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Biomass energy industry decries proposed efficiency regulations

Incentives tied to emissions cuts

By Michael Norton
State House News Service / September 21, 2010

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New Patrick administration rules restricting tax credits for biomass energy, aimed at curbing greenhouse gas emissions, are facing strong pushback from industry and labor officials, who say the changes will stifle job growth.

The draft regulations were released Friday evening and targeted for a mid-October public hearing. The regulations would permit credits only for projects that can demonstrate substantial reductions in greenhouse gas emissions and require biomass units to meet a new high-efficiency standard.

In December, the state suspended energy incentives for new biomass facilities, pending the development of the new criteria.

Bob Cleaves, president of the Biomass Power Association, said Sunday that existing biomass power generators would be unable to comply with the proposed rules without significant investments. He said the rules represent a major shift in state policy and standards and would have a “chilling effect’’ on new biomass projects.

“If these standards are enacted as proposed, I’m quite certain that there will be no new development in New England,’’ said Cleaves, whose group is based in Portland, Maine. “There will be no new biomass jobs created in New England. That’s a significant job killer.’’

The rules allow renewable energy credits only for power produced with biomass fuels derived from forest residue, forest salvage, and energy crops, a constraint designed to ensure forest sustainability. With restrictions, trees removed in forest management thinning operations are considered eligible biomass fuels, according to a Department of Energy Resources overview of the regulations.

The regulations would also create a fuel certification, tracking, and verification system to ensure that eligibility criteria are met, with an advisory panel established to review compliance and the state required to conduct a “forest impact statement’’ every five years.

The regulations were developed after Energy and Environmental Secretary Ian Bowles, citing new scientific studies, announced plans in early July to revise renewable energy incentives by focusing on high-efficiency biomass, significant reductions in greenhouse gas emissions over a 20-year time frame, and sustainable sources of feedstock.

In an interview, Bowles said states have been grappling for the past five years with renewable energy standards and limiting greenhouse gas emissions from biomass facilities.

He described a limited amount of feedstock for biomass in New England and a “big’’ difference in greenhouse gas implications between electric-only biomass plants and those that combine heat and power. The regulations, he said, “mean putting our incentives towards the more efficient types of facilities and grandfathering out incentives for some of the electric-only facilities.’’

Asked whether biomass energy could grow in Massachusetts if the new rules are adopted, Bowles on Sunday predicted more small- and medium-scale combined heat and power facilities. “I think it will grow in a different fashion’’ than it is today, Bowles said.

Bowles said that the biomass industry had largely evaded greenhouse gas emissions restrictions and that the state has been giving the industry a closer look based on the results of scientific studies.

“This is sound science-based policy and I understand that it’s going to have some significant implications for the industry over time, but it should not come as a surprise,’’ he said. “This is an important question to solve as we move forward.’’

The July directive from Bowles spurred grass-roots activists to drop a ballot drive targeting biomass subsidies.

Backers celebrated the Patrick administration’s decision.

In the weeks leading up to the release of the draft rules, groups such as the Conservation Law Foundation praised planned revisions requiring biomass to be highly efficient, setting stringent greenhouse gas limits, and ensuring biomass fuels are sustainably harvested.

Reached Sunday, Margaret Sheehan, who led the Stop Spewing Carbon ballot campaign, said she had not reviewed the draft regulations but understood that the rules were consistent with the goals Bowles laid out in July. Sheehan’s group had said that the planned rules were a “major victory.’’

Bowles indicated in July that he planned to have final regulations in place by Dec. 31.

Wayne Lehman, a field representative and organizer for Local 596 Laborers Council, said the group’s 500 members have been eyeing as many as 380 construction jobs tied to a project that Madera Energy has planned in Greenfield.

“It’s not going to be good for us, as in construction work,’’ Lehman said. “This is not really the time to pass regulations that are going to stifle innovation and jobs. The last three years have been very bad for us. We need jobs.’’

Richard Rosen, chief executive officer of American Agra-Energy, said the rules would halt planned greenhouse projects tied to biomass energy in Greenfield and Russell/Montgomery. Each project promises 400 jobs, Rosen said.

“These regulations are totally foolish,’’ he said. “I think it’s entirely driven by political considerations. I think the current administration has made a deal with environmental groups to write regulations to prevent biomass plants from being built in Massachusetts.’’

Cleaves agreed.

“The Commonwealth of Massachusetts is the only state in the country that is taking this approach,’’ he said.

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