Trees for burning: the biomass controversy
18 January 2024
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Monetary Policy
15 December 2023
Economics
29 January 2024
Economic Theory
25 June 2024
https://iea.org.uk/wp-content/uploads/2024/01/Trees-for-Burning-The-biomass-controversy-Christopher-Snowdon-1.pdf
Since 2005, four British power plants have been converted from coal to biomass as part of the transition to a low-carbon electricity grid. They now burn the equivalent of 27 million trees in wood pellets per year, almost all of which are imported. The biggest biomass supplier, Drax, imported 8.2 million tonnes of biomass in 2022, of which 4.9 million tonnes were imported from the USA and two million tonnes were imported from Canada (Drax 2023: 41).
Aided by government subsidies, the switch from coal to wood took place when biomass was cheaper than other renewable sources of energy, but the strike price of wind and solar has since fallen far below that of biomass. Since burning wood creates more carbon dioxide than burning fossil fuels, further subsidies for this industry are controversial.
Trees are a renewable resource and burning them is a sustainable way of producing energy insofar as the trees can be replanted. However, burning trees creates more carbon dioxide per megawatt of energy than fossil fuels, including coal. Wood and coal have a similar carbon intensity but when harvesting, processing, and transport are accounted for, wood produces more carbon dioxide (Sterman et al. 2018). Drax’s power plant is by far the biggest emitter of carbon dioxide in the UK energy sector, producing 13.3 megatons in 2020 (BEIS 2023: 54).
International carbon accounting frameworks allow emissions from burnt wood to be included in the carbon budget of the country in which the trees are grown rather than the country in which the wood is burned. Smokestack emissions from UK biomass power plants are therefore not counted as UK emissions. Although perfectly legal and in line with rules laid out by the Intergovernmental Panel on Climate Change designed to prevent double-counting, critics have described this as an ‘accounting trick’ (Clark 2023, Lawson 2023). While it helps the UK reduce its official emissions, it does not reduce global emissions and, in practice, the UK is creating more greenhouse gases to produce electricity than it says it is.
Advocates of biomass argue that the carbon dioxide produced by burning wood can be recaptured by planting new trees. However, depending on the type of tree, the ‘carbon debt payback period’ (the time it takes new trees to absorb the carbon emitted by the trees that have been burnt) has been estimated at between 44 and 104 years (Sterman et al. 2018) and could be even longer (Holtsmark 2010; Sterman et al. 2022). Even if replanting trees absorbed all the carbon dioxide created by felling, processing, shipping and burning the old trees, this time lag would make woody biomass unsuitable for reaching net zero by 2050. The best that can be hoped for is that burning trees will be carbon neutral in the long term, but that may be too late. Moreover, to prevent climate change trees should not be merely carbon neutral. They should be net absorbers of carbon dioxide. Burning trees prevents forests from acting as carbon sinks.
Drax claims to only burn ‘sawmill residues’ and ‘waste material collected from the forests which would otherwise be burned’1 but this has been contested. An investigation by BBC Panorama found evidence of primary forest being cut down to make wood pellets in Canada and the Southern Environmental Law Centre (2022) has found evidence indicating that not all the trees felled to produce wood pellets in the USA are being replanted.
Sawmills are efficient and produce relatively little waste. This puts a limit on how much the woody biomass industry can grow if, as it claims, wood pellets are made only from waste wood and trimmings. It should also be noted that trees in working forests will generally be replanted regardless of whether the waste is burned. Neither the sustainability of forests nor the ability of new trees to absorb carbon dioxide depends on woody biomass being burned for electricity.
To date, the biomass energy industry has only been viable thanks to government subsidies. In 2022, Drax received £617 million in subsidies and posted pre-tax profits of £146 million. Its net debt was £1.2 billion (Drax 2023). The subsidies paid under the Contracts for Difference and the Renewables Obligation are due to expire in March 2027, by which time Drax will have received an estimated £11 billion from the taxpayer (BEIS 2023: 55). Moreover, being exempt from the carbon tax because the emissions are technically outsourced, the industry gets an effective tax break that the energy think tank Ember estimates was worth £258 million in 2020 (MacDonald 2021).
In 2023, a report from the Business, Energy and Industrial Strategy Committee concluded that: ‘We do not believe that the historic allocation of subsidies to large scale biomass, such as Drax, has represented either value for money or the best use of public funds’ (BEIS 2023: 59). Although it is not unusual for the government to subsidise renewable energy in its infancy, the price of wind and solar energy has fallen sharply in the last decade while biomass is relatively expensive and will become pricier still when it starts using carbon capture and storage (see below). The current strike price for biomass energy is more than twice as high as the price of energy from offshore wind farms and solar panels. With rising global demand for wood pellets, the price of biomass energy is unlikely to fall.
With growing political opposition to unabated wood-burning, the woody biomass industry insists that bioenergy with carbon capture and storage (BECCS) will become integral to its operations within a few years, thereby providing energy that theoretically delivers negative emissions. The Climate Change Committee and the BEIS committee have both said that the burning of wood pellets for energy production should only continue if BECCS captures and permanently stores the carbon produced under the North Sea.
However, as the government’s Biomass Strategy admits, ‘BECCS is, as yet, unproven at scale’ (Department for Energy Security & Net Zero 2023: 123) and the BEIS committee has said that it is ‘uncertain’ whether BECCS could decarbonise bioenergy sustainably (BEIS 2023: 28). Advocates of CCS have often made big promises that do not deliver. A review of 263 CCS projects between 1995 and 2018 found that 78 per cent had been cancelled or put on hold (Wang et al. 2021).
In principle, BECCS could be made to work, but it would be very expensive. Capturing and storing carbon is an energy intensive process which would use a significant proportion of the energy generated from burning biomass. Dr Daniel Quiggin of Chatham House estimates that BECCS would reduce Drax’s power efficiency from 36 per cent to 21 per cent (BEIS 2022: 16). This ‘energy penalty’ means that more biomass would have to be burnt to generate the same amount of electricity and the additional cost would be passed onto the public through higher prices and/or larger subsidies. Ember has estimated that Drax’s proposed BECCS plant would cost £31.7 billion in public subsidies over 25 years, more than the total budget for the Hinkley Point C nuclear power station (MacDonald and Harrison 2021).
Achieving Net Zero by 2050 is as big a challenge as any government has ever undertaken. Ideally, all electricity would come from sources that are both renewable and genuinely carbon neutral, but that will not happen overnight. Wind and solar energy are not sufficient to power the grid today and demand for electricity will rise in the future as consumers switch to electric vehicles. According to BEIS (2023: 53), ‘almost 9% of electricity generated in the UK in 2021’ came from ‘plant-based biomass, often in the form of wood pellets imported from North America and Europe.’ This is not a trivial proportion of the UK’s electricity supply and is not easily replaced. Given the need for dispatchable and baseload electricity, it is easy to see the appeal of woody biomass, especially since it is portrayed as being carbon neutral.
However, woody biomass is expensive relative to wind, solar, gas and nuclear, and will become still more expensive with BECCS. Moreover, its green credentials are highly questionable. In October 2021, Drax has been removed from the S&P Global Clean Energy Index because its ‘carbon-to-revenue footprint’ is too large. According to the European Academies Sciences Advisory Council (2021), using wood pellets to generate electricity ‘is not effective in mitigating climate change and may even increase the risk of dangerous climate change.’ In the UK, the Climate Change Committee says that ‘sustained use of large-scale biomass generation is not compatible with the path to Net Zero’ (Climate Change Committee 2023: 36).
In the medium term, the UK will continue to emit greenhouse gases as it transitions to Net Zero. The question in the short term is whether it makes sense to continue burning imported wood pellets beyond 2027. There are surely better options. Nuclear energy is reliable, low carbon and generally cheaper than biomass energy. Energy from natural gas is much cheaper than biomass energy and produces far less carbon dioxide. Nuclear power plants take a long time to build in Britain (13-17 years), partly due to unnecessary bureaucracy, but gas plants can be built relatively quickly. In the short and medium term, the UK’s abundant reserves of natural gas are preferable to burning trees. In the longer term, the UK must greatly increase its nuclear power capacity to meet rising demand for electricity.
If carbon capture and storage (CCS) is to be part of the solution, it makes sense to retrofit plants that burn natural gas rather than plants that burn wood (Babaee and Loughlin 2017). It is technically feasible, albeit expensive, in either case, but gas is cheaper and produces much less carbon dioxide from the outset. There is no reason why the fortunes of CCS should be tied to woody biomass. Carbon capture and storage is an expensive business which trees do naturally – unless they are burned.
Current carbon accounting practices create perverse incentives and allow governments to boast about reductions in carbon dioxide emissions that only exist on paper. In the transition to Net Zero, there is a strong economic and environmental case for building new gas and nuclear power stations, in addition to expanding renewable sources of energy, rather than doubling down on woody biomass.
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.
Fullscreen Mode
Babaee, S. and Loughlin, D. (2017) Exploring the role of natural gas power plants with carbon capture and storage as a bridge to a low-carbon future. Clean Technologies and Environmental Policy 20(2): 379-91.
BEIS (Business, Energy and Industrial Strategy Committee) (2022) Oral evidence: Decarbonisation of the UK power sector, HC 283. 22 November.
BEIS (Business, Energy and Industrial Strategy Committee) (2023) Decarbonisation of the power sector: Eleventh Report of Session 2022–23. 25 April.
Clark, R. (2023) This polluting green sham has been mocking taxpayers for years – but Drax depriving taxpayers of £639 million last year by gaming the subsidy system takes the biscuit. Daily Mail 3 August.
Climate Change Committee (2023) Delivering a reliable decarbonised power system. March.
Department for Energy Security & Net Zero (2023) Biomass Strategy. 10 August https://www.gov.uk/government/publications/biomass-strategy
Drax (2023) Delivering dispatchable, renewable power: Drax Group plc Annual report and accounts 2022 https://www.drax.com/wp-content/uploads/2023/03/Drax_AR2022_single_pages.final_.pdf
European Academies Sciences Advisory Council (2021) Climate impact of woody biomass. 27 January. https://easac.eu/media-room/press-releases/details/easac-welcomes-that-the-jrc-report-strengthens-the-case-for-shorter-payback-periods-on-woody-biomass/
Holtsmark, B. (2010) Use of wood fuels from boreal forests will create a biofuel carbon debt with a long payback time. Statistics Norway, Research Department: Discussion Papers No. 637.
Lawson, D. (2023) Time’s up for Drax’s tree-burning racket. Sunday Times 4 June.
MacDonald, P. (2021) The extent of Drax’s biomass subsidies. https://ember-climate.org/insights/research/drax-biomass-subsidies/
MacDonald, P. and Harrison, T. (2021) Understanding the Cost of the Drax BECCS Plant to UK Consumers. Ember.
Southern Environmental Law Centre (2022) Satellite Images Show Link Between Wood Pellet Demand and Increased Hardwood Forest Harvesting https://www.southernenvironment.org/wp-content/uploads/2022/03/Biomass-White-Page.pdf
Sterman, J.. D., Siegel, L. and Rooney-Varga, J. (2018) Does Replacing Coal with Wood Lower CO₂ Emissions? Dynamic Lifecycle Analysis of Wood Bioenergy. Environmental Research Letters 13(1): 015007.
Sterman, J., Moomaw, W., Rooney-Varga, J. and Siegel, L. (2022) Does wood bioenergy help or harm the climate? Bulletin of the Atomic Scientists 78(3): 128-38.
Wang, N., Akimbo, K. and Nemet, G. (2021) What went wrong? Learning from three decades of carbon capture, utilization and sequestration (CCUS) pilot and demonstration projects. Energy Policy 158: 112546.
Contents
Introduction
Since 2005, four British power plants have been converted from coal to biomass as part of the transition to a low-carbon electricity grid. They now burn the equivalent of 27 million trees in wood pellets per year, almost all of which are imported. The biggest biomass supplier, Drax, imported 8.2 million tonnes of biomass in 2022, of which 4.9 million tonnes were imported from the USA and two million tonnes were imported from Canada (Drax 2023: 41).
Aided by government subsidies, the switch from coal to wood took place when biomass was cheaper than other renewable sources of energy, but the strike price of wind and solar has since fallen far below that of biomass. Since burning wood creates more carbon dioxide than burning fossil fuels, further subsidies for this industry are controversial.
Environmental arguments
Trees are a renewable resource and burning them is a sustainable way of producing energy insofar as the trees can be replanted. However, burning trees creates more carbon dioxide per megawatt of energy than fossil fuels, including coal. Wood and coal have a similar carbon intensity but when harvesting, processing, and transport are accounted for, wood produces more carbon dioxide (Sterman et al. 2018). Drax’s power plant is by far the biggest emitter of carbon dioxide in the UK energy sector, producing 13.3 megatons in 2020 (BEIS 2023: 54).
International carbon accounting frameworks allow emissions from burnt wood to be included in the carbon budget of the country in which the trees are grown rather than the country in which the wood is burned. Smokestack emissions from UK biomass power plants are therefore not counted as UK emissions. Although perfectly legal and in line with rules laid out by the Intergovernmental Panel on Climate Change designed to prevent double-counting, critics have described this as an ‘accounting trick’ (Clark 2023, Lawson 2023). While it helps the UK reduce its official emissions, it does not reduce global emissions and, in practice, the UK is creating more greenhouse gases to produce electricity than it says it is.
Advocates of biomass argue that the carbon dioxide produced by burning wood can be recaptured by planting new trees. However, depending on the type of tree, the ‘carbon debt payback period’ (the time it takes new trees to absorb the carbon emitted by the trees that have been burnt) has been estimated at between 44 and 104 years (Sterman et al. 2018) and could be even longer (Holtsmark 2010; Sterman et al. 2022). Even if replanting trees absorbed all the carbon dioxide created by felling, processing, shipping and burning the old trees, this time lag would make woody biomass unsuitable for reaching net zero by 2050. The best that can be hoped for is that burning trees will be carbon neutral in the long term, but that may be too late. Moreover, to prevent climate change trees should not be merely carbon neutral. They should be net absorbers of carbon dioxide. Burning trees prevents forests from acting as carbon sinks.
Sustainability arguments
Drax claims to only burn ‘sawmill residues’ and ‘waste material collected from the forests which would otherwise be burned’1 but this has been contested. An investigation by BBC Panorama found evidence of primary forest being cut down to make wood pellets in Canada and the Southern Environmental Law Centre (2022) has found evidence indicating that not all the trees felled to produce wood pellets in the USA are being replanted.
Sawmills are efficient and produce relatively little waste. This puts a limit on how much the woody biomass industry can grow if, as it claims, wood pellets are made only from waste wood and trimmings. It should also be noted that trees in working forests will generally be replanted regardless of whether the waste is burned. Neither the sustainability of forests nor the ability of new trees to absorb carbon dioxide depends on woody biomass being burned for electricity.
Economic arguments
To date, the biomass energy industry has only been viable thanks to government subsidies. In 2022, Drax received £617 million in subsidies and posted pre-tax profits of £146 million. Its net debt was £1.2 billion (Drax 2023). The subsidies paid under the Contracts for Difference and the Renewables Obligation are due to expire in March 2027, by which time Drax will have received an estimated £11 billion from the taxpayer (BEIS 2023: 55). Moreover, being exempt from the carbon tax because the emissions are technically outsourced, the industry gets an effective tax break that the energy think tank Ember estimates was worth £258 million in 2020 (MacDonald 2021).
