Deep Dive #2: The Biomass Debate

Biomass is classified as a renewable energy source by certain national and international bodies, such as the European Union and the Intergovernmental Panel on Climate Change (IPCC). Despite this, the classification of biomass as a renewable is contentious and has been an area of debate for Montanaro’s ESG Committee. In this report, we summarise the biomass debate from the perspective of compressed wood pellet biomass (ignoring sources such as agricultural and livestock residues, waste and other bi-products).

“Bioenergy has a significant greenhouse gas (GHG) mitigation potential, provided that the resources are developed sustainably and that efficient bioenergy systems are used”, according to the IPCC. These provisions are complicated, however. The environmental impact of wood pellet production, transportation and combustion must be fully taken into account. In particular, the supply chain of the industry needs careful analysis: the US is the world’s major supplier of wood pellets. A Japanese listed company in the Better World Fund, Renova, sources wood pellets from locations in the US that are similar to Drax, the UK power station that has transitioned from coal to biomass. As part of our research, we arranged a site visit to Drax in order to better understand the biomass market.

This note is split into two sections: 1) The Biomass Debate; 2) The Drax Site Visit.

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