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Everything You Wanted to Know About Woody Biomass Policies But Were Afraid to Ask Wood to Energy Policies Susan LeVan-Green Forest Service Forest Products.

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Presentation on theme: "Everything You Wanted to Know About Woody Biomass Policies But Were Afraid to Ask Wood to Energy Policies Susan LeVan-Green Forest Service Forest Products."— Presentation transcript:

1 Everything You Wanted to Know About Woody Biomass Policies But Were Afraid to Ask Wood to Energy Policies Susan LeVan-Green Forest Service Forest Products Laboratory

2 Outline Biomass Definitions Legislation Energy Policy Act of 2005 Energy Independence and Security Act of 2007 Food Conservation and Security Act of 2008 American Recovery and Reinvestment Act of 2009 Renewable Fuel Standard 2 Renewable Electricity Standard American Clean Energy and Security Act State Initiatives Future Issues

3 Biomass Definitions Farm Bill Energy Independence and Security Act of 2007 Energy Policy Act of 2005 Tax Code 2007 American Clean Energy and Security Act of 2009 American Power Act (proposed)

4 Farm Bill Allows biomass from federal lands as biofuel feedstock; includes materials, pre-commercial thinnings, or invasive species from NFS land and BLM lands; organic matter available on renewable basis from non-federal and Indian land; renewable plant material and waste material; no limits on private sector participation

5 Energy Independence and Security Act 2007 Definition for Renewable Fuel Standard (Title II) Less Restrictive Definition for Loans for Renewable Energy (Title XII) and Small Business Energy Efficiency Program -- Similar definition to Energy Policy Act of 2005

6 Energy Independence and Security Act of 2007 Renewable Fuel Standard Excludes Biomass removed from federal lands and crops for forested lands (e.g. timber harvests) Old growth or late successional forests Includes Slash and pre-commercial thinnings from non-federal lands Material from tree plantations on non-federal lands Biomass removed to reduce threat to buildings from wildfires Planted crops and crop residues from nonforested agricultural lands

7 Energy Policy Act of 2005 6 Definitions of biomass 1. Federal Government Purchase Requirement for Renewable Energy (Title II) Any segregated lignin waste Nonhazardous cellulosic material derived from forest- related resources, solid wood waste, agricultural waste or plant grown exclusively for fuel for electricity production 2. Renewable Energy Security Provision (Title II) Any organic matter available on renewable or recurring basis including agricultural crops and trees, wood and wood wastes and residues, plants, grasses, residues, fibers, and animal wastes, municipal wastes

8 Energy Policy Act of 2005 (cont) 3. Grants to Improve Commercial Value of Forest Biomass for Electric Energy, Useful Heat, Transportation Fuels and Other Commercial Purposes (Title II) Unmarketable materials or precommercial thinnings that are byproducts of preventive treatments, such as trees, wood, brush, thinnings, chips, and slash Limited to forestry biomass sources 4. Bioenergy Program (Title IX) Any organic material grown for purpose of being converted to energy Any organic byproduct of agriculture Any waste material that can be converted to energy, is segregated from other waste materials and is derived from forest-related resources or wood waste materials and landscape trimmings

9 Energy Policy Act of 2005 (cont) 5. Credit for Investment in Clean Coal Facilities (Title XIII) Any agricultural or plant waste; any byproduct of wood or paper mill operations; any other forestry maintenance 6. Conversion Assistance for Cellulosic Biomass, Waste-Derived Ethanol, Approved Renewable Fuels Grants Program (Title XV) Any organic matter available on renewable or recurring basis including dedicated energy crops residues, aquatic plants, animal wastes, wood and wood residues, paper and paper residues, and other vegetative waste materials

10 Tax Code 2007 1. Electricity Produced from Certain Renewable Resources - Closed-loop biomass means any organic material from plant exclusively planted to produce energy Open-loop biomass any agricultural livestock waste nutrients, any solid, nonhazardous cellulosic waste material or lignin material 2. Tax Credit for Producing Fuel from Nonconventional Source Any organic material other than oil and natural gas, and coal or any product thereof

11 Tax Code 2007 3. Qualifying Gasification Project Credit Any agricultural or plant waste, wood or paper mill operations byproducts; other products of forestry maintenance Does not include closed-loop biomass or paper

12 American Clean Energy and Security Act of 2009 Pending legislation, passed by House in 2009 Combined Efficiency and Renewable Electricity Standard Definition primarily uses definition from 2008 Farm Bill Excludes lands in National Wilderness Preservation System, Wilderness Study Areas, inventoried Roadless Areas, old growth stands, late successional stands (except for dead, severely damaged or badly infested), National Landscape Conservation System, National Monuments, National Conservation Areas, Designated Primitive Areas, or Wild and Scenic Rivers Includes federally recognized timber sale, harvested in environmentally sustainable quantities and residues and byproducts from wood, pulp or paper products facilities

