Green Investment Bank “to lose last vestiges of greenness”
October 12, 2016

Environmental campaign groups warn that the imminent takeover of the UK’s so far publicly owned Green Investment Bank (GIB) by the Australian Macquarie Group will put an end to its green credentials. Those credentials have already come under doubt as a result of GIB investments in coal and biomass burning Drax power station and in waste incineration.

The Green Investment Bank was created by the UK Government, the sole Shareholder making investments to help fund the creation of new, modern, green infrastructure across the UK. It’s track record however has not been good. Supporting Drax power station to burn wood from biodiverse forests from Southern USA states in an effort to reduce NOx and SOx emissions from the dirty power station has not created sustainable energy generation.

At the time the loan was given to Drax the then Secretary of State Vince Cable said, without this loan, Drax power station “would have closed down because it has to meet European rules on coal use and it wouldn’t have been able to survive”.

Almuth Ernsting from Biofuelwatch states: “Even under government ownership, the Green Investment Bank has made some very questionable investments, none more so than their loan for Drax, who now burn more wood every year than the UK produces annually, much of it from clearcut coastal wetland forests in the southern US, and who still burn around 6 million tonnes of coal a year, too. The sale of the GIB to a big fossil fuel investor gives us no confidence that wiser investment decisions will be made in future.”

Cerrejon coal mine, Colombia: Macquarie holds shares in one of the owners (Photo: London Mining Network)

Macquarie Group, who describes itself as “a leading provider of financial, advisory, investment and funds management services” is a longstanding investor in fossil fuels, including coal mining. In the UK, it has also invested in a controversial large new biomass power station and in an unsuccessful waste incineration venture.

Anne Harris from Coal Action Network adds: “Even if the GIB is unlikely to directly fund further coal projects, future ownership by Macquarie takes away any hope that the loan to Drax will be rescinded. Furthermore, it raises the prospect of similar bad investments in future that benefit both forest destruction for biomass and, indirectly, coal burning”.

According to researchers for a Friends of the Earth Australia fossil fuel divestment campaign, Macquarie Group has loaned £1.61 billion (AUS $2.62 billion) for fossil fuel, including coal, extraction and burning since 2008. It has helped finance one of Australia’s largest new opencast coal mines, which has already involved cutting down one highly biodiverse forest. Macquarie holds shares in BHP Billiton, co-owner of the Cerrejón mine in Colombia, one of the world’s largest opencast coal mines, which sells coal to Drax power station and which has been linked to the displacement of whole villages and to indigenous peoples losing their access to sufficient clean water and food.

Australian campaigners further highlighted that during this year’s AGM, the Chairman of Macquarie Group appeased vociferous climate change deniers amongst shareholders by saying “There are two sides to this debate”, instead of endorsing the scientific consensus on climate change.

According to Shlomo Dowen, National Coordinator for the United Kingdom Without Incineration Network: “So long as the GIB invests in projects such as waste incineration and biomass incineration that result in the release of thousands of tonnes of greenhouse gases a year they should not be allowed to describe themselves as ‘green’. We had hoped that anybody looking to take on the ‘green’ moniker would commit to a complete moratorium on investments that involve the burning or gasification of waste and biomass. However, Macquarie’s past record leaves us with deep concerns.” The United Kingdom Without Incineration Network is a network of around 100 campaign groups opposing waste incineration, including gasification and pyrolysis: