Moy Park won’t bail out RHI scheme

Moy Park will not provide financial assistance to its farmer suppliers to run biomass boilers following the latest cuts to Renewable Heat Incentive (RHI) tariffs, a senior figure from the poultry processor has said.

“Moy Park is not going to bail out a failed government scheme,” the company’s agri-business and live production services director, Justin Coleman, told MPs in Westminster on Wednesday.

Speaking at the NI Affairs Committee, Coleman suggested that poultry producers who already have LPG (gas) boilers as a back-up to biomass installations could use them to heat houses once biomass becomes unfeasible under the RHI tariffs.

He added that for farmers who only have biomass boilers installed, Moy Park provides a subsidy to cover 95% of the cost of LPG boilers.

“The challenge with this is that there are going to be a number of growers who will be severely impacted financially by [biomass] boilers, which will either become redundant or will be too expensive to run,” Coleman said. “It’s devastating for our business, it’s even more devastating for those 600 small family businesses (Moy Park suppliers) who signed up in good faith to a government scheme.”

Competitive

The main issue raised during the first session of the committee’s inquiry into RHI tariff cuts was that renewable heat schemes in both Britain and the Republic of Ireland (ROI) are more lucrative, leaving NI poultry producers at competitive disadvantage.

The committee heard that RHI in Britain can deliver an annual payment of around £18,000/boiler and the new scheme in ROI could potentially deliver up to €39,000 (£33,750)/boiler. The latest cuts to RHI tariffs in NI have reduced annual payments from around £13,000 to £2,000 for most boilers.

The Department for the Economy (DfE) have maintained that the cuts bring the scheme into line with EU state aid rules, however the heat schemes in Britain and ROI are subject to the same rules.

“NI certainly seems to be right at the back of the queue in terms of how the application and interpretation of state aid has been decided,” Coleman suggested.

Allowances

The committee heard that when calculating RHI tariffs, DfE had an allowance of around £30,000 for the capital cost of a biomass boiler.

However, Coleman pointed out that this does not include costs associated with other essential infrastructure.

“ROI was very generous in that it funded concrete, it funded the boiler house, tanks and all the ancillary stuff to make the boiler operational,” he said.

Coleman told MPs that he ultimately wants to see RHI tariffs in NI at the same level as the scheme in Britain.

“It’s a really difficult time for both growers and Moy Park for making long-term decisions, if this is not rectified,” he said.