BANKS DODGY DEALS CAMPAIGNS
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Home › Campaigns › Banks and Nature ›
Campaign

Banks and biomass

Contact:

nature@banktrack.org

Photo: Wikimedia Commons
Contact:

nature@banktrack.org

Why this campaign?

Biomass is widely considered a renewable energy and supply and demand for woody biomass is expected to increase over 250% in the next decade. However, woody biomass is anything but carbon neutral and ecologically sustainable. In fact, biomass combustion burns more CO2 per unit of energy than fossil fuels, further fueling climate change. In order to stop this harmful practice, banks must recognise that woody biomass is not a sustainable energy source and exclude the financing of biomass projects.

As it is considered relatively cheap, wood -particularly wood pellets - are now the dominant form of biomass used in energy generation which is devastating irreplaceable forest ecosystems. In addition to deforestation to produce wood for burning, large forested areas are also being burned or cleared to grow crops as biomass. When natural forests are converted to managed forests or plantations, carbon is assumed to be reabsorbed by forest regrowth at the rate needed to offset emissions from burning. However, studies have shown that carbon stored in the forest floor, which is generally twice that stored in vegetation, is greatly reduced when natural forests are converted to plantation forests. Intensified logging regimes for biomass supply often mean shortened rotation periods meaning, so that the forest never goes back to its regains to the former level of carbon stock. And increase in demand for wood pellets is like to be supplied from tropical, temperate, and boreal forests, posing an increasing global threat to natural forest ecosystems, including those that are highly biodiverse or rich in carbon.

The biomass industry is associated with far-reaching social and health impacts, both where forest biomass is harvested and where it is burned, including conflicts over land rights and forest resources. In addition, demand for woody biomass contributes to land grabbing, which threatens the rights, interests, and livelihoods of Indigenous Peoples and local communities. Forests play an important role in protecting local communities from the impacts of climate change and provide numerous ecosystem services, but deforestation causes air pollution and an increased risk of respiratory and other diseases. Biomass production and burning facilities are often located in socioeconomically disadvantaged areas where local communities are particularly vulnerable to the impacts of climate change.

Biomass energy is not carbon neutral. Large amounts of greenhouse gases are released into the atmosphere when forest biomass is burned. It also has negative impacts on the biosequestration of CO2, as deforested areas can no longer store CO2 thus having the same effect as additional CO2 emissions. Measured at the point of combustion in power plants, carbon emissions from burning wood are 3%% higher than from coal. The claim that biomass is a sustainable energy source is based on two false assumptions. First, it assumes that forest biomass will grow back and that the carbon emitted during combustion can be recaptured by regrowing forests. However, this does not consider the time dimension of how long it takes for forests to regrow. Secondly, the EU Renewable Energy Directive's methodology does not include emissions from biomass combustion when calculating full life cycle emissions, which is a fatal flaw. When all carbon emissions are included, studies show that the GHG intensity of biomass from natural timberland can be as much as 4 times that of coal over a 40-year period. Studies show that even bioenergy sourced from burning forest residues results in such a high carbon debt that it cannot contribute to the goal of the Paris Agreement to limit warming to 1.5 or even 2 degrees.

Biomass production is associated with high rates of deforestation as well as monocultures of various crops. There is a growing body of evidence that shows the connection between deforestation and an increasing risk for disease outbreaks and pandemics. For example,monocultures like eucalyptus plantations reduce biodiversity leaving species like rats and mosquitoes, which are more likely to spread dangerous pathogens, to thrive. This biodiversity decline results in a loss of natural disease regulation and poses a risk for human, animal and environmental health. Studies have also shown that viruses are more likely to transfer to humans when they live in disturbed ecosystems like cleared forests. Finally deforestation is also an important driver of climate change which itself increases the risk for future pandemics.

Role of banks

Banks play a role in propping up the forest biomass sector through their finance and investments in companies operating forest biomass power plants, in particular companies looking to convert power plants from coal to biomass. Many banks finance biomass companies or projects as a renewable energy source without differentiating between practices within biomass supply chains and fail to consider the climate impacts that woody biomass has. Large-scale forest biomass causes harm to the climate, environment, people and cannot be considered as a clean energy source and financial institutions investing in the sector could be open to a range of reputational and financial risks. Banks' policies often cite compliance with international sustainability standards to protect and monitor forest carbon stocks in supply chains, such as the Forestry Stewardship Council certification. However, these standards need to be strengthened and banks could play a role in ensuring these standards are improved.

What banks must do

  1. Exclude direct finance for all new wood biomass facilities, including
    • Wood biomass facilities involving energy generation from forest wood, including forest residues and wood from tree plantations and forests
    • Wood biomass facilities reliant on bioenergy with carbon capture and storage technologies (BECCS)
    • Coal power plants that are being converted to wood biomass power plants or co-firing power plants, where coal and wood are burned together
  2. Exclude direct finance for new feedstock supply chains for wood biomass facilities, including
    • Projects harvesting wood for wood pellets or log wood
    • Pellet mills
  3. Engage with existing clients to call on them to put in place an adequate phase-out plan for their existing wood biomass heat and power infrastructure, and feedstock for wood biomass. The bank should publicly report on the results of this engagement and should cease financing companies that do not show progress towards developing such a phase-out plan. 
  4. Identify wood biomass as a high-risk sector and conduct enhanced due diligence on all existing clients operating within the sector that ensures the social, environmental and health impacts of both wood biomass facilities and feedstock supply chains will be halted and remedied. 

Read more in our briefing paper: Burning wood in the name of clean energy? How banks are failing to exclude the harmful wood biomass industry from finance

Dodgy Deals
All
Projects
Companies

Enviva

United States
Company
Target
Biomass Electric Power Generation

Enviva

United States | company

Arauco

Chile
Company
Active
Biomass Electric Power Generation | Pulp, Paper and Paperboard Mills

Arauco

Chile | company

Compañía Manufacturera de Papeles y Cartones (CPMC)

Chile
Company
Active
Pulp, Paper and Paperboard Mills

Compañía Manufacturera de Papeles y Cartones (CPMC)

Chile | company

Drax Group

United Kingdom
Company
Active
Biomass Electric Power Generation

Drax Group

United Kingdom | company

ENGIE

France
Company
Active
Coal Electric Power Generation | ...

ENGIE

France | company

Graanul Invest

Estonia
Company
Active
Biomass Electric Power Generation

Graanul Invest

Estonia | company

Paracel Mill Project

Paraguay
Project
Active
Pulp, Paper and Paperboard Mills | ...

Paracel Mill Project

Paraguay | project

RWE

Germany
Company
Active
Coal Electric Power Generation | ...

RWE

Germany | company

RWE biomass conversion project

Netherlands
Project
Active
Biomass Electric Power Generation

RWE biomass conversion project

Netherlands | project

Vattenfall

Sweden
Company
Active
Biomass Electric Power Generation | ...

Vattenfall

Sweden | company

EDF

France
Company
On record
Nuclear Electric Power Generation | ...

EDF

France | company | on record

Eletrobras

Brazil
Company
On record
Biomass Electric Power Generation | Coal Electric Power Generation | Electric Power Distribution | Hydroelectric Power Generation | Nuclear Electric Power Generation | Solar Electric Power Generation | Wind Electric Power Generation

Eletrobras

Brazil | company | on record

Energa Group

Poland
Company
On record
Coal Electric Power Generation | ...

Energa Group

Poland | company | on record

MGT Teesside biomass power station

United Kingdom
Project
On record
Biomass Electric Power Generation

MGT Teesside biomass power station

United Kingdom | project | on record

Maizuru Palm Oil Power Plant

Japan
Project
On record
Agriculture for Biofuels | Agriculture for Palm Oil | Biomass Electric Power Generation

Maizuru Palm Oil Power Plant

Japan | project | on record

Pego Power Station

Portugal
Project
On record
Biomass Electric Power Generation

Pego Power Station

Portugal | project | on record
Resources
Documents
Videos
Links
2022-09-23 00:00:00

Main findings: Consultations to obtain FPIC in the Paracel Project in Paraguay

NGO document
2022-09-23 00:00:00 | Bank Information Centre and Grupo SUNU de Acción Intercultural
2022-09-23 00:00:00

Paracel pulp mill in Paraguay: A risky project

NGO document
2022-09-23 00:00:00 | Environmental Paper Network, Instituto Maira, Bank Information Center (BIC), AXIAL Naturaleza y Cultura, International Accountability Project (IAP), and Grupo SUNU de Acción Intercultural
2020-07-06 00:00:00

Paper Tiger

Why the EU’s RED II biomass sustainability criteria fail forests and the climate
NGO document
2020-07-06 00:00:00 | Mary S. Booth, PhD; Ben Mitchell, PhD
2021-07-15 00:00:00

Wood pellet damage

How Dutch government subsidies for Estonian biomass aggravate the biodiversity and climate crisis
NGO document
2021-07-15 00:00:00 | SOMO
2022-10-21 00:00:00

Burning forests in the name of clean energy? How banks are failing to exclude the harmful wood biomass industry from finance

