The Murky Truth of Britain’s Green Energy

In August this year while serving as Secretary of State for Business, Energy and Industrial Strategy, the now Chancellor of the Exchequer Kwarsi Karteng made a statement that importing wood pellets from North America to burn here in the UK as biofuel “doesn’t make any sense” and is “unsustainable”. 

Far from the UK government seeing the light on the environmental impacts of the biofuel industry coupled with recent changes to environmental protections – branded an “attack on nature” and encouraging “indiscriminate development” – are these comments indicative of another strategy instead?

The British Biofuel Question

Scientists have long disputed the claims that burning biomass for fuel (ie wood) is green, sustainable or renewable. On top of the large-scale removal of trees and the decrease in our plants ability to capture CO2 that go with this, evidence suggests that due to the higher density of material needed compared to coal, burning biomass actually emits more CO2 into our atmosphere per KwH than fossil fuel power stations. Furthermore the source forests for these wood pellets have been questioned on their environmental impact and sustainability.

Despite the UK Government’s misleading data that shows that most of its biofuel comes from UK feedstock through green processes such as the enzyme-facilitated fermentation of barley or wheat, the UK burns around 8 million tonnes of wood each year. Wood is the main source for biomass fuel in the UK, producing 12% of the UKs total energy supply.

Most of this energy production is done by one power station, Drax, in North Yorkshire. 

In 2020 CO2 emissions from coal power stations and steel production amounted to 10Mt. Renewable energy power plants are not required by the government to publish their emissions but it has been estimated that Drax alone emits 13.3Mt each year (estimate by independent think tank Ember; other estimates by Chatham House put emissions at 13-16Mt), which along with the emissions from the other biomass fueled power stations in the UK make emissions from wood burning the second greatest contributor to climate change after fossil fuels. 

So how can these power stations claim to be carbon neutral and sustainable when they are producing more emissions than “dirty” fossil fuels? It comes down to carbon capture; or aiming for “net zero”, which can be big business for power companies. Since converting four of its six units from burning coal in 2019 – the same year Kwarteng became Secretary for Business & Energy – Drax has received £2.5bn in government subsidies, a large portion of the £5.6bn in subsidies that the biomass industry has received in recent years, supplied by UK energy bill payers. 

The Game of Netting Zero

A number of things combine to make net zero a reality for an industry producing more CO2 than coal power stations. At one end, under assumptions made by the European Renewable Energy Standard and further entrenched by the 1992 Kyoto Protocol, end-users of harvested wood such as Drax only need to account for a small amount of the Carbon released through the process of turning wood into fuel (e.g harvesting and transport), not the actual burning of the fuel itself.

At the supply end, again under the Kyoto Protocol, forest-owners are responsible for the CO2 released through clearance of their forests, not the end-user. For Drax, supplied largely by North American forests, late-game lobbying efforts by the fossil fuel industry meant that the US effectively didn’t sign the Kyoto agreement and is under no obligation to record these emissions figures and Canada, another source of biomass for the UK, withdrew from the agreement in 2012 instead prioritising oil sand development in the Alberta region.

Furthermore, the main assumption made by the pellet industry and summarised best by Benedict McAleenan, spokesperson of British trade group Biomass UK, is that the wood created from clear-cutting and forest clearance would have spent time decaying on the forest floor, taking an age to be decomposed and “slowing the growth of the forest” in the process. Growth which would ultimately capture carbon from the atmosphere.  

However this neglects the fact that carbon from this decomposition process would stay in the ground, having not been combusted and released into the atmosphere. It also neglects studies which have shown that the payback time for this carbon debt to be reabsorbed ranges wildly, “ from 44–104 years after clearcut” and is massively dependent on the type of forest. For example primary forest, classed as ancient forest never used for logging, holds much more carbon than can be replaced by new growth.

This way of thinking about carbon capture is described by scientist Bill MooMaw, an author or a Nobel Peace Prize-winning Climate report as well as many IPCC reports as “tragically shortsighted” and says this strategy is tantamount to cooking the books on environmental impact. “If we did financial accounting like that in our daily lives,” he said, “we’d all be in prison.” 

Moomaw further highlights this saying “If we let some of our forests grow, we could remove an additional 10 to 20 percent of what we emit every year… Instead, we’re paying subsidies to have people cut them down, burning them in place of coal, and counting it as zero carbon.”

The Brazil Problem

Drax eats up nearly a quarter of the global supply of wood pellets with two-thirds of that being supplied by the US and Canada. A large part of the other third comes from forests in Brazil. 

Brazil itself is a huge consumer of biofuels, having one of the highest percentages of renewable energy in the world at 47%. Whilst being a leading supplier of biomass, the greatest portion of its domestic renewable energy consumption comes from sugarcane, which comes with its own set of environmental issues. The clearance of forest for sugarcane plantations is in itself negative for the environment, but the practice of burning sugarcane before harvest to remove excess vegetation releases huge amounts of carbon into the atmosphere. Carbon which doesn’t have to be accounted for by the end-users of the fuel. 

