THE forestry sector is at risk of collapse as rising fuel costs and lack of support become increasingly unsustainable. 

That's the view of the Forestry Contracting Association (FCA), which says the current situation is hitting the industry even harder than the oil crises of the 1970s and will force workers across the country onto the breadline. 

Rising prices and the impending change to red diesel's rebated tax status are being widely felt, FCA England chair Simon Bowes said, as he warned even long-term contracts are beginning to "cost people money". 

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He said: "An already marginally profitable sector in forestry, a key sector, is under serious threat of collapse.

Forestry Journal: Russia's illegal invasion of Ukraine is one of the reasons behind rising prices Russia's illegal invasion of Ukraine is one of the reasons behind rising prices

"Work priced going forward is not now viable, long-term contracts are now guaranteed to cost money to complete, with the outcome likely to be bankruptcy for the contractor." 

Costs have risen rapidly in recent weeks, with red diesel going for close to £1.30/litre, down from a high this month of around £1.50/litre but up from just 72p/litre at the turn of the year. 

Comparing the current situation to the 1970s – where multiple energy crises saw fuel costs soar and stocks of petrol diminish – Simon added: "The recent fuel price rises are unprecedented. There has never been anything so severe or so rapid as the rises in fuel prices we have seen in the last few weeks or, sometimes, days.

Forestry Journal: Red diesel costs have begun to drop slightly in recent days (https://www.boilerjuice.com/red-diesel-prices/)Red diesel costs have begun to drop slightly in recent days (https://www.boilerjuice.com/red-diesel-prices/)

"We’ve all regretted not filling up in the morning as that tank of fuel we should have bought at 7 am has gone up by five, six or even seven quid by 7 pm." 

It had been hoped Chancellor Rishi Sunak would delay the impending change to red diesel next month during the Spring Statement, but it's still due to go ahead as planned on April 1. While some parts of the forestry industry will remain exempt, others will be hit in the pocket, with the 5p reduction in fuel duty only likely to lead to a 1p/litre drop in its price.

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Simon added: "The rise of pump prices for diesel have been harsh enough and have hit hauliers in particular but it’s the incredible rise in red diesel prices that is threatening the very existence of the harvesting sector in particular.

"Whether you blame the war in Ukraine, the pandemic, Brexit, the shift away from rebated diesel in some sectors or profiteering, the effects have been stark."