Overcoming investors’ blindspot on biomass
WHY IS BIOMASS AN INVESTOR BLINDSPOT?
Our report on biomass for investors highlights the biomass power sector’s impact on climate change and its associated financial and reputational risks. We provide recommendations to support investors and banks engaging with the sector.
Why this is important and what we’re doing about it
Biomass deserves greater attention from investors
Biomass has been incorrectly treated as a renewable resource by policy-makers in the EU and the UK and has therefore received the same subsidy support as solar and wind energy projects. This has contributed to the enormous growth of the biomass power generation industry and wood pellet imports, particularly in the UK.
This is a deeply worrying trend given the negative climate impacts of large-scale biomass power. The carbon emissions from burning biomass are greater than those of coal, and it takes decades for these emissions to be sequestered as forests regrow. Given that we have very limited time to bend the curve on global GHG emissions and achieve zero emissions by 2050, biomass power generation is not compatible with climate security. It therefore should not be considered a climate solution or receive subsidy support.
This topic has received relatively little attention from investors compared to the climate issues surrounding the generation of power from coal power stations. However, biomass urgently deserves greater attention because the climate impacts can be more significant than for coal and financing of new biomass infrastructure would lock in future carbon emissions, which must be avoided.
Based on our research we recommend:
- Investors and banks should not provide financial support for new biomass power infrastructure;
- Greater engagement is needed with existing biomass power operators and supply chains to adopt and enforce very strict criteria; and
- Biomass should not reduce or deflect funding away from solar or wind energy projects.
Feedback to EU Taxonomy criteria on climate change adaptation & mitigation
The EU Taxonomy has been hailed globally as a milestone in creating the much-needed tools for financing the transition to a low-carbon economy. For this tool to effectively facilitate reaching the EU emission reduction targets and commitments under the European Climate Law to meet climate-neutrality by 2050, it needs to fully endorse the ambition of the Technical Expert Group’s (TEG) recommendations, if not going even further.
Our key recommendations concern the following areas:
– Maintain the proposed climate change mitigation criteria for electricity generation of 100g CO2/kWh to effectively exclude natural gas without abatement (CCSU)
– Exclude the burning of all forest biomass for energy as well as reverse the inclusion of all bioenergy feedstocks with higher lifecycle emissions compared to fossil-fuels
– Explicitly exclude hydrogen produced with non-renewable power
– Reconsider the inclusion of activities such as short-term forestry rotation, livestock and small hydropower
– The inclusion of sea and coastal water transport should be conditional on the examination by the Platform on Sustainable Finance
– Exclude the burning of refuse-derived fuel (RDF) in cement plants, as recommended by the TEG
We have also supported a civil society joint-statement on the draft Delegated Acts, which is available here.
Policy Briefing on the Impact of Biomass on Climate
The Biomass Blind Spot
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