BankTrack publication
2022-10-21 00:00:00 | BankTrack
2022-06-23 00:00:00

Conflict Plantations

Chapter 3: Stolen lands and fading forests in Chile
NGO document
2022-06-23 00:00:00 | Environmental Paper Network (EPN)
2021-12-10 00:00:00

Wet Natuurbescherming, RWE Generation NL

Other document
2021-12-10 00:00:00 | Mobilisation for the environment (MOB)
2021-09-27 00:00:00

SIX PROBLEMS WITH BECCS

NGO document
2021-09-27 00:00:00 | Fern
2021-04-12 00:00:00

How bioenergy harms biodiversity: the facts

NGO document
2021-04-12 00:00:00 | Fern
2021-04-12 00:00:00

Open Letter to the Commission Asking for Removal of Forestry and Bioenergy from the Current Climate Taxonomy Delegated Act

NGO document
2021-04-12 00:00:00 | WWF Europe
2021-03-19 00:00:00

A statement by scientists and economists on BECCS from forest biomass

Other document
2021-03-19 00:00:00
2021-03-11 00:00:00

Destruction: certified

NGO document
2021-03-11 00:00:00 | Greenpeace
2021-03-10 00:00:00

Triodos Bank's response to NGO letter about biomass

Bank document
2021-03-10 00:00:00 | Triodos Bank
2021-01-26 00:00:00

The use of woody biomass for energy production in the EU

Other document
2021-01-26 00:00:00 | EU Commission Joint Research Centre
2021-01-19 00:00:00

Biomass Energy, Forests and Climate Library

NGO document
2021-01-19 00:00:00 | Environmental Paper Network
2020-12-21 00:00:00

NGO Joint Statement - Stop Biomass Power Generation with Large-scale Fuel Import

NGO document
2020-12-21 00:00:00 | Friends of the Earth Japan
2020-12-17 00:00:00

Hidden inside a wood pellet

Intensive logging impacts in Estonian and Latvian forests
NGO document
2020-12-17 00:00:00 | Estonian Fund for Nature (ELF) and Latvian Ornithological Society (LOB)

Our message to world leaders: Cut ties with Drax' "Green Energy Scandal"

2022-11-11 10:53:22

Global Markets for Biomass Energy are Devastating U.S. Forests

Mapping the Biomass Industry

The two maps below show the current extent and planned expansion of the biomass industry across the globe. The data on these maps has been collected from openly available sources by EPN member groups worldwide. This is a constant work in progress and the maps are updated regularly as new information becomes available.

Netherlands campaign against new biomass plant

Southeast US wood pellet plants exporting to Europe

News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Real battles take place outside the courtroom

In Dutch
2023-03-14 | Netherlands | BNNVARRA
BankTrack news BankTrack blog Partner news Partner blog

Wood burning - a threat to climate targets

(In German)
2023-03-03 | tagesschau
BankTrack news BankTrack blog Partner news Partner blog

Entire forests are cut down – and yet that wood is called 'sustainable'

2023-03-03 | nrc
BankTrack news BankTrack blog Partner news Partner blog

CO2 capture and storage: 'green' RWE power station in Eemshaven one step closer

2023-02-22 | Dagblad van het Noorden
BankTrack news BankTrack blog Partner news Partner blog

Drax ‘Lobbying Efforts’ Revealed in Internal Treasury Memos

2023-01-24
BankTrack news BankTrack blog Partner news Partner blog

Enviva Statement Regarding the Dutch Parliament’s Motion on Sustainably Sourced Primary Biomass

2023-01-03 | Enviva
BankTrack news BankTrack blog Partner news Partner blog

Australia excludes native forest biomass as a renewable energy

Blog by EPN: In a world leading move, Australia has excluded native forest biomass from eligibility as renewable energy source under the national Renewable Energy Target, and electricity it generates cannot be used to create tradeable Large-scale Generation Certificates.
2022-12-21 | Australia | EPN
BankTrack news BankTrack blog Partner news Partner blog

Whistleblower: Enviva claim of ‘being good for the planet… all nonsense’

2022-12-05 | Mongabay
Blog
BankTrack news BankTrack blog Partner news Partner blog

Time for Barclays to move Beyond Burning

How Barclays finances the burning of fossil fuels, biomass and nature
2022-11-14 | Natasha Ion – BankTrack
BankTrack news BankTrack blog Partner news Partner blog

World’s Largest CO2 Removal Deal Ever Depends on Tech That Isn’t Ready Yet

No one to date has demonstrated a commercial-scale biomass power plant that can capture and bury its emissions deep underground.
2022-10-26 | Bloomberg
Blog
BankTrack news BankTrack blog Partner news Partner blog

Bank financiers of harmful wood biomass have no policies addressing impacts, shows new study

A briefing from BankTrack details impacts of the wood biomass industry and calls on banks to exclude sector from finance
2022-10-21 | BankTrack
BankTrack news BankTrack blog Partner news Partner blog

Drax: UK power station owner cuts down primary forests in Canada

2022-10-03 | BBC Panorama
BankTrack news BankTrack blog Partner news Partner blog

UK accused of funding environmental racism with subsidies to Drax

The power station has paid out millions over alleged overpollution in US south, investigation finds
2022-09-26 | The Guardian
BankTrack news BankTrack blog Partner news Partner blog

Drax accused of driving ‘environmental racism’ after further pollution claims against wood pellet mills in US deep south

Company billed as UK’s ‘largest source of renewable energy’ has now been forced to make settlement payments for air pollution claims against three of its US pellet plants - two of them are sited in poor, majority-Black communities
2022-09-26 | Unearthed
BankTrack news BankTrack blog Partner news Partner blog

Britain's Drax signs deal to sell 2 million U.S. carbon removal credits

2022-09-21 | Reuters
BankTrack news BankTrack blog Partner news Partner blog

Enviva’s proposed Ahoskie expansion would cut many emissions but add greenhouse gases

2022-08-23 | Ahoskie | The News & Observer
BankTrack news BankTrack blog Partner news Partner blog

Drax/Kwarteng: biomass is a bad solution to renewables challenge

The UK should focus on energy that is unequivocally renewable: wind and solar
2022-08-11 | Financial Times
BankTrack news BankTrack blog Partner news Partner blog

Drax expands its operations into Asia

2022-07-14 | Biomass Magazine
BankTrack news BankTrack blog Partner news Partner blog

Drax submits plans to build world’s largest CCS project

Renewable energy company Drax has submitted plans to build the world’s largest carbon capture facility at its North Yorkshire power station.
2022-07-13 | Biomass Magazine
BankTrack news BankTrack blog Partner news Partner blog

Enviva Launches the Enviva Heirs Property Fund to Combat Involuntary Land Loss in U.S. Southeast

2022-07-13 | Enviva
BankTrack news BankTrack blog Partner news Partner blog

Drax takes action to secure UK power supply this winter

Drax will temporarily extend the life of its coal generation assets in response to increased pressure on European gas markets and associated concerns regarding the electricity supply in the U.K. this winter
2022-07-11 | Biomass Magazine
BankTrack news BankTrack blog Partner news Partner blog

EU bank hands out billions to companies complicit in burning fossil fuels

The European Investment Bank (EIB) has pumped billions of euros into polluting fossil fuel companies over the past two years despite talking up its climate credentials, new research by Counter Balance and CEE Bankwatch Network reveals.
2022-06-15 | Counter Balance
Blog
BankTrack news BankTrack blog Partner news Partner blog

Barclays is big on beef and burning

At Barclays AGM campaigners will be calling on the bank to stop financing big meat and burning fossil fuels and forests for energy
2022-05-04 | Hannah Greep – BankTrack
BankTrack news BankTrack blog Partner news Partner blog

Biomass Industry Pushes Back Against Europe’s Plans To Protect Woodlands

Leaked documents show UK power plant Drax is at the heart of lobbying efforts to dilute EU biodiversity rules that could limit its supply of wood.
2022-04-12 | DeSmog
BankTrack news BankTrack blog Partner news Partner blog

BC’s Chief Forester Jumps to Multinational Wood Pellet Corporation

Diane Nicholls takes a senior role in a controversial industry she helped regulate. And promote.
2022-04-07 | The Tyee
Blog
BankTrack news BankTrack blog Partner news Partner blog

Pego power station conversion plans halted

2022-03-13 | BankTrack, Biofuelwatch, Environmental Paper Network, Global Forest Coalition, ZERO
BankTrack news BankTrack blog Partner news Partner blog

Asian Development Bank: Don’t finance dirty biomass!

2021-09-17 | Global Forest Coalition
BankTrack news BankTrack blog Partner news Partner blog

Brazil's unprecedented biomass power plant

2021-04-20 | Bnamericas
BankTrack news BankTrack blog Partner news Partner blog

Why British biomass energy is a burning issue for Estonia

2020-12-09 | Engineering & Technology
Blog
BankTrack news BankTrack blog Partner news Partner blog

Warning issued to investors: Forest biomass is risky business

Briefing by environmental groups highlights serious financial, legal and reputational risks
2019-05-02 | Biofuelwatch, Global Forest Coalition, Mandy Haggith – Environmental Paper Network
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