13 American Clean Energy and Security Act of 2009 Clean Air Act Renewable Fuel Standard Majority of definition similar to previous biomass definition with sole addition of non-fossil biogenic portion of municipal solid waste and construction, demolition, and disaster debris Supplemental Emission Reductions from Reduced Deforestation Identical to first definition listed

14 American Clean Energy Leadership Act (S. 1462) Federal Purchase Requirement for Renewable Electricity Provision Includes residues and byproducts from milled logs Wood, paper products not recycled Hazard tree trimmings Invasive species Slash from non-federal lands Federal land requirement also includes harvest sustainability restrictions

15 American Power Act (S. 1733) Similar definition to American Clean Energy and Security Act with 2 exceptions: Land management plans define old growth and late successional stands Definition does not specifically identify harvesting in accordance with federal and state law

16 Biofuels Energy Policy Act of 2005 Energy Independence and Security Act of 2007 Renewable Fuel Standard 2 Fuel refiners required to blend 36 billion gallons per year into fuel supply by 2022 EPA lead agency Must include: 16 million gallons from cellulosic ethanol 1 billion gallons of biodiesel 4 billion gallons of other advanced biofuels Corn ethanol capped at 15 billion gallons beginning in 2012. From then on, incremental increases must come from cellulosics to meet 36 billion gallon mandate

17 Biofuels American Recovery and Reinvestment Act of 2009 Expanded DOE;s biofuels program; $800 million more for cellulosic and other DOE advanced biofuel research and development, as well as $6 billion for advanced biorefineries Farm Bill 2008 Biorefinery Assistance Program – loan guarantees for development, construction, and retrofitting of commercial-scale biorefineries $245 million in FY2010 Repowering Assistance – Payments to biorefineries to replace fossil fuels, $15 million/yr Bioenergy Program for Advanced Biofuels – to agricultural producers for production of feedstock Biomass Research & Development – research on biofuels


19 Biopower American Recovery and Reinvestment Act of 2009 Extension of production tax credits through 12/31/13 (1.8 cents/kWh) Includes open loop and closed loop Investment tax credits of 30% in lieu of PTC and again applies to open loop and closed loop Clean Renewable Energy bonds to incentivize financing for public utilities to construct new power plants; includes open loop and closed loop Dept of Treasury grants for CHP systems up to 10%; construction must start in 2010 and must be in service by 2017 USFS $50 million in wood to energy projects Tax credits for energy efficient residential wood stoves 30% or $1500

20 Biopower Farm Bill 2008 Rural Energy for America Program – grants, loan guarantees, incentive payments for renewable energy systems Biomass R&D – competitive grants for R&D, as well as demonstration projects $28 million in 2010 Rural Energy Self Sufficiency Initiative – Cost sharing grants for rural community energy systems from renewable energy Biomass Crop Assistance Program – Support for production and delivery of feedstocks to qualified producer Forest Biomass for Energy Program – not appropriated; USFS competitive R&D Community Wood Energy Program – not appropriated; USFS funds for feasibility studies of options for renewable energy from forest biomass

21 Biomass Crop Assistance Program Multi-year payments to producers for establishing perennial and woody energy crops Collection, harvest, storage and transport included; payments up to $45/bdt; focus of first year of program 2010 – Eligible Woody Biomass Bark, slash, thinnings, fuel wood, hardwood and softwood chips, post-disaster debris As of August 9, 2010 USDA had approved 4469 contracts for delivery of woody biomass Matching payments of more than $242 million 370 contracts in WI for $3,547,794; 16 qualified facilities ranging from school districts to large pulp mills

22 Biomass Crop Assistance Program Program on hold as USDA finalizes rule; expected release is Fall 2010 Unintended consequences – sign ups exceeded expectations and broke the budget Drove up feedstock prices for some manufacturers BCAP not intended to compete with existing higher value forest products industries Concern that funding is going to established industries instead of new bioenergy industries

23 Renewable Electricity Standard HR 2454 Congress is considering Renewable Electricity Standard with either a 10% or 20% target by 2020 20% mandate could double current level of wood harvesting in US 10% mandate could be handled by wind alone; 20% mandate might require 700 new 100MW power plants, each consuming average of 1.2 million green tons/yr and the annual net growth of close to 1 million acres of timberland

24 American Clean Energy and Security Act (Passed House) Passed House in Summer of 2009 Cap and trade market to reduce CO2 Cutting greenhouse gases by 14% by 2020 and 83% by 2050 from 2005 levels RES in ACESA is 25% Each MW of electricity generated from distributed renewable energy facilities (2MW or less) receive 3x amount of renewable energy credits than those received by a larger facility Authorizes federal govt to enter into long-term contracts for renewable energy

25 Clean Jobs and American Power Act S. 1733 enacts policies to reduce GHGS Limit or cap quantity of GHGs emitted from facilities that generate electricity and from other industrial activities beginning in 2012. EPA establish programs to administer. EPA would issue allowances to emit those gases under the cap- and-trade programs. Some of those allowances would be auctioned by the federal government, and the remainder would be distributed at no charge. Also authorizes establishment of Carbon Storage Research Corporation to support R&D of carbon capture and sequestration (CCS) technology. Funding derived from assessments on utilities. Establishes a research program for the development and deployment of renewable energy technologies in the agricultural and forestry sectors.

26 EPAs MACT and Area Source Boiler Rules Disincentive Emission standards for: Area source industrial, commerical and institutional boilers Mercury, particulate matter and CO Major source industrial, commercial and institutional boilers Mercury, particulate matter, CO, hydrogen chloride and dioxin Commercial and industrial solid waste incinerators Mercury, lead, cadmium, hydrogen chloride, particulate matter, CO, dioxin, furans, Nox and SOx

27 EPA MACT Maximum Allowable Control Technology Natural gas – Establish work practice standards (instead of emission limits) requiring annual tune-up for new and existing natural gas units with input over 10 million BTU/hr Establish work practice standards requiring tune-up every 2 years for existing units with heat input less than 10 million BTU/hr All other types of fuel – Establish stringent limits on emission that would apply at all times, including periods of startup, shutdown and malfunction

28 EPA Area Source Rule Require new coal-fired, biomass and oil-fired units to meet emission limits at all times for particulate matter and CO Require existing coal-fired, biomass and oil-fired units to meet emission limits for CO at all times Require small boilers perform boiler tune-up every two years

29 EPA Incinerators Material not considered waste Material used as fuel that remains within control of generator and them meets certain legitimacy criteria Material uses as ingredient in manufacturing process Previously discarded material that has been sufficiently processed to produce a fuel product Material uses as fuel which EPA has granted petition for non-waste determination (i.e. forest slash)

30 EPA MACT and AREA Source Rule Implications Significant impact on boilers using coal, oil, biodiesel, landfill gas or biomass Proposed definition of biomass fuel is very expansive and includes wood residue and wood products (e.g. trees, tree stumps. Tree limbs, bark, lumber, sawdust, sanderdust, chips, scraps, slabs, millings, and shavings and silvicultural materials (logging residues, prunings)

31 Renewable Portfolio Standards 30 states enacted mandatory or voluntary goals of 25% renewable electricity by 2025 California has goal of 30% and will require new capacity Massachusetts and Arizona include thermal energy as compliance option in their RPS (3,413 BTU of heat equivalent to 1000kWh of electricity) Maines target is 30% but Maine historically generated 40% of its power from eligible renewable resources

32 Renewable Portfolio Standards State renewable portfolio standard State renewable portfolio goal / August 2010 Solar water heating eligible * Extra credit for solar or customer-sited renewables Includes non-renewable alternative resources WA: 15% x 2020* CA: 33% x 2020 NV : 25% x 2025* AZ: 15% x 2025 NM: 20% x 2020 (IOUs) 10% x 2020 (co-ops) HI: 40% x 2030 Minimum solar or customer-sited requirement TX: 5,880 MW x 2015 UT: 20% by 2025* CO: 30% by 2020 (IOUs) 10% by 2020 (co-ops & large munis)* MT: 15% x 2015 ND: 10% x 2015 SD: 10% x 2015 IA: 105 MW MN: 25% x 2025 (Xcel: 30% x 2020) MO: 15% x 2021 WI : Varies by utility; 10% x 2015 statewide MI: 10% + 1,100 MW x 2015* OH : 25% x 2025 ME: 30% x 2000 New RE: 10% x 2017 NH: 23.8% x 2025 MA: 22.1% x 2020 New RE: 15% x 2020 (+1% annually thereafter) RI: 16% x 2020 CT: 23% x 2020 NY: 29% x 2015 NJ: 22.5% x 2021 PA: ~ 18% x 2021 MD: 20% x 2022 DE: 25% x 2026* DC: 20% x 2020 VA: 15% x 2025* NC : 12.5% x 2021 (IOUs) 10% x 2018 (co-ops & munis) VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 KS: 20% x 2020 OR : 25% x 2025 (large utilities )* 5% - 10% x 2025 (smaller utilities) IL: 25% x 2025 WV: 25% x 2025* 29 states + DC have an RPS (7 states have goals) 29 states + DC have an RPS (7 states have goals) DC OK: 15% x 2015

33 Property-Assessed Clean Energy (PACE) 14 states enacted legislation enabling local governments to offer low-interest loans to property owners to help pay upfront costs of permanent renewable energy improvements Loans repaid via special assessment on property which becomes a lien until amount is paid in full CA, CO, VA, LA, TX, MD, WI, VT, NM, IL, OK, OH, NV, NY Most being used for solar systems

34 Future Issues Can we meet the RFS goals of 36 billion gallons by 2022? Requires 200 to 400 commercial scale biorefineries Zero plants online now Infrastructure still a problem (move to butanol instead of ethanol) Falling behind on state RPS, economic situation and falling fossil fuel prices are disincentive Inclusion of thermal option can help meet biopower goals more quickly but lack policies or incentives to encourage development EPAs MACT and Area boiler rules are big question mark in equation

35 Questions?

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