Brazil is counted as an Annex B party to the Kyoto Protocol and since 1997 has consistently pledged to lower its emissions by 2050 through the development of Clean Development Mechanism (CDM) Projects. However under the Bolsonaro regime these pledges and promises have come under scrutiny for updates to its proposals to the UN; proposals worth $138bn in subsidies. With questions raised about collusion between the US and Bolsonaro, a leader who arguably favours US and neoliberalism interests, it raises concerns about where Brazil’s allegiances lie when it comes to shareholders or the environment.

Given Drax’s dealings with North America in the chase for net zero, it is not a reach to say that similar deals could have been made with Brazil. Benefiting Drax while on paper still allowing Brazil to meet their pledges through CDM projects.

The working forests that Drax uses in Brazil are, in its own words, “responsibly sourced”, “sustainable” and “properly managed”. While claiming on the outside that it only uses wood that would otherwise be wasted, Drax’s own reports state that its pellets are made from low-grade roundwood, which is not classed as waste or residue wood. 

What it neglects to say is that in the case of its Brazil sources, it involves the use of fast growing but highly invasive species in areas where endemic environments are already threatened. Source forests in Brazil use Black Wattle (Acacia mearnsii) which has been listed as one of the world’s 100 Worst Invaders by the ISSG and is classed as a “noxious weed”. Native to South eastern Australia it is already a huge problem in multiple countries across Africa and Europe where it has been introduced for similar purposes. 

User to Abuser

While Kwarsi Kwarteng’s statement about the questionable sustainability of importing wood pellets could have been a statement about its environmental feasibility, it is more about the sustainability of the UK importing its fuel. 

After the august statements by Kwarteng, a government spokesperson said: “[Kwarteng] has always been clear biomass has a key role to play in boosting Britain’s energy security…The UK government only supports biomass which complies with our strict sustainability criteria and will shortly publish our biomass strategy, which will further detail our position on its future use”; implying Kwarteng indeed has no plan to heed his ministers remarks about the “ludicrous” nature of biomass as a carbon neutral strategy and instead press on with a domestic strategy for producing pellets. 

Drax is already active in the sale of pellets to third parties and has made steps to further its position through its subsidiary Pinnacle Renewable Energy. Recently Drax announced on its website that its subsidiary “has agreed to acquire the pellet sales contract book of Pacific BioEnergy Corporation… adding 2.8 million tonnes of orders for sustainable biomass supply to high-quality counterparties in Japan and Europe”, and aims to double its total exports between 2022 and 2030. A self professed “major producer, supplier and user of biomass, active in all areas of the supply chain “, Drax will likely be at the top of the Conservative governments list to facilitate a domestic strategy of producing and transporting pellets.

Kwarteng’s successor as Secretary of State for Business, Energy and International Trade, Jacob Rees Mogg’s recent announcements have suggested that the cost of the government’s energy support package, available to companies like Drax as well as the public, would be in the tens of billions of pounds. This package will be funded by borrowing and will ultimately be footed by the public, on top of already increasing energy bills. This comes alongside Kwasi Kwarteng’s “mini-budget” which promises cuts to taxes on the wealthy and the removal of some corporate tax altogether.

The UK’s Conservative government still believes in the idea of “trickle down economics”, however a large portion of this money packet will be finding its way into the pockets of companies like Drax plc, who have already been given billions in public funding, including $1.2bn a year in government subsidies since 2019, a deal that is proposed to continue until 2027 despite Drax being kicked from the Green Energy Index for its role in the cutting of primary forests in Canada BC among other damaging activities. 

And not all of these subsidies from this “support package” will be for Drax’s role as a green energy provider. While Will Gardener, Drax CEO, announced recently that “at the request of the UK Government, Drax has agreed to delay the planned closure of its two coal-fired units and help bolster the UK’s energy security this winter.” 

Furthermore “under the terms of the agreement, Drax will be paid a fee for the service and compensated for costs incurred, including coal costs, in connection with the operation of the coal units in accordance with the agreement.”

The ability to “cook the books” of environmental damage using loopholes in the Kyoto protocol and similar agreements enable Drax to make a lot of money through government subsidies provided by the British public, as well as straight profit from the sale of their pellets. Being a private company, most of these profits will go to shareholding companies such as the infamous BlackRock (who hold a 7% stake in Drax and manage upwards of $10 Trillion) instead of being returned to British taxpayers. Kwarteng’s recent budget ensures that the public will get less in return while their tax money goes towards environmentally damaging practices in other countries through government borrowing and subsidies. The sourcing of these subsidies from increased energy bills over traditional increases in taxes also ensures a larger pool of public money is targeted.

Drax are increasingly positioned to be a major player in the supply of wood pellets to Asia and Europe instead of an energy provider. As the UK encourages other countries to “transition away from coal” towards biomass – despite the evidence suggesting it is more damaging to our environment – their stance suggests profit over environmental protectionism. Given recent announcements on industrial zoning and the pulling back of protections denounced as “an attack on nature” by various environmental groups such as the RSPB and Woodland Trust, how much can we trust the UK government to do what is right for us and our planet over the shareholders of private corporations?