Financial institutions must face up to the risks of investing in biomass
The use of biomass for energy production is a ‘blind spot’ for banks and investors, a report recently published by ShareAction reveals. The report shows that Europe’s 15 largest banks all take different approaches to biomass. The majority do not even mention biomass in their climate and energy strategies, thus displaying a failure to acknowledge the risks that the sector – which burns wood on an industrial scale to produce energy – poses to climate action, and to human health. One bank paints biomass as the way forward for climate action. Five others state that biomass can be called ‘low-carbon’ only if it meets certain criteria. Some banks are withdrawing support, while others are expanding theirs.
Given the confusion and misinformation surrounding biomass on the financial front, it is not surprising that such projects as French energy company EDF’s ‘Ecocombust’ project (FW 242) seem to have little difficulty attracting investors, despite the likely significant, negative environmental consequences.
EDF recently announced a work programme for its ‘Ecocombust’ project (FW 242). The project involves the development of heat-combusted waste wood pellets, which EDF describes as ‘an innovative and ecological fuel’, but which has never been proven to burn safely in a converted plant, and which, like all wood pellets, release high concentrations of carbon dioxide when burned. EDF hopes to take on the conversion of Cordemais and other coal plants, yet it is likely that any conversion would require imports of high-quality wood and would come with a high environmental cost.
Included with EDF’s statement is a contact number for potential investors, who, as ShareAction’s report show, are unlikely to be aware of the environmental, social and economic risks associated with biomass projects. ShareAction is clear that while investors are aware of the risks associated with coal, more must be done to educate investors about the dangers of false solutions paraded by the biomass industry and that this information should come from an impartial source.