Banks| Policies| Dodgy Deals| Campaigns
About us| Blog| Publications| Successes| Contact us| Donate
About BankTrack
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
History
BankTrack in the media
Our privacy policy
Donate
2023-01-23 00:00:00
Berta Cáceres: new rules for banks could help stop defender killings
2023-01-16 00:00:00
In the balance: Why European due diligence legislation must cover financial services
2022-12-08 00:00:00
Exposed: Western banks funding Qatar’s carbon bombs
2022-12-08 00:00:00
Right-wing attack on sustainable finance is the latest form of climate denial
2022-12-14 11:08:26
HSBC announces it will no longer finance new oil and gas fields
2022-10-13 15:56:39
More major banks and insurers refuse to support EACOP
2022-09-16 10:38:48
European Parliament passes emergency resolution against human rights violations & environmental threats linked to EACOP
2022-06-27 09:49:16
Crédit Agricole takes first step to phase out from the oil and gas sector
Connect
2022-11-22 00:00:00
Banking on Thin Ice: Two years in the heat
2022-11-17 00:00:00
BankTrack Global Human Rights Benchmark 2022
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
2022-06-28 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 3
2022-04-05 00:00:00
The BankTrack Human Rights Benchmark Asia
2022-03-30 00:00:00
Banking on Climate Chaos 2022
See all publications
Browse
Home
Banks
Policies
Dodgy Deals
Campaigns
About
About BankTrack
Donate
Contact BankTrack
Publications
Victories
Follow Us
News
BankTrack blog
Facebook
Twitter Fossil Banks No Thanks Twitter Fossil Banks No Thanks Instagram
Affiliate Websites
Fossil Banks No Thanks
StopEACOP
Forests & Finance
Banks & Biodiversity
Drop JBS
Bank of Coal
Don't Buy into Occupation
Home › Projects
MGT Teesside biomass power station United Kingdom
About
Financiers
Companies
Impacts
Governance
Brief history
Documents
News
Media
Links
Updates
About
Financiers
Companies
Impacts
Governance
Brief history
Documents
News
Media
Links
Timeline

On record

This profile is no longer actively maintained, with the information now possibly out of date

Send feedback on this profile
Download as PDF
By: BankTrack, Biofuelwatch, Dogwood Alliance, Markets for Change & NOAH (Friends of the Earth Denmark)
Created on: 2016-12-09 11:49:13
Last update: 2020-08-14 00:00:00

Contact:

Adam Macon, Dogwood Alliance. Bente Hessellund Andersen, NOAH (Friends of the Earth Denmark)


Share this page:

Clearcutting of coastal swamp forests in North Carolina, which supplies wood to an Enviva pellet mill. Photo: Dogwood Alliance
Sector Biomass Electric Power Generation
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website http://www.mgtteesside.co.uk/
This project has been identified as an Equator Project

About MGT Teesside biomass power station

MGT Teesside recently started building a 299 MW biomass power station at Teesport in the northeast of England. This will be the world's biggest purpose-built biomass power station. It will burn up to 1.5 million tonnes of pellets per year, made from around 3 million tonnes of green wood: wood that has been recently cut and therefore has not had an opportunity to dry by evaporation of the internal moisture. MGT Teesside has entered into a sourcing contract with Enviva, the biggest US pellet producer, for one million tonnes of pellets each year. NGOs and reporters have gathered evidence that Enviva is sourcing a significant proportion of their wood from the clearcutting of highly biodiverse coastal wetland forests on the North American Coastal Plain, which has been declared a Global Biodiversity Hotspot.

Latest developments

Environmental campaigners in US and Denmark urge key investor to withdraw investment from large biomass power station project MGT Teesside

2016-11-17 00:00:00

MGT Teesside biomass power station reaches financial close

2016-08-11 00:00:00

What must happen

PKA and Macquarie should immediately divest their 50% equity stakes in MGT Power. PKA in particular prides itself on its responsible investment, as they have shown by divesting from 31 coal companies (source the Financial Times). Furthermore, private sector banks should avoid supporting this project. 

The project cannot go ahead with the supply arrangements as currently planned, neither could a huge biomass power station like this be run in a sustainable manner. The project will need pellets and woodchips from almost 3 million green tonnes of wood a year. To compare, the UK's total wood production is only 10.8 million green tonnes a year. 

Impacts

Social and human rights impacts

In general, biomass power stations cause similar levels of air pollution to coal power stations of the same capacity. Using biomass as a fuel produces air pollution in the form of carbon monoxide, carbon dioxide, NOx (nitrogen oxides), VOCs (volatile organic compounds), particulates and other pollutants at levels above those from traditional fuel sources such as coal or natural gas in some cases (such as with indoor heating and cooking).

Apart from these impacts on people in the Teesside area, communities in the southern US by Enviva’s pellet plants will also be affected. Dogwood Alliance has worked with some of those communities to document the impacts from noise, traffic, pollution and, particularly worryingly, wood dust. Long-term wood dust exposure is carcinogenic according to the World Health Organisation, and it is also linked to allergic and non-allergic respiratory and nasal problems.

Forests play a vital role in maintaining clean water on which communities depend. They filter and store freshwater and they help to regulate regional rainfall cycles. This is particularly vital in a region such as the southern US, which is already seriously affected by extreme rainfall events (droughts and floods) that are exacerbated by climate change. Increased pressure on the remaining wetland forests of the region will thus put the local population at greater risk from the further disruption of the water cycle.

Environmental and climate impacts

The UK is already burning significantly more wood in power stations annually than the country produces in total every year. MGT Power will source around 1 million tonnes of pellets (equivalent to 2 million tonnes of green wood) from Enviva, who are the largest US pellet producer and who are rapidly expanding their pellet capacity across southern US. US conservation NGOs, including Dogwood Alliance and Natural Resources Defense Council, have carried out detailed investigations of some of Enviva’s pellet plants. They have found that a high proportion of Enviva’s pellets is made from hardwood, which in the region is not found on tree plantations but only in biodiverse forests. By following logging trucks to the forest and back to an Enviva pellet plant, they have documented that whole trees clearcut in wetland forests are being turned into pellets which are then shipped to Europe, especially to the UK.

Coastal wetland forests in the southern US are one of the world’s most biodiverse temperate forest and freshwater ecosystems. They form part of the North American Coastal Plain biodiversity hotspot, which is home to 1,816 endemic species of vascular plants, 138 endemic species of freshwater fish, 57 endemic species of amphibians, as well as many endangered bird, reptile and mammal species. Enviva misleadingly describes whole trees from clearcut forests as ‘residues’ or ‘thinnings’, despite clear evidence to the contrary.

Governance

Bank policies

The following bank investment policies apply to this project:
Lloyds Banking Group
csr policies
2013-11-20 00:00:00

Environmental Statement

2013-11-20 00:00:00 | Lloyds Banking Group

Applicable norms and standards

Equator Principles

Other applicable regulations

PKA A/S has signed the Global Investors Statement on Climate Change.

 

Timeline

Environmental campaigners in US and Denmark urge key investor to withdraw investment from large biomass power station project MGT Teesside

2016-11-17 00:00:00

A large new biomass power station planned at Teesport has come under fire from US environmental campaigners, who have teamed up with Danish campaigners to persuade a key investor to pull their money out because of the serious effects the development would have on southern US forests and on the climate. Fourteen US organisations sent an open letter to the Danish pension fund involved in the scheme. Energy company MGT Power is planning to build the world’s largest dedicated biomass power station, MGT Teesside at Teesport in the UK. The US NGOs’ letter points out that the power station will source around 1 million tonnes of wood pellets from US pellet producer Enviva, which “has been well documented by organisations in the Southern US, as well as leading media outlets, to be sourcing whole hardwood trees from high biodiversity wetland forests for their pellets”.  It further highlights that the region from which Enviva is sourcing wood has recently been designated a new global hotspot for biodiversity. The NGOs’ letter warns about the serious impacts which burning wood from clearcut forests in a power station has on biodiversity as well as on carbon emissions and the climate (source Biofuelwatch).

MGT Teesside biomass power station reaches financial close

2016-08-11 00:00:00

Macquarie Capital and Macquarie Commodities and Financial Markets have reached financial close on GBP 900 million of funding for a 299MW biomass-fuelled combined heat and power plant on Teesside. Developed by MGT Power, Tees REP claims to be the world’s largest new-build biomass plant. Construction is due to start imminently and be completed by 2020. The project is located on a brown-field site adjacent to the Tees Dock near Middlesbrough. The total construction cost is approximately GBP 650 million, with a further GBP 250 million raised for working capital and operating costs (source newpower.info).

Financiers

The project is financed with GBP 650 million debt and GBP 250 million equity. The GBP 650 million are loans obtained from Lloyds, Natixis, SMBC, Shinsei Bank, Development Bank of Japan, Korea Development Bank, Santander, Hastings City Bank, Edmund de Rothschild Asset Management, Finnvera, and Macquarie Bank, each likely to be 10 percent of the total loan. Macquarie acted as financial advisor raising the debt. Macquarie will own 50 percent of the equity in the project, with Danish pension fund PKA as an equity co-investor and partner who will own the remaining 50 percent stake (source Macquarie; GTReview).

Update: on December 1, Environmental Finance wrote that Macquarie Group "is understood to be in discussion to sell a stake in the world's largest biomass power plant", referring to the equity of this project. The stake is likely to be sold to a consortium of Korean investors, of which are reported to include Hana Financial Investment and NH-Amundi Asset Management. 

Related companies

Project sponsor

MGT Teesside Ltd. United Kingdom

Project's sponsor. Subsidiary of MGT Power

Other companies

Enviva United States show profile

Biomass Electric Power Generation
US producer of wood pellets

News

| |
Type:
Year:
blog
external news
our news

COVID-19 delays construction of 299 MW biomass power plant in UK

2020-03-26 | Biomass Magazine
blog
external news
our news

Macquarie negotiating sale of GIG stake in world’s largest biomass plant

2017-12-01 | Environmental Finance
blog
external news
our news

Divest from False Solutions like Biomass Power Plants - Days of Action

2017-10-24 | NOAH
blog
external news
our news

Press release: Danish pension fund's green credentials questioned

2017-09-19 | Dogwood Alliance
blog
external news
our news

A smokescreen for forest destruction

2017-06-29 | Dogwood Alliance
blog
external news
our news

N.C. citizens group, SELC challenge permit for polluter issued without public notice

2017-05-08 | Southern Environmental Law Center
blog
external news
our news

MGT Power show off remarkable progress at £650m Teesside Renewable Energy Plant

Teesside Renewable Energy Plant (TeesREP) will generate electricity for the equivalent of 600,000 homes by around 2020
2017-05-02 | GazetteLive
blog
external news
our news

Aggressive forest protection needed to meet US climate goals

2017-03-21
blog
external news
our news

Burning wood for energy ignites fierce academic row

2017-03-15 | BBC
blog
external news
our news

£450m lost over failed green power programme

Minister who backed plan now works in sector
2017-02-23 | The Times
blog
external news
our news

Amerikanske miljøorganisationer langer ud efter dansk pensionskasse

(text in Danish)
2016-11-17 | Altinget.dk
blog
external news
our news

NGOs pressure funder of GBP 650m MGT Power project

2016-11-17 | Endswasteandbioenergy.com
blog
external news
our news

America's Southern Forests Are Being Decimated to Supply Europe With Energy

2016-10-14 | Alternet.org
blog
external news
our news

Health Groups to Congress: Burning Biomass is Bad for Health

2016-09-14 | NRDC
blog
external news
our news

Teesside biomass plant reaches financial close

2016-08-11 | Newpower.info
blog
external news
our news

Dirtier than coal: burning forests for 'green' energy

2016-07-19 | The Ecologist
blog
external news
our news

Macquarie and MGT Raising Debt for $1 Billion U.K. Biomass Plant

2016-07-07 | Bloomberg
blog
external news
our news

Many trees, but few forests in the southern US

2016-04-04 | Eubioenergy.com
blog
external news
our news

New Report Seeks Securities and Exchange Commission Investigation of Misleading Climate Claims by Biomass Industry Giant

