* Commission: too early to say whether will be full inquiry
* Friends of the Earth say imported biomass is not green
BRUSSELS Feb 25 EU competition authorities have
begun preliminary inquiries into whether a British government
guarantee on a loan for Drax Group to convert coal-fired
power generation to biomass was fair, the European Commission
said on Tuesday.
The inquiry follows a complaint from environmental
campaigners, who have raised concerns that biomass - made from
trees and other plant matter - does not necessarily lower carbon
emissions and should not get government aid.
"We have asked the UK authorities for information about
this. At this stage, it would be premature to prejudge whether
this could lead to a formal state aid investigation," Commission
spokesman Antoine Colombani said.
In April last year, the British government offered a
guarantee on a 75 million pound ($125 million) loan Drax took
out to convert three of its six generating units at the Drax
Power Station at Selby, North Yorkshire, into burning biomass.
Friends of the Earth (FoE), which raised the complaint
together with energy cooperative Bristol Community Energy
Limited, said it believed the loan guarantee broke EU rules on
state aid, which require member states to notify the Commission
and that there must be no market distortion.
"Government support for infrastructure projects is essential
but only for the right sort of projects - those that help us
reduce our impact on the planet and meet legally binding climate
targets," Friends of the Earth Bioenergy Campaigner Kenneth
Scientific research has shown that many forms of biomass are
much less sustainable than they appear at first sight.
FoE said Drax's biomass plans would require pellets made
from 7 million oven-dried tonnes of wood a year, making it the
world's biggest biomass-burning power station, and that the need
to import trees was particularly environmentally unsound.
EU policy-makers have in the past worked on the assumption
biomass is carbon-neutral because emissions generated when it is
burnt for heat or power are offset instantly by the growth of
Opponents say that is a misleading assumption and biomass
can lead to higher, rather than lower carbon emissions.