EPA's Model Trading Rule Should Draw a Line at the Forest

In August, the EPA issued its landmark Clean Power Plan (CPP) aimed at reducing emissions from stationary sources of power, including plants that burn biomass to produce electricity. This sets in motion a three-year period for individual states to prepare and submit implementation plans for how they will meet emissions reductions targets under the rule.

While the final CPP states that biomass is not categorically carbon neutral - rejecting Congressional and industry pressure to give all biomass a free pass - it does leave open the option for states and regulated entities to gain credits for "qualified biomass," defined by the agency as a biomass feedstock that is demonstrated as a method to control increases of CO2 levels in the atmosphere.

The EPA now has an opportunity to set the right direction on how it will treat "qualified" biomass. The agency took public comments on its Federal Implementation Plan (FIP) and Model Trading Rule (MTR) - guidance that will likely further clarify how EPA will review state implementation plans and promulgate its own model plans.

When developing the FIP and MTR, the agency must draw the line at the forest: while some forms of biomass may qualify, biomass from forests does not. Specifically, as I describe below, any biomass sourced directly from a forest will not meet the agency's own standard for what constitutes a zero- or low-emitting source of energy under the CPP.

When forest biomass is burned, it produces a "carbon debt" - namely an excess of carbon in the atmosphere - lasting anywhere from several years to many decades before trees regrow and re-sequester carbon. This fuel will therefore not generate "zero-or-low" CO2 emissions within the CPP's short compliance timeframes. Even in the case of "forest harvest residues" which might have otherwise decayed and released carbon anyway, this "avoided decay" extends over many years to decades.

Further, as a practical matter, it is almost impossible to track the origins and characteristics of these feedstocks (which are chipped up and undifferentiated before they get to power plants). State plans would therefore need extraordinarily comprehensive monitoring and verification requirements. For these reasons together, EPA should not approve any CPP state plan that gives emissions credits or other compliance preferences to any biomass materials sourced from a forest.

In addition, in a nod to the industry, the EPA has been considering whether so-called "sustainably-derived" forest feedstocks should be considered "qualified" biomass. They should reject this category of fuel altogether. Sustainability cannot be justified scientifically as a proxy for carbon benefits. Indeed it says very little, if anything, about the amount of biogenic CO2 emitted by a given biomass source or the net effect of those emissions on atmospheric carbon over time.

In particular, EPA should reject several "sustainable forestry" approaches often touted by biomass proponents as producing carbon benefits: so-called "regional reference point" accounting; sustained yield forestry; and certification regimes and/or best management practices. Each of these fails to produce additional carbon benefits for one simple reason: biomass-burning facilities cannot take credit under the CPP for carbon benefits of forest management that would have occurred anyway under these existing, ongoing, programs and practices.

Currently biomass markets are heading in the wrong direction: industrial-scale production of wood pellets, almost all of which occurs in the U.S. South is growing at an exponential rate. These exports are driven by the demand of European utilities whose use of biomass is supported by generous EU renewable energy policies that view all biomass as "carbon-neutral," an assumption that is fundamentally flawed. If the EPA does not follow through and exclude forest-derived biomass, then we risk repeating the perverse mistake made in Europe: where utilities are rewarded for using fuels that increase carbon emissions. The EPA has an opportunity to show tremendous leadership on this issue. The line begins with the forest.