2016-03-14 | Not a lot of people know that

Documents

Type:
Year:
ngo documents
2017-09-19 00:00:00

Why PKA must divest from MGT Teesside if it wants to live up to its green credentials

2017-09-19 00:00:00 | NOAH, Dogwood Alliance, Verdens Skove, Biofuelwatch & Markets for Change
ngo documents
2017-06-30 00:00:00

The Sustainable Biomass Program: Smokescreen for forest destruction and corporate non-accountability

2017-06-30 00:00:00 | NRDC & Dogwood Alliance
correspondence
2016-09-13 00:00:00

Letter from Health organisations to USA Congress on Biomass

2016-09-13 00:00:00 | Health organisations
correspondence
2017-03-31 00:00:00

Letter from Chatham House to IEA Bioenergy on response to IEA Bioenergy letter

2017-03-31 00:00:00 | Chatham House
other documents
2017-04-30 00:00:00

Multi-functionality and sustainability in the European Union’s forests

Science Advice for the Benefit of Europe
2017-04-30 00:00:00 | European Academies Science Advisory Council (EASAC)
ngo documents
2017-03-21 00:00:00

The Great American Stand

US Forests and the Climate Emergency
2017-03-21 00:00:00 | Dogwood Alliance
other documents
2017-02-28 00:00:00

Woody Biomass for Power and Heat Impacts on the Global Climate

Research paper on the impacts of biomass
2017-02-28 00:00:00 | Chathan House
ngo documents
2016-03-14 00:00:00

Carbon Emissions and Climate Change Disclosure by the Wood Pellet Industry

A Report to the SEC on Enviva Partners LP
2016-03-14 00:00:00 | Partnership for Policy Integrity and Dogwood Alliance
ngo documents
2015-10-31 00:00:00

In the U.S. south east, natural forests are being felled to send fuel overseas

2015-10-31 00:00:00 | NRDC
ngo documents
2013-08-30 00:00:00

Our forests aren't fuel

Enviva’s Wood Pellet Mill in Ahoskie, North Carolina Threatens Endangered Ecosystems and Wildlife
2013-08-30 00:00:00 | NDRC and Dogwood Alliance
correspondence
2016-11-15 00:00:00

Letter from Dogwood Alliance et al to PKA on MGT Power's Teesside Biomas power station

2016-11-15 00:00:00 | Dogwood Alliance et al
ngo documents
2016-10-31 00:00:00

Burning trees for energy is no solution to climate change

2016-10-31 00:00:00 | Fern

Media










Links

Bos als brandstof

Report and documentary on the Dutch television about wood as fuel.

https://zembla.vara.nl/dossier/uitzending/bos-als-brandstof

Brief history

In 2009, the Department for Energy & Climate Change approved MGT Power's planning appication for this power station. In 2014, it furthermore approved a subsidies contract (Contract for Difference), which guarantees the company up to GBP 211 million in subsidies each year. Financial closure was announced in August 2016, with the Australian investment bank Macquarie and the Danish pension fund PKA A/S obtaining 50% equity each. Macquarie had by that time obtained GBP 900 million in investments for the project, including GBP 650 million in loans. In September 2016, the Finnish export credit agency Finnvera announced an additional GBP 100 million. Construction is to start within 2016.

Browse
Home
Banks
Policies
Dodgy Deals
Campaigns
About
About BankTrack
Donate
Contact BankTrack
Publications
Victories
Follow Us
News
BankTrack blog
Facebook
Twitter Fossil Banks No Thanks Twitter Fossil Banks No Thanks Instagram
Affiliate Websites
Fossil Banks No Thanks
StopEACOP
Forests & Finance
Banks & Biodiversity
Drop JBS
Bank of Coal
Don't Buy into Occupation
Vismarkt 15
6511 VJ Nijmegen
The Netherlands

Tel: +31 24 324 9220
Contact@banktrack.org
©2016 BankTrack                Webdesign by BankTrack and EASYmind
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted