Energy and Environment

Taxpayers subsidising carbon emissions, highlights new IEA paper on wood chip burning


In the Media

Julian Jessop quoted in The Express
The government heavily subsidises dirty and expensive wood chip burning despite net zero goal.

  • Burning wood produces more carbon dioxide than burning fossil fuels, including coal and gas.

  • British biomass power plants burn the equivalent of 27 million trees in wood pellets per year, or 14 per cent of wood pellets burnt globally.

  • The biomass energy industry is only viable due to taxpayer subsidies, estimated to reach £11 billion by 2027.

  • Father of the House Sir Peter Bottomley MP says “Government subsidies must end.”

The government is undermining efforts to tackle climate change by subsidising the burning of wood pellets for electricity, according to a new briefing paper from the free market think tank the Institute of Economic Affairs. Media reports indicate the government could announce plans as soon as this week to extend the subsidies by three years.

Since 2005, several British power plants have been converted from coal to biomass, requiring millions of tonnes of imported wood pellets. This wood chip burning is Britain’s least green energy source, producing more carbon emissions per megawatt hour produced than coal and pollutants such as sulphur dioxide.

However, biomass smokestack emissions are officially credited to the country where the trees are grown, primarily the United States and Canada. This means wood burning is officially considered ‘zero carbon’ in the United Kingdom and attracts large taxpayer subsidies. Critics have labelled this situation an ‘accounting trick’.

Christopher Snowdon, report author and the IEA’s Head of Lifestyle Economics, writes:

“Current carbon accounting practices create perverse incentives and allow governments to boast about reductions in carbon dioxide emissions that only exist on paper. It is difficult to imagine the British government permitting, let alone subsidising, the incineration of imported wood chips to generate electricity if the emissions were counted on its own balance sheet.”

The wood-burning emissions are meant to be recaptured through tree planting. However, the time it will take for new trees to absorb emissions from the burnt trees is estimated to be between 44 and 104 years. This lag is too slow to help the government’s net zero by 2050 target. The burnt wood chips are also meant to be waste products, but there is evidence that primary forests are being cut down for wood pellets.

Biomass is expensive compared to wind, solar, gas and nuclear. It also risks becoming even more costly with proposals for further subsidies linked to carbon capture technology. The Department for Energy Security and Net Zero has said carbon capture is ‘unproven at scale’. 

The briefing concludes by highlighting the greener and cheaper alternatives to biomass, including natural gas in the medium term and nuclear power plants in the longer term.

Sir Peter Bottomley, MP for Worthing West said:

“Burning wood for energy will make global warming worse for decades to come. Anyone who claims biomass at-scale can be ‘renewable’ is ignorant at best, fraudulent at worst. Government subsidies must end.

“Over the last two years over one hundred backbench MPs have, through signing letters or applications for debates, indicated that they have severe reservations about biomass. Christopher Snowdon offers a sensible and judicious contribution to this important discussion.

We should leave trees in the ground and instead focus on increasing tree cover and backing wind, solar and nuclear energy – genuinely clean technologies that will create jobs, end our reliance on expensive fossil fuels, and cut our emissions.”

Kitty Thompson, Conservative Environment Network’s Senior Nature Programme Manager, said*:.

“This report highlights important concerns about the sustainability of bioenergy, the carbon accounting methodology, and the value for money of subsidising this industry further. With questions from a broad spectrum of experts mounting, ministers should look first to alternative, cheaper, and proven sources of clean power and negative emissions before they award new subsidies to biomass plants.”

Selaine Saxby, MP for North Devon said:
“This paper rightly raises serious concerns about the sustainability of woody biomass, and whether supporting the burning of wood pellets and the impact on consumers’ energy bills can be justified.

“Instead of agreeing to further subsidies for woody biomass the Government should focus on supporting cheaper and proven clean technologies such as solar, wind and nuclear. The Institute of Economic Affairs’ rigorous look at this issue is very welcome at a time when we have the opportunity to reconsider our level of investment into woody biomass and its role in reaching net zero.”

Craig Mackinlay, MP for South Thanet said:
“The huge level of subsidy that Drax biomass power station receives is a national scandal. As Snowdon explains, electricity from Biomass is neither cheap or green. I hope that ministers will turn away from this dirty technology and prioritise gas and nuclear instead.”


Notes to Editors

Contact: [email protected] / 07763 365520

  • *This quote is not an endorsement by Conservative Environment Network caucus members.

  • A cross-party group of fifty-five MPs signed a letter to the Prime Minister in July 2023 highlighting that burning trees is undermining the push for Net Zero and calling for an end to subsidies.

  • You can download a copy of Trees for Burning: The Biomass Controversy.

About the Author

Christopher Snowdon is the Head of Lifestyle Economics at the IEA. He is the author of The Art of Suppression, The Spirit Level Delusion and Velvet Glove; Iron Fist. His work focuses on pleasure, prohibition and dodgy statistics. He has authored a number of publications including Sock Puppets, Euro Puppets, The Proof of the Pudding, The Crack Cocaine of Gambling and Free Market Solutions in Health.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.