In July 2013, the UK government announced an infrastructure loan guarantee scheme for energy, road and rail projects, with the declared aim of boosting economic growth. Under the UK Guarantee Scheme, private companies are guaranteed that, if anything goes wrong with their investment which causes them to default on loans to a bank or another lender, the government will pay back those loans for them, out of general taxation. In other words, tax payers carry the risk of private investments.
Energy companies have been at the forefront of applying for such guarantees. The Government unit responsible for infrastrucutre support – Infrastructure UK (part of the Treasury) – does not even try to greenwash their decisions with terms such as ‘sustainable’ or ‘low carbon’ on their website. So far, their only infrastructure loan guarantee has gone to Drax, to allow them to stay open and keep burning coal as well as increasing amounts of imported wood pellets. There is strong evidence linking Drax’s pellet imports to the destruction of highly biodiverse and carbon rich wetland forests in the southern US.
Now, the government has announced a list of 17 projects that have ‘prequalified’ for loan guarantees – 10 of them energy projects. Those include three large biomass electricity schemes, posing a serious threat to forests and communities. Other energy projects listed include underground coal gasification, nuclear power and waste incineration. The three biomass electricity schemes which may be underwritten by the government are:
- The proposed conversion of the 2000 MW Eggborough coal power station to biomass: Without conversion to biomass, this power station, like Drax, would likely have to close in the near future. China General Nuclear Power Group is reportedly bidding to acquire the plant in order to convert it to wood pellets. Just like Drax, Eggborough would burn pellets made from up to almost 16 million tonnes of wood from slow-growing trees, most likely from North America. This is more than one and a half times as much as all the wood produced in the UK every year! Converting Eggborough to biomass would significantly increase pressures on remaining natural, biodiverse forests in the southern US and Canada.
- A 100 MW biomass power station proposed by Helius Energy in Avonmouth near Bristol: This would burn around one million tonnes of imported wood. Helius Energy have not announced any supply agreements yet so they could be sourcing wood from anywhere in the world. There is a strong chance that they will be looking for wood from fast growing eucalyptus and other tree plantations in the tropics. See here for a case study eucalyptus plantations for biomass exports to Europe in Maranhão, Brazil which is threatening the livelihoods and lands of traditional communities and the rich biodiversity of Cerrado forests;
- A 60 MW biomass and waste power station proposed by Tilbury Green Power in Tilbury: The company has permission to burn virgin wood (likely imported), chemically treated waste wood, municipal waste and commercial and industrial waste. As well as threatening forests (by planing to burn 300,000 tonnes of virgin wood a year), the power station would emit a particularly large number of different pollutants, threatening the health of a community that has long been exposed to high levels of industrial and traffic pollution.
Please tell the Government that they must not offer loan guarantees to those destructive biomass schemes! Your letter will be automatically sent to the UK Treasury. If you can personalise your message, it may have greater impact. Many thanks!
UPDATE: See here for a response sent by the Treasury to an MP – and for what’s wrong with it.