Countries of the Western Balkans have enough prospective utility-scale solar and wind projects to generate four times more electricity than from gas-fired plants, saving billions of euros and avoiding significant carbon emissions in the process, according to a new report from Global Energy Monitor.

KfW is the main financier of a   controversial EUR 32 million Programme for Renewable Energy in South East Europe – Development of a Biomass Market in Serbia, which started in 2017. The programme  has already led to the construction of four combined heat and power (CHP) plants in four  Serbian municipalities [2],  each featuring a wood boiler and a larger fossil fuel boiler. On 14t of May 2024, KfW approved two new  contracts for a further EUR 9.9 million in loans for six more wood biomass plants in six further municipalities. [3] The full details of the agreements for the second phase remain undisclosed.

KfW’s financing of wood bioenergy in Serbia is sourced from Federal Ministry for Economic Cooperation and Development (BMZ) funds aimed at reducing greenhouse gas emissions and supporting a just transition. However, the planned investment threatens Serbia’s forests, affecting the diverse wildlife and ecosystems they support, and exacerbates the existing high levels of air pollution. As the letter points out, illegal logging is widespread in Serbia and there is no adequate legal and administrative framework for protecting forests and all the mammals, birds, fungi and other life forms that depend on them.

500 scientists warned in an open letter in 2021 that additional woodharvest for bioenergy “will increase warming for decades to centuries. That is true even when the wood replaces coal, oil or natural gas.” Furthermore, part of that ‘climate finance’ has been used to build new fossil fuel boilers next to wood-fired ones.

Natasa Kovacevic, Campaigner for district heating sector decarbonisation, CEE Bankwatch Network ‘Not enough wood can be harvested to cover Serbia’s plans for biomass district heating without causing serious harm to the countries’ forests. Pouring further money into burning trees for heat means feeding illegal logging activities, exacerbating poor air quality and fuelling the climate crisis. It also crowds out funding urgently needed for more sustainable energy solutions.‘

Zoe Lujic from Earth Thrive, who lives in Serbia, states: “Industrial forest biomass goes against the inherent and inalienable rights of Nature and thus  violates the rights of  forests and living forest communities, to live and exist, flourish and evolve naturally. We strongly oppose the spreading of industrial forest biomass in Serbia, Balkans and beyond.”

Almuth Ernsting from Biofuelwatch adds: “KfW must discontinue further support for biomass energy in Serbia, re-evaluate funding priorities, and support real heating alternatives such as solar, geothermal, large-scale heat pump deployment, and energy efficiency measures to ensure genuine climate and nature benefits. Mr Sven Giegold, State Secretary in the FederalMinistry for Economic Affairs and Climate Action and Chair of the Board of Directors of KfW needs to intervene to ensure that KfW carries out a review to that effect.”

Jana Ballenthien, forest campaigner with ROBIN WOOD and member of the German network ausgebrannt says:  “Germany has a huge responsibility for forest destruction worldwide. It is not the first time that BMZ is financing projects which promote burning forest biomass. We cannot accept that the German development bank KfW becomes an instrument for promoting harm to the climate internationally. A fundamental rethink is needed.”

Contacts:

Natasa Kovacevic
Campaigner for Decarbonisation of the District Heating Sector for the Western Balkans, CEE Bankwatch Network, email. [email protected] , Mob. +382 67 030 033

Almuth Ernsting Biofuelwatch, [email protected], Tel.: +44-79340-227525

Zoe Lujic, EarthThrive, [email protected]  Tel.: ++381 64-309-8177

Notes for editors:

[1] Open Letter to KfW – Offener Brief an die KfW

[2] The recently built plants are located in Priboj, Mali Zvornik, Novi Pazar and Majdanpek.

[3]  More information about KfW’s Programme for Renewable Energy in South East Europe – Development of a Biomass Market in Serbia can be found at:

https://www.kfw-entwicklungsbank.de/ipfz/Projektdatenbank/Förderung-erneuerbarer-Energien-in-Südosteuropa—Entwicklung-des-Biomassemarktes-in-Serbien-29131.htm and

https://www.german-energy-solutions.de/GES/Redaktion/DE/Publikationen/Kurzinformationen/Technologiefactsheets/2022/fs-serbien.pdf?__blob=publicationFile&v=1

Source : https://bankwatch.org/press_release/environmental-ngos-demands-kfw-to-halt-investments-into-controversial-biomass-projects-in-serbia