With the Triodos Bio-based Mortgage, customers receive an extra low interest rate if they are going to live in or build a bio-based home. "There are plenty of alternatives to concrete, steel and rock wool," says Mortgages Director Jeroen Pels. "By providing financial incentives for building with wood, straw and flax, we hope that these materials will become more competitive."

Emptying the ocean with a thimble
In the coalition agreement, the coalition parties agreed to accelerate housing construction to 100,000 homes per year. Because we now build gas-free and insulate well, the share of material-related emissions can be as much as 90% of the CO2 footprint of buildings during their lifetime.

According to Jeroen Pels, the way we build now is not sustainable. "If we continue to build the way we are building now for another 10 years, the CO2 emissions associated with that will be equivalent to the CO2 emitted by Dutch industry in one year." According to him, achieving the climate goals requires a radically different way of building and financing."

Conventional construction consists mainly of steel and concrete. Their production accounts for 17% of global CO2 emissions. A lot of fossil energy is needed in the production process and a lot of carbon is released. Moreover, these materials are less suitable for high-quality circular applications. According to Pels, there is another important argument for bio-based construction. "Natural materials lead to a healthier and more comfortable living environment, better for the planet but also for the resident."

Environmental burden of building materials
Triodos Bank looks at the Environmental Performance of Buildings (Dutch abbreviation: MPG) when applying for a bio-based mortgage. The MPG indicates the environmental impact of the materials used in a building. The lower the MPG value, the more sustainable the building. According to the Dutch building code, all new buildings must have an MPG value of 0.8 or lower. The bank expects that this will soon be lowered further by the government to a value of 0.5. Customers with a home with at least label A+++ or A++++ and an MPG value of 0.45 or lower qualify for the extra low interest rate.

Triodos Bank believes that the current calculation methods and MPG standards do not yet take sufficient account of the CO2 storage of wood, for example. For that reason, a custom calculation is offered for homes built predominantly with sustainable materials that enable better CO2 storage and circularity. "We hope that the national standard will eventually take this into account," says Pels. An external partner, Alba Concepts, performs the calculations.

According to Norbert Schotte of Alba Concepts, also co-founder of the Gideon movement, the current calculation method puts bio-based materials at a disadvantage, because storage of CO2 is cancelled out by an unlikely end-of-life scenario. "In order to stimulate bio-based houses anyway, we perform a target value calculation on the basis of the Carbon budget. This puts us ahead of politics and the necessary adaptation of the MPG."

Hope for replication
Triodos Bank sees the launch of the new bio-based mortgage as a first step. Pels: "We all need to make a move towards bio-based. We hope to be emulated by other parties. The standards and measuring instruments are not yet adequate. But just as the energy labels were not good to begin with, the same can be said of materials standards. In ten years' time, bio-based and nature-inclusive construction will simply be the norm. We are going to accelerate that.

Bio-based construction
Bio-based construction is a way of building with renewable, plant-based building materials that absorb CO2 as they grow and then grow back quickly after harvesting. The materials emit little or no CO2 during production, processing and transport and are excellent for reuse. Examples are wood, straw, flax and even fungi.

Challenging the sector
Since 2012, Triodos Bank has been the first Dutch lender with a mortgage that is linked to the energy label. The greener the home, the lower the mortgage rate. This incentive is designed to encourage homeowners to make their homes more energy efficient. By constantly coming up with new initiatives to stimulate the sustainability of existing homes, the green lender wants to continue to challenge the sector to finance greener.