Agriculture Minister Phil Gawne says his department is trying to tackle the problem of how much its wood costs.
The minister faced criticism from James Hampton of Brabbag Fuels, who said he was forced to import UK timber because the Department of Agriculture, Fisheries and Forestry charged too much.
But Mr Gawne says an agreement has now been reached where DAFF will supply Manx timber to the biomass company.
He says the forestry division has had problems trying to balance the books in the past.
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