Government temporarily halts subsidies for biomass power plants

The government wants to stop funding wood-based biomass plants as soon as possible. At the request of the Tweede Kamer, the Cabinet announced on Wednesday they will temporarily stop granting subsidies for the facilities until there is a phase-out plan.

Biomass plants are known to emit large amounts of greenhouse emissions. Therefore, the Cabinet wants to switch to more sustainable energy sources for low-temperature heating.

Yet, a phase-out plan may have financial consequences, research from the Netherlands Environmental Assessment Agency and the research agency, TNO showed. Biomass energy based on wood is one of the cheapest forms of energy production. The study showed that a phase-out plan before 2030 could have financial consequences which the citizens pay via a higher heating bill.

According to TNO, should the government abruptly replace wood biomass with alternative energy sources, expenditure could rise by 2.7 billion euros. The research agency said that the closer to 2030 the subsidies are stopped, the lower the costs of the transition will be.

Many biomass plants currently rely on government subsidies to remain profitable. In the next subsidy round starting in the autumn, the government has decided to exclude wood-based biomass for low-temperature heating from the scheme. Hereby, the Cabinet hopes to reduce the environmental impact of biomass energy.

The decision was announced after a great deal of debate about Vattenfall, which had planned to build a biomass plant in Diemen. Those plans look to be on hold, after local outcry garnered the attention of young environmental activist Greta Thunberg.

Vattenfall expected that their plant would meet 15 percent of the heating demands within the region. In order for the plans to go through, Vattenfall was heavily reliant on government subsidies.

The Swedish company announced it instead plans to construct a massive water boiler using green energy. That plant will supply heating to some residents in Amsterdam, Almere and Diemen.