in advance and therefore know the cost of their energy in advance. Compared to Gas and electricity which is harder to budget.

Some appliances can only run on coal i.e. not smokeless fuels (boilers). Scotland has more boilers than England, using solid fuel for whole house i.e. not as a secondary heating source.

Scotland remote areas don't have gas and so reliant on solid fuels.

Solid fuels association already did information campaign on smokeless fuels and their benefits- winter 2021, hired PR company, leaflets, tv interviews etc. Defra contributed/funded.

In England- any wood under 2 cubic metres has to be classed as "ready to burn" <20% moisture, usually kiln dried

Sales of wood have increased.