(Updated June 2013) The Green Investment Bank (GIB) was set-up to help finance low-carbon projects – but its biggest loan to date has been to Drax coal-fired power station to help them convert half their capacity to biomass and thus avoid having to close down. This is the opposite of low-carbon, as coal and biomass are as bad as each other – and the GIB’s loan allows Drax to keep burning both long-term. There shouldn’t be any public finance for big biomass – not for biomass ‘conversions’ that keep old, polluting coal power stations running and not for biomass power stations which burn vast amounts of wood from trees cut down overseas. Take action here!
- NOTE: The Department for Business, Innovations and Skills has asked us to publish their response to our campaign. Please click here to download a copy and read Biofuelwatch’s comments. -
What is the Green Investment Bank?
The Green Investment Bank was created by the UK government in 2012 to help finance so-called environmentally friendly projects. It is based in London and Edinburgh. GIB is allowed to receive and distribute state funds, so long as it channels them towards certain things. So far it has been given a budget of £3 billion. GIB was created with the intention of meeting carbon emission reduction targets and to accelerate the development of a “green economy.” Yet its first large loan – for £100 million – went to Drax, to help them convert half their units to biomass and avoiding being shut down under an EU Directive.
Investing in false solutions
In December 2012 GIB agreed to grant Drax Plc (Europe’s 2nd biggest coal power station) a £100 million loan to convert from a coal fired power station to one that primarily burns biomass. Secretary of State Vince Cable has since confirmed that without the loan, and without partly converting to biomass, Drax “would have closed down because it has to meet European rules on coal use and it wouldn’t have been able to survive“. This means that the GIB loan has supported large-scale coal as well as biomass burning. We estimate that GIB will grant a further £500 million to biomass and biofuel projects in the next few years. This raises major environmental and social concerns. There are indication that the next big GIB biomass investment could go to Forth Energy for building a large biomass power station in Grangemouth which would burn 1.5 million tonnes of imported wood.
But isn’t big biomass clean, renewable energy?
Unfortunately not, it’s actually hugely destructive and very high carbon as well as being very polluting. When we look at the full picture, we find that biomass is not the green energy solution some companies and governments would have us believe it is.
Big Biomass is a climate disaster too
Cutting down and burning trees for electricity is no better than burning coal. Burning biomass in power stations emits up to 50% more carbon dioxide than burning coal (for the same energy output). The industry says that new trees will absorb that carbon again – but it takes minutes to burn a tree and many decades for another one to grow. Turning biodiverse forests into tree plantations for power stations also releases vast amounts of carbon.
Big Biomass fuels destruction of the natural environment
Converting half of Drax to biomass will require around 1.6 times as much wood as the UK produces, so they would have to import at least 90% of this. Native forests, rich in wildlife and carbon, are already being logged and destroyed in the U.S and Canada to meet growing biomass demands. A recent BBC investigation found that some of the pellets burnt by Drax come from trees from ancient swamp forests in the southern US which are being clearcut. Those pellets are certified by one of the voluntary certification schemes endorsed by Drax and the UK Government – an example of where biomass called ‘sustainable’ can come from.
Big Biomass goes hand-in-hand with human rights abuses
The GIB and government subsidies (paid for by the bill payer) are making biomass a hugely profitable industry. Because there are few restrictions on where wood can be sourced from, companies often go for the cheapest supplies of wood. Forth Energy, whose proposed biomass power station in Grangemouth is being considered for funding for the GIB right now, stated at a Public Local Inquiry that they were looking at burning fast-growing eucalyptus from Brazil. In Brazil and many other countries, eucalyptus plantations are responsible for the displacement of local communities, human rights abuses, the destruction of biodiverse and carbon rich forests and grasslands, the pollution and depletion of freshwater and soil.
Participate in our alert here to tell the Green Bank Chairperson Lord Smith not to fund Forth Energy’s Grangemouth power station, nor any other big biomass projects! Download our Banking on Biomass flyers here: