Scottish Government gave £8m of green funds to coal firm

The money was granted to the now operational Glenrothes Energy Network – a joint venture between German firm, RWE, and Fife Council. It uses steam produced by RWE’s Markinch wood-burning biomass plant to heat homes and businesses in Glenrothes.

RWE is the firm behind the expansion of the Garzweiler coal mine in North-Rhine Westphalia which requires the demolition of the village of Lützerath. Activists concerned about the climate impacts of the expanded mine had been occupying trees, fields and houses in Lützerath since 2020, but were forcibly removed by German police in January.

Greta Thunberg was among the activists who were arrested. She was filmed being carried away from the site by police officers.

RWE produced twice as much climate pollution as the whole of Scotland in 2021 and was Europe’s dirtiest company that year, a title it also held in 2018, the year the Glenrothes scheme got the green light.

Green campaigners have claimed that RWE’s business is in “direct conflict with the Scottish Government’s direction of travel on climate and energy”, adding that a project involving the company “should not have received public money”.

RWE’s part in the Glenrothes project was to build an energy centre on the site of an old paper mill that converts steam produced at Markinch into hot water which drives the district heating network.

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The company said that it aims to be carbon neutral by 2040 and noted that construction of the energy centre was “fully funded by RWE” with all of the Scottish Government funds given to Fife Council to build the heat network.

Currently, the Glenrothes Energy Network provides heat to customers including a theatre complex, 33 homes, nine business units and Fife Council’s headquarters. It received Scottish Government funding through the Low Carbon Infrastructure Transition Programme.

Markinch had initially been built to provide heat for paper manufacturing at a nearby paper mill, but its owners, Tullis Russell, went out of business in 2015, the same year the biomass plant opened.

Fife Council and RWE joined forces after the closure of the mill to protect the investment in Markinch. A district heating network powered by a biomass plant had first been considered by Fife Council in 2009, before Markinch opened.

RWE has long courted criticism from environmentalists in Germany, particularly over its lignite coal mining operations. Lignite is the most climate-damaging form of coal, which is itself the dirtiest fossil fuel.

Nearly 300 million tonnes of lignite are estimated to lie beneath Lützerath and both RWE and the German government argued that concerns about energy security, in the aftermath of Russia’s invasion of Ukraine, mean it is necessary for the village to be demolished so more coal can be extracted.

But campaigners who opposed the mine claimed that burning of the coal under Lutzerath could imperil global climate targets.

In 2018, protesters also clashed with police while defending the last 200 hectares of Germany’s ancient Hambach forest, which was being felled so that RWE could continue lignite mining in the area.

Dr Richard Dixon, the former director of Friends of the Earth Scotland, was part of those protests. He told The Ferret the project in Glenrothes was the “perfect example of why funding should be decided not just on the merits of a particular project but also by looking at the credibility of the proposer”.

“As Europe’s largest polluter, fighting running battles with protestors at two of the biggest coal mines in Europe, RWE are in direct conflict with the Scottish Government’s direction of travel on climate and energy. They should not have received public money,” Dixon added.

He also raised concerns about the low-carbon credentials of the Glenrothes project.

Markinch emitted 372,000 tonnes of carbon dioxide (CO2) in 2021, meaning it produced the ninth most CO2 of any industrial site in Scotland.

But RWE claims that because the plant “predominantly” burns waste wood for energy, it is carbon neutral.

Advocates of bioenergy – which is often produced by burning wood pellets – argue that because waste wood would naturally decompose and release CO2 into the atmosphere anyway, it is better for the environment to put it to use as an energy source.

However, around ten per cent of the fuel used at Markinch is virgin wood sourced from what RWE calls “sustainably managed forests”. “Burning virgin timber can have carbon emissions as bad as coal, so this choice seriously compromises the green claims of the project,” according to Dixon.

The campaign group, Biofuelwatch, said it had “long been deeply concerned about the Scottish Government’s support, including financial support” for Markinch.

A spokesperson added: “Burning wood on the scale of the Markinch plant is unsustainable and harmful to the climate.

“Although the plant burns mostly waste wood, much of that waste could and would otherwise be used by the panelboard industry to make furniture and other durable products.

“The overall result is that more trees will be cut down, not just in the UK but also in countries exporting wood to the UK.”

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RWE told The Ferret the Glenrothes scheme has the potential to grow and “provide efficient low carbon heat to thousands of homes and businesses in the Fife area”.

“The biomass fuel used [at Markinch] is mainly made up of approximately 90 per cent locally recovered wood waste which would otherwise go to landfill and the company actively tries to minimise the use of virgin wood,” a spokesperson said.

They added that RWE is a “leading player in renewables”, has the “clear goal to be climate-neutral by 2040”, and has earmarked £15bn for green spending in the UK.

One of the conditions of the approval of the expansion of Garzweiler, and for the appropriation of Lutzerath, was that RWE exits the coal industry by 2030, eight years earlier than planned, the spokesperson added.

The Scottish Government said that the Markinch heat network project had delivered “hundreds of tonnes of carbon savings since becoming operational in 2019 while bringing jobs and ongoing investment to the local economy and wider supply chain”.

A spokesperson added: “Our independent advisors, the Climate Change Committee, have advised that when biomass is managed and harvested in a sustainable way it can play a part in our net zero energy system.”

The Scottish Greens were asked to comment.