In our response, we explain that in assessing whether to fund a project, we first ask whether such project will have a positive impact. Then we also look at risks and profitability. Two key references we use in that respect are our minimum standards (which state which sectors we exclude because they cause too much harm) and our business principles.
No focus on biomass for power generation
Our standards are not static, but are improved on the basis of social, scientific and technological developments. A good example is the use of biomass to generate power. Over the years, our view thereon has changed. A few years ago, we believed that some forms of biomass could be a good solution, for example, if residual wood (tree trimmings) were used and if it led to a reduction in the use of fossil fuels. But in the meantime, better alternatives have become available, such as thermal energy storage systems and surface water heat pump systems. In new financing deals, therefore, we no longer focus on biomass for power generation.
Biomass combustion for heat generation is more nuanced than power generation. In some specific cases, the use of biomass for heat generation may be the most sustainable option. Especially in the more rural areas of Spain, Germany, and the UK, it can be the 'lesser of two evils’ and therefore acceptable for us to finance. This is certainly the case if raw materials are used that contribute to other goals. In Mediterranean countries, for example, this may be wood from trees that are specifically felled to prevent forest fires. In the Dutch market, biomass for heat recovery is excluded, because the supply of raw materials from residual flows of wood is saturated and because nitrogen and particulate matter are released during combustion of residual flows.
This can also be found in our minimum standards. That list explicitly states that we always exclude biomass if it competes with food production or originates from intensive agriculture. We also address biomass in our vision paper on energy and climate, published in 2019. This vision shows how we want to contribute to combatting global warming and the loss of biodiversity. We state the following about biomass: In a sustainable, circular economy that respects planetary boundaries, heavy use of biomass is hard and seems impossible without limiting food production and jeopardizing biodiversity. Focus should be on local-for-local sourcing of the biomass input. Burning of biomass for power production or application in mobility should be avoided.