Lignetics: Manufacturer of Premium Wood Pellets, Pres-to-Logs® Fire Logs, and Fire Starters

Welcome to Lignetics' blog where we will be posting current information about the wood pellet, fire log, and fire starter industry. We welcome your comments and additions as we develop what we hope will be an up-to-date information center on all developments concerning wood pellets and fire logs.


From Biomass Magazine

By Erin Voegele

The USDA has announced its intent to prepare a programmatic environmental impact statement (PEIS) to assess the potential environmental consequences associated with proposed discretionary changes to the Biomass Crop Assistance Program. A public comment period on the matter is now open.

According to a notice posted in the Federal Register, the USDA’s Farm Service Agency will prepare the PEIS on behalf of the Commodity Credit Corp. The notice informs the public of FSA’s intent to seek public comment on potential changes being considered for BCAP and on environmental concerns related to the proposed changes. Preparation of the PEIS is required by the National Environmental Policy Act of 1969. The USDA indicated the input it receives as part of the notice will enable the development of alternatives for implementing the proposed changes to BCAP and begin to evaluate the impacts of those alternatives, as required by NEPA.  

The notice explains that the purpose of the PEIS process is to provide FSA decision makers, other agencies, tribes and the public with an analysis of the potential beneficial, adverse, and cumulative environmental impacts associated with proposed discretionary changes to BCAP.

In 2010, a final PEIS for BCAP was published by the FSA.  According to the notice, that PEIS evaluated environmental consequences of establishing and administering the BCAP as specified in the 2008 Farm Bill. Since 2010, environmental assessments have been prepared for various project areas and for specific feedstocks.

The 2014 Farm Bill amended and reauthorized BCAP through 2018. According to the notice, the 2014 Farm Bill included a number of non-discretionary changes to the program. Those changes are primarily administrative in nature, do not alter the general scope of the program, and have already been implemented through rulemaking.

The notice explains the FSA is currently considering discretionary changes to the way BCAP is implemented. Those discretionary changes define the scope for the new PEIS.

According to the notice, the proposed discretionary changes aim to improve the functionality and flexibility of the establishment and annual payments as part of BCAP. No discretionary changes are being proposed for the matching payments part of BCAP.

The proposed changes include consideration and review of additional crops, such as pongamia pinnata, giant miscanthus seeded and rhizome clones, giant reed, pennycress, energy cane, biomass sorghum, sweet sorghum, yellowhorned fruit tree, eastern cottonwood, kenaf, jatropha, eucalyptus (fast growing), castor beans, short-rotation pine, tropical maze, hybrid willow, sweetgum, black locust, loblolly pine, aspen, rubber rabbitbrush, and guayule.

A separate proposed change would add requirements or additional practices for conservation plans on expiring conservation reserve program (CRP) or agricultural conservation easement program (ACEP) land acres that would be enrolled in BCAP project areas.

In addition, the notice includes the potential for enrolling annual crops in BCAP project areas for contracts of less than five years.

Additional proposed changes would establish program management processes that could help offset the lack of crop insurance for biomass crops or provide sufficient information for the Noninsured Crop Disaster Assistance Program to establish coverage, and would address treatment of the required FSA annual rental reductions in the event of no bioenergy market and use for the harvested or collected biomass crops.
According to information published in the notice, the FSA plans to hold a series of scoping meetings to provide information on the proposed changes to BCAP and solicit input from program participants, the public and other stakeholders on the environmental impacts of the proposed changes and alternatives to the proposed changes. Meetings are scheduled to be held July 14 in Sacramento, California; July 15 in Honolulu; Aug. 3 in Raleigh, North Carolina; Aug. 4 in Orlando, Florida; and Aug. 5 in Sioux City, Iowa.
Comments on the proposed discretionary changes are due July 13. An additional opportunities for public comment will be available on the PEIS when it is developed.

Additional information is available in the Federal Register notice.

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From Biomass Magazine

By Katie Fletcher

Type and location define pellet fuel's quality and prospective markets. These realities differ for Western producers compared to their Eastern peers in the quest to run a successful plant.

Location, location, location, is real estate’s greatest determining factor in value, and if that real estate is a pellet plant, it also determines  the product it produces. A series of forested mountain ranges-the Sierra Nevada, the Rockies and the temperate rainforests of the Pacific Northwest-span the Western United States. Many of these and other forested lands in the region are publically owned. The opposite is true for the other half of the country. Privately owned land occupies the Eastern seaboard, the largely forested highlands in the Northeast, including the Piedmont and the Appalachian Mountains, ranging down to the Southeastern coniferous forests that occupy the Gulf coastal plain to the south. Land ownership and forest type are two components that play into what sets pellet production and distribution in the West apart from that which occurs in the East.

Successful producers across the country have learned how to sustainably source the fiber their location provides and, in turn, tap the surrounding markets to distribute the pellets they produce. The markets currently gaining the most momentum are those accessed in the Southeast and Northeast. For example, in April, Portucel Sporcel Group broke ground on a pellet plant in South Carolina, and Northeast Wood Products is retrofitting its third pellet manufacturing plant in Tennessee. Another big player coming onboard in the South is Drax Biomass. The company recently spent 15 months building port infrastructure to handle and ship pellets to Europe from the company’s two 450,000-metric-ton-per-year plants: Amite BioEnergy in Mississippi and Morehouse BioEnergy in Louisiana.

While many of these plants gear up for the expanding market in Europe, further up the East Coast, spikes in demand and supply disruptions have created periods of shortages. On the other hand, an oversupply is occurring in the West, with mild weather and competing inexpensive natural gas. Some Western producers have even funneled excess pellets to the Northeast when requested and customers willing to pay a higher premium for shipping.

As for new Western plants, Centennial Renewable Energy announced plans to build a 160,000-metric-ton wood pellet plant in northern Idaho. Other than this announcement, Western producers agree new production capacity is not likely with an oversupply on the domestic side, and a lack of lucrative export market opportunities. However, as in most energy markets, the volatility makes the future unclear. As the East Coast has had success in Europe, the West may hold promise with their neighbors across the pond. Three producers, from locations in the West, share their decades of experience running successful pellet operations to provide a glimpse at what makes the region's industry tick. 

A Southwest Example
Rob Davis, president of Forest Energy Corp. with the help of Gary Moore, director of operations, and 33 employees, runs a 60,000-ton-per-year plant in Show Low, Arizona, serving primarily residential customers in the surrounding Southwestern region. Whereas most Western producers buy sawmill byproduct for their feedstock, Davis’ mill obtains its feedstock differently. “We’re a little unique in the Southwest,” Davis says. “We bring a lot of our wood directly from the forest to the plant—small diameter trees that need to be removed for forest restoration and fire hazard mitigation.”

FEC was the first mill to take material directly out of the forest and make pellets from it in the late ‘90s due to the lack of sawmill operations in the area. Even today, not many producers in the country do, because historically it’s been more economical to purchase byproduct from a sawmill or similar operation when available. Over the past decade, the plant’s feedstock had been guaranteed through the White Mountain Stewardship Project, a 10-year stewardship contract that ended in August. Davis is a founding partner of Future Forest LLC, the prime contractor for the project, which had the aim to thin 150,000 acres of forest to protect communities from wildfire and stimulate the wood industry. Although this helped Davis guarantee feedstock for the plant, stewardship contracts are not common in the West, and the high volume of public land ownership makes a huge difference when obtaining feedstock. “We’re relying on forest management plans by the BLM (Bureau of Land Management) or the U.S. Forest Service to be consistent and reliable so we can have some idea of what is going to happen in the future,” Davis says. “Whereas in the East, you would probably buy a lot more from private land owners, it’s harder to obtain longer term assurances on public lands.”

Although FEC has been able to sustainably source feedstock to churn out pellets and restore forestland, growing the market for pellets has been a challenge in the Southwest. Davis says, in general, the market is spread out much more in the West than in the East. High consumption areas, paired with the region’s population densities, are vastly distributed.  FEC can only serve customers located within an economical transportation radius from the plant to make commerce work.
Another impact on market growth is competing heating fuels. “In the West, we have pockets of propane, but we also have, in the past several years, had very inexpensive natural gas, which has made it difficult for the Western markets to grow,” Davis says. “If you look at New England, they’ve had pretty high-priced fuel oil, which has caused more stove sales because it’s very competitive.”

FEC primarily uses ponderosa pine, with a small amount of the Douglas fir species to make its Heat’rs, TerrAmigo and Green Tree product lines. Within the past year, the pellets are now qualified under the Pellet Fuels Institute standards program. When it comes to hardwood species versus softwood, Davis says they don’t see it having a significant impact on the marketplace. He adds that for the most part pellets consumed in a region are produced there. “We shipped more to New England this year because they had a short-term demand and we had some extra product, but that’s not typical,” Davis says.
FEC went into business in 1992, and has experienced consistent, gradual market growth since. Ultimately though, “I don’t see a huge change in the market, or demand for pellets in the West unless outside influences create an impact,” Davis says.

Producing Coast To Coast
Ken Tucker, CEO of Lignetics Inc., agrees with Davis’ outlook. “I think the West is going to be pretty flat and the growth is going to be in the East,” he says.

Lignetics has plants on both sides of the country. The company’s flagship plant, built in 1979, is located in Sandpoint, Idaho. Its East Coast plants are located in Linn, West Virginia, and Kenbridge, Virginia. This February, Lignetics merged with Western pellet producer Bear Mountain Forest Products, adding two facilities in Oregon to the mix, one in Brownsville and the other in Cascade Locks. “We wanted to expand our footprint in the West,” Tucker says. “We wanted to expand our shipping corridors; freight has become a big part of our business lately. There is only so far you can truck our product and still be competitive.”
Lignetics is also in the midst of some expansion projects and upgrades. “At our Cascade Locks plant in Oregon we’re putting in a complete new dryer line, upgrading the pellet equipment and automating the bagging operation,” Tucker says. “We’re upgrading our Virginia facility right now to include additional production capability, and we have just finished an upgrade in our West Virginia plant allowing us to process chips more efficiently than we were before.”

The recent merger and upgrades have increased Lignetics capacity. Its facility in Idaho is designed to produce about 80,000 tons per year with about 5,000 of the tonnage going into log production. The recent Cascade Locks acquisition has the capability now to produce between 30,000 and 40,000 tons of pellets per year, but will soon be raised to 60,000 or more. The company’s Virginia plant will also be ramped up from its current operating capacity of 65,000 tons to 75,000 or more per year. Finally, both the Brownsville plant and the West Virginia facility are permitted at 125,000 tons per year.

Lignetics produces pellets qualified under the PFI standards program at its Idaho plant from premium quality Western conifer sawdust, and has changed the product’s distribution pattern over the years. “We started out supplying 100 percent of our production as bulk pellets as a replacement for industrial and commercial users to displace coal,” Tucker says. “The first pellet stoves became available in 1984, and the Lignetics Idaho plant was the first plant in the U.S. to bag fuel for residential use. We have gradually gone from 100 percent bulk to right now we’re at about 2 percent bulk.”

Now, although almost exclusively residential, Tucker sees tentative potential to export from the Cascade Locks plant located on the Columbia River. “At some point we’d like to be able to think we can export to Asia, but we’re frankly not holding our breath on that happening anytime soon,” Tucker says. “We’re certainly in a good position to do that on the river, which leads us right out to the Pacific Ocean.”

Overall domestically, Eastern and Western producers have access to a similar, diverse retail base. “Hearth product dealers are the people who really brought us to the dance 25 years ago,” Tucker says.

He adds that it’s a mix of the independent dealers who sell hearth products, hardware chains, big box retailers and farm supply stores amongst others. While the markets are similar across the country, pricing varies slightly. “One of the things that keeps the Western pricing down is, quite honestly, there is more supply of pellets in the West than there is demand, which is just the opposite in the East,” he says.

Due to the oversupply, Tucker doesn’t see a lot of expansion opportunity in the West, especially in the domestic market. He believes, “Before you are going to see too much growth it will have to come from offshore opportunities.”

Exploring Any, All Markets
Chris Sharron, CEO of West Oregon Wood Products, echoes Davis’ and Tucker’s thoughts on the status of the current market. “We see pellet plants not running to capacity out here and/or trying to find some other markets,” Sharron says. “The pie stays the same size, yet the slices are getting smaller and smaller.”

WOWP creates pellets predominantly from Douglas fir at its two plants in Oregon; a 30,000-ton-per-year facility in Banks and a 50,000-ton-per-year facility in Columbia City. Like Davis, WOWP has shipped some pellets to the Northeast at a higher freight cost. Sharron attributes their success in selling across the country to the customer base they’ve built who prefer a Douglas fir pellet. “We hope to hang on to at least some of that market looking for a super high-quality pellet,” he says.

Besides the Northeast, Sharron says they continue to look at any and every market. For now, the domestic, residential West Coast is the most suitable with the highest return. WOWP has also sold its bagged fuel into the residential market in Italy. However, over the past few months with the return of the dollar, the increased tax on pellets in Italy, along with port issues, and mild heating seasons in Europe that export business is no longer there. Recently, Sharron has also taken his business to Asia. “We’ve been getting excited because at least we’re on the right beach to service that market,” he says. “We shipped some pretty good tonnage into Asia in  2014, they don’t have a very big thermal market as of yet, so a majority of the pellets are being used to make electricity.”

One of the advantages of shipping to this market was that it helped keep the two Oregon plants running during the spring and summer offseason. Now, with oil prices down and the strength of the dollar back, Sharron says they are debating whether to continue with that business as well. There has been some talk about aggregating pellets together from other plants to get volume up, but the market potential in Asia remains uncertain.

As most Western producers, WOWP uses sawmill residuals as its feedstock. Sharron says in the Pacific Northwest there is a lot of biomass to be used for pellet production, but due to the terrain and often wet conditions it is expensive to harvest the material. “Unlike the Southeast U.S. where whole logs are being harvested in more of a plantation type scenario—flatter ground, large plots—that model just doesn’t work out here in the Pacific Northwest,” he says.

Sharron adds that with the market for the finished product and the pricing where it’s at in the West, it just doesn’t pencil out for his business to use anything but sawmill residuals. Currently, market pricing in the West for residential pellets freight on board (FOB) the mill is less than in the East. West Oregon is in the $150 to $160 per ton FOB mill range. Whereas in the Northeast, the plants there are in the upper 100s, some reaching over $200 per ton FOB the plant. “That’s why you see some people chipping whole logs in the East to use for pellet production,” Sharron says.

Running a successful Western pellet operation parallels in almost all aspects among these three producers. The tale is told of little market growth due in part to the West’s ample natural gas infrastructure, consecutive mild heating seasons and widely distributed markets and population density. These realities differ from the other half of the country, with the Northeast’s intermittently high fuel oil prices spiking pellet stove and boiler sales. The increasing demand for pellets in Europe gives way to increased pellet production along the Eastern seaboard. While, these three Western producers see potential opportunity on their opposing side of the beach, little can be said on how quickly the demand will come, and whether it might rival  the growing volumes in Europe. Also, the current oversupply deters future plant construction, and with the exception of Centennial Renewable Energy, little talk of new capacity has occurred.

Sharron says you need all three legs of the stool when assessing whether to build: source of fiber, know-how to construct and operate a plant and a market for the product. “All three legs are an issue right now,” he says. “Maybe not so much with the actual manufacturing, but the biggest issues are raw material supply and probably the biggest, lack of market, at least at the right price.”

A few tough years following the recession slowed down Western sawmills, which drove the price up for the fiber, and pellet prices haven’t followed. Even so, producers in the West have learned how to get creative to find market opportunity, and the variability in the marketplace could soon change the current landscape. In the meantime, with an occupation sometimes based on predicting the unpredictable, producers focus on the present. “I’m dealing with the day-to-day, keeping things running and keeping things going until hopefully some things do change in the future, which helps make things a little bit brighter,” Sharron says. “We celebrated our 30-year anniversary this May, and we're looking forward to the next 30.”

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From Biomass Magazine

By Tim Portz

Seven major European utilities, working to help producers satisfy a blend of varying sustainability requirements, establish the Sustainable Biomass Partnership.

European Union member states are united in their commitment to growing their share of renewable energy as a means of driving down carbon emissions across the continent. The Renewable Energy Directive, established by the European parliament in 2009, set a binding target of 20 percent of final energy consumption in aggregate coming from renewable sources by 2020. The levels of in-place renewable production varies from country to country so each received their own goal, which achieved, will deliver the EU to its total goal. The goals vary widely and Sweden’s goal is the largest at 49 percent. This directive has been a boon for renewable energy producers and technologies in all categories, wood pellets included. The United Kingdom’s goal is 15 percent by 2020, an ambitious undertaking considering the U.K. had among the lowest percentages of renewable energy deployments in Europe when the directive was established at 1.5 percent. It didn’t take long for utilities, regulators and policy makers to realize that if those targets were to be met, transitioning large base load power stations from nonrenewable inputs to renewable inputs like wood pellets was going to have to be a part of the plan. The concept gained momentum, taking root in other countries, some with a well-established history of cofiring and global pellet production took off. As conversion plans began to take shape, regulators, NGOs and the general public began to ask for assurances that these conversions would, in fact, deliver the intended results and drive down overall carbon emissions. Sustainability requirements soon followed and it is here that the EU’s unified approach ends. What emerged was a patchwork of varying certification requirements and schemes that utilities and producers alike say inhibit efficient trade.

Development Time Line
In 2013, seven of the leading utilities in Europe took action forming the Sustainable Biomass Partnership with the stated goal of working to “enable an economically, environmentally and socially sustainable solid biomass supply chain that contributes to a low-carbon economy.” The end game for the SBP is to develop a certification scheme recognized within all pellet-buying countries in the EU, and potentially beyond, which reduces the drag the industry is already feeling, the multiple definitions of sustainability that have already emerged in the marketplace.
Working with a small group of stakeholders, the SBP developed a first draft of the scheme in March 2014 that it called the Biomass Assurance Framework Consultation Draft which was made public and open for public comment.
“We had a public consultation, a stakeholder consultation, which was open to all,” says Peter Wilson, SBP executive director.  “We had lots of responses, over 110 pages worth once we consolidated all of them. We did have a coordinated, combined response from the environmental NGOs and that was hugely valuable. So that has helped us get to where we are, which is this robust set of standards.”
After closing the comment period, the SBP refined the consultation draft and in September of 2014 published the Biomass Assurance Frameworks Standards version 0.0, meant to be a working beta version that could be introduced to a wider group of stakeholders and solicit further comments. “In this first version of the SBP framework, we involved and engaged with a lot more stakeholders,” Wilson says. “Most notably we included other supply chain operators like resource managers, forest owners and biomass producers. All of them have been invited to our development meetings to ensure that we are developing a standard which is practicable, which can be implemented while being as robust as possible.”
This further refinement resulted in the first working framework, the SBP Framework version 1.0, which was released at an event in Brussels in late March. This version will serve as a working version which biomass producers will be encouraged to participate in and member state policy makers will be asked to accept as a means of satisfying their sustainability and carbon reduction requirements. At the event, SBP chairman and Drax Group CEO Dorothy Thompson said, “We are encouraged by the interest that representatives of the EU Institutions have shown in the SBP and its Framework, and we look forward to working with them and other interested parties to make this a truly multistakeholder approach."

How It Works
From its outset, the SBP has been clear that it is not seeking to replace existing forest certification schemes like the Forest Steward Council, the Sustainable Forestry Initiative and others. In fact, the SBP has been built to leverage these existing certification schemes whenever possible. Still, these existing certification schemes fell short of the emerging requirements regulators in Europe were asking utilities, and by extension their biomass suppliers, to comply with.
Simply put the SBP Framework is a certification scheme that contains 38 indicators of sustainability that an independent third-party auditor will verify are being successfully met. Where the SBP differs from other schemes is in its ability to recognize that for producers within a given region, the risk of not meeting one or even many of the indicators is quite low. In these situations, the indicator is recognized as low-risk and the third-party verifier moves on. To illustrate, SBP technical director Simon Armstrong points to the indicator that prohibits child labor. “There is no risk of that in the United States or Canada because of existing employment laws, so you could just assess that as low risk on a regional scale,” he says.  “You can simply say there are extensive regulations around child labor. So for operators in Canada or the United States, there is no need to go and check their employment records.” The risks that will be deemed low-risk are likely to vary from region to region. In early pilots conducted in the Baltics, 35 of 38 indicators were deemed low-risk. The SBP hopes this ability to hone in specifically on only those areas where there is a specified risk will result in the more efficient uptake of the scheme and reduced costs for producers.
The SBP is clear that one of the goals of the certification process is to provide producers with a platform to raise the transparency of what they do and how they do it with an occasionally wary and suspicious public. “Someone said recently that biomass doesn’t have a sustainability problem, its got a transparency problem. That’s quite an interesting concept,” Armstrong says.
The SBP process concludes with producers making a summary of their third-party assessment publicly available. “One aspect of this is that when you’ve performed your risk assessment correctly, you’ve engaged enough stakeholders you should be confident you haven’t missed any big risks,” says Armstrong. “You want to be in a position that when you are making the summary publicly available, you don’t have a stakeholder saying you never gave us an opportunity to comment on this process. Finally, you certainly don’t want to be in a position where a stakeholder says we made you aware of a particular risk and you never did anything about it. This is about stakeholders having the opportunity to comment.”
Recognizing that producers may see this as simply a means to give their biggest opponents a platform to interrupt their business, the SBP is quick to point out the framework has been built to deflect these criticisms and provide a pathway for producers to put unfounded allegations to rest. “You don’t have to reach a consensus with these critics, you don’t have to reach an agreement,” says Armstrong. “But you have to demonstrate that you’ve taken aboard their comment and if it falls within the scope of the SBP requirements, the 38 indicators, that you’ve done something about it.”

Getting Certified
To participate in the SBP Framework and get certified, producers will need to engage a third party verifier to conduct an audit. Thus far, the SBP has accepted nine third-party certifiers as applicants that are actively progressing towards SBP approval. Ann Arbor, Michigan-based NSF International was the first North American certification body to be granted applicant status by the SPB.  NSF International will leverage deep experience in certifying both primary and secondary manufacturers in the forest sector and strong institutional experience with greenhouse gas verification to win certification contracts in the pellet sector.
“NSF International has completed its first SBP audit of a major biomass producer located in the southeast,” reports Norman Boatwright, manager of NSF International’s forestry programs. “The witness audit report is in the process of being completed and will be sent to SBP for approval. Once this is complete and SBP finds the audit and the audit report compliant with its standards and expectations, SBP will be able to approve NSF International as an official certification body.”
It is the hope of the SBP that existing momentum and progress with certification schemes and certifiers can speed the rate of uptake and approvals throughout the industry. “The standards have been deliberately structured to align with FSC and PEFC and other certification schemes,” says Wilson.  “If an auditor is coming to do an audit for FSC, PEFC, SFI etc., they will come with their checklist and then there will be additional questions on top for SBP. So the intent is an auditing team can come and they can tick off multiple schemes at one time. It was deliberately designed like that not only for the biomass producer but also for the certification body.”
This certainly aligns with NSF International’s thinking and, Boatwright adds, “NSF International currently certifies several biomass producers, all of which will likely require SBP certification. We are in the planning stages with several other biomass producers to determine the best way for them to become certified. Ideally, SBP audits should be conducted in conjunction with the other Forestry Program audits to reduce disruption to their operations as well as save time and costs.”
Finally, the SBP is quick to point out a major distinction between their program and other certification programs. The SBP certification does not bring with it a licensing fee or a production-based fee. Producers will have to pay third-party verifiers like NSF International, of course, and Armstrong allows that other nonsubscription costs should be expected but that the design of the SBP framework should keep those to a minimum. “The costs of certification schemes don’t come from the audits so much as they do in the changes to their management system,” he says.  “I think that is the crux of why this scheme is quite smart. Because we don’t go down the route of requiring the same level of effort for each indicator irrespective of risk.

Path Forward
The plan now is to let producers, certifiers and regulators get familiar and comfortable with  SBP Framework version 1.0 over the course of the next 18 to 24 months, enabling all parties as the SBP website puts it “to learn by doing.” The SBP is planning on robust engagement with a broad swath of stakeholders and anticipates releasing a more informed and refined version of the framework, version 2.0, in 2016.
The biggest question left to answer is whether SBP certification will satisfy European regulators. These efforts are ongoing and, by necessity, are happening at a country-by-country level. Knowing that without regulatory buy-in the Framework would fail, the SBP built it with an eye to the requirements already put forward by the regulatory bodies. “The standards have been built around the U.K. and the Dutch requirements,” says Armstrong. “The U.K. are currently benchmarking SBP to determine if it meets the sustainability requirement.” The SBP Framework may be experiencing the greatest regulatory approval momentum in Denmark. “The Danes have a voluntary agreement between industry and government which was negotiated with industry, government and NGOs and the conclusion that they came to was that if the generators in Denmark are using SBP certified material, then that means that they are meeting their sustainability requirements,” says Armstrong.
Ultimately, if biomass feedstocks are going to make a lasting contribution to the renewable energy targets of not only European countries, but other industrialized nations just beginning their journeys towards reducing greenhouse gas emissions, a system that reduces drag on the market must emerge. Sustainability requirements continue to be a moving target throughout Europe with prospective pellet-buying nations still working to build requirements that satisfy their citizens and policy makers but are also practicable for utilities and their feedstock partners. A harmonized, singular set of requirements seems unlikely and this market reality gave rise to the SBP Framework. The hope now of the SBP, its utility founders and the pellet producers counting on the European market is that regulators will see the logic in one certification scheme with the flexibility to satisfy multiple notions of sustainability.

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From Biomass Magazine

By Erin Voegele

On May 19, the U.S. Senate Committee on Energy and Natural Resources held a hearing to receive testimony on 26 pieces of legislation related to energy supply, including the recently introduced S. 1264 bill, which aims to establish a national renewable energy standard (RES). Bioenergy was among the topics discussed during the more than two hour event.

S. 1264 was introduced by Sen. Tom Udall, D-N.M, on May 11. The bill aims to create the first national threshold for utilities to provide a certain percentage of their electricity from renewable resources, including wind, solar, