Tuesday, August 2, 2016
The uncertainty that surrounds the United Kingdom’s biomass sector has been swirling for some time, and the recent vote for the U.K. to exit the European Union has exacerbated the situation. Since the Conservative government came to majority power in 2015, things for biomass haven’t been looking as bright as before. The Brexit result was preceded by significant cuts to subsidies that had already led to many projects being cancelled or scaled back. An immediate impact of the referendum result has seen the value of the pound plummet against the euro and the U.S. dollar, meaning imports have become much more expensive. As the world’s largest importer of wood pellets for biomass energy, much of which comes from North America, Brexit may hard hit the pockets of many U.K. businesses.
The biggest concern for the sector is that investments will now be significantly cut. Many of the advances that have been made in the technologies and roll-out of biomass have been funded through the European Investment Bank. The EIB is owned by the 28 member states of the EU, with the U.K. owning 16.11 percent of the shares. But to be a shareholder of the EIB, a country must be a member state of the European Union, so the U.K. will now have to pull out of the EIB.
On the day that the referendum results were announced, Werner Hoyer, president of the EIB issued a statement, saying, “Today is a very sad day for Europe. As president of the European Investment Bank, I take note of the U.K. vote with the deepest regret, although of course the bank will work with member states and other EU institutions to assure an orderly transition to a new negotiated arrangement according to the treaty.”