In 2023, a report from the Business, Energy and Industrial Strategy Committee concluded that: ‘We do not believe that the historic allocation of subsidies to large scale biomass, such as Drax, has represented either value for money or the best use of public funds’ (BEIS 2023: 59). Although it is not unusual for the government to subsidise renewable energy in its infancy, the price of wind and solar energy has fallen sharply in the last decade while biomass is relatively expensive and will become pricier still when it starts using carbon capture and storage (see below). The current strike price for biomass energy is more than twice as high as the price of energy from offshore wind farms and solar panels. With rising global demand for wood pellets, the price of biomass energy is unlikely to fall.
BECCS
With growing political opposition to unabated wood-burning, the woody biomass industry insists that bioenergy with carbon capture and storage (BECCS) will become integral to its operations within a few years, thereby providing energy that theoretically delivers negative emissions. The Climate Change Committee and the BEIS committee have both said that the burning of wood pellets for energy production should only continue if BECCS captures and permanently stores the carbon produced under the North Sea.
However, as the government’s Biomass Strategy admits, ‘BECCS is, as yet, unproven at scale’ (Department for Energy Security & Net Zero 2023: 123) and the BEIS committee has said that it is ‘uncertain’ whether BECCS could decarbonise bioenergy sustainably (BEIS 2023: 28). Advocates of CCS have often made big promises that do not deliver. A review of 263 CCS projects between 1995 and 2018 found that 78 per cent had been cancelled or put on hold (Wang et al. 2021).
In principle, BECCS could be made to work, but it would be very expensive. Capturing and storing carbon is an energy intensive process which would use a significant proportion of the energy generated from burning biomass. Dr Daniel Quiggin of Chatham House estimates that BECCS would reduce Drax’s power efficiency from 36 per cent to 21 per cent (BEIS 2022: 16). This ‘energy penalty’ means that more biomass would have to be burnt to generate the same amount of electricity and the additional cost would be passed onto the public through higher prices and/or larger subsidies. Ember has estimated that Drax’s proposed BECCS plant would cost £31.7 billion in public subsidies over 25 years, more than the total budget for the Hinkley Point C nuclear power station (MacDonald and Harrison 2021).
Alternatives
Achieving Net Zero by 2050 is as big a challenge as any government has ever undertaken. Ideally, all electricity would come from sources that are both renewable and genuinely carbon neutral, but that will not happen overnight. Wind and solar energy are not sufficient to power the grid today and demand for electricity will rise in the future as consumers switch to electric vehicles. According to BEIS (2023: 53), ‘almost 9% of electricity generated in the UK in 2021’ came from ‘plant-based biomass, often in the form of wood pellets imported from North America and Europe.’ This is not a trivial proportion of the UK’s electricity supply and is not easily replaced. Given the need for dispatchable and baseload electricity, it is easy to see the appeal of woody biomass, especially since it is portrayed as being carbon neutral.
However, woody biomass is expensive relative to wind, solar, gas and nuclear, and will become still more expensive with BECCS. Moreover, its green credentials are highly questionable. In October 2021, Drax has been removed from the S&P Global Clean Energy Index because its ‘carbon-to-revenue footprint’ is too large. According to the European Academies Sciences Advisory Council (2021), using wood pellets to generate electricity ‘is not effective in mitigating climate change and may even increase the risk of dangerous climate change.’ In the UK, the Climate Change Committee says that ‘sustained use of large-scale biomass generation is not compatible with the path to Net Zero’ (Climate Change Committee 2023: 36).
In the medium term, the UK will continue to emit greenhouse gases as it transitions to Net Zero. The question in the short term is whether it makes sense to continue burning imported wood pellets beyond 2027. There are surely better options. Nuclear energy is reliable, low carbon and generally cheaper than biomass energy. Energy from natural gas is much cheaper than biomass energy and produces far less carbon dioxide. Nuclear power plants take a long time to build in Britain (13-17 years), partly due to unnecessary bureaucracy, but gas plants can be built relatively quickly. In the short and medium term, the UK’s abundant reserves of natural gas are preferable to burning trees. In the longer term, the UK must greatly increase its nuclear power capacity to meet rising demand for electricity.
If carbon capture and storage (CCS) is to be part of the solution, it makes sense to retrofit plants that burn natural gas rather than plants that burn wood (Babaee and Loughlin 2017). It is technically feasible, albeit expensive, in either case, but gas is cheaper and produces much less carbon dioxide from the outset. There is no reason why the fortunes of CCS should be tied to woody biomass. Carbon capture and storage is an expensive business which trees do naturally – unless they are burned.
Conclusion
Current carbon accounting practices create perverse incentives and allow governments to boast about reductions in carbon dioxide emissions that only exist on paper. In the transition to Net Zero, there is a strong economic and environmental case for building new gas and nuclear power stations, in addition to expanding renewable sources of energy, rather than doubling down on woody biomass.
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.
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References
Babaee, S. and Loughlin, D. (2017) Exploring the role of natural gas power plants with carbon capture and storage as a bridge to a low-carbon future. Clean Technologies and Environmental Policy 20(2): 379-91.
BEIS (Business, Energy and Industrial Strategy Committee) (2022) Oral evidence: Decarbonisation of the UK power sector, HC 283. 22 November.
BEIS (Business, Energy and Industrial Strategy Committee) (2023) Decarbonisation of the power sector: Eleventh Report of Session 2022–23. 25 April.
Clark, R. (2023) This polluting green sham has been mocking taxpayers for years – but Drax depriving taxpayers of £639 million last year by gaming the subsidy system takes the biscuit. Daily Mail 3 August.
Climate Change Committee (2023) Delivering a reliable decarbonised power system. March.
Department for Energy Security & Net Zero (2023) Biomass Strategy. 10 August https://www.gov.uk/government/publications/biomass-strategy
Drax (2023) Delivering dispatchable, renewable power: Drax Group plc Annual report and accounts 2022 https://www.drax.com/wp-content/uploads/2023/03/Drax_AR2022_single_pages.final_.pdf
European Academies Sciences Advisory Council (2021) Climate impact of woody biomass. 27 January. https://easac.eu/media-room/press-releases/details/easac-welcomes-that-the-jrc-report-strengthens-the-case-for-shorter-payback-periods-on-woody-biomass/
Holtsmark, B. (2010) Use of wood fuels from boreal forests will create a biofuel carbon debt with a long payback time. Statistics Norway, Research Department: Discussion Papers No. 637.
Lawson, D. (2023) Time’s up for Drax’s tree-burning racket. Sunday Times 4 June.
MacDonald, P. (2021) The extent of Drax’s biomass subsidies. https://ember-climate.org/insights/research/drax-biomass-subsidies/
MacDonald, P. and Harrison, T. (2021) Understanding the Cost of the Drax BECCS Plant to UK Consumers. Ember.
Southern Environmental Law Centre (2022) Satellite Images Show Link Between Wood Pellet Demand and Increased Hardwood Forest Harvesting https://www.southernenvironment.org/wp-content/uploads/2022/03/Biomass-White-Page.pdf
Sterman, J.. D., Siegel, L. and Rooney-Varga, J. (2018) Does Replacing Coal with Wood Lower CO₂ Emissions? Dynamic Lifecycle Analysis of Wood Bioenergy. Environmental Research Letters 13(1): 015007.
Sterman, J., Moomaw, W., Rooney-Varga, J. and Siegel, L. (2022) Does wood bioenergy help or harm the climate? Bulletin of the Atomic Scientists 78(3): 128-38.
Wang, N., Akimbo, K. and Nemet, G. (2021) What went wrong? Learning from three decades of carbon capture, utilization and sequestration (CCUS) pilot and demonstration projects. Energy Policy 158: 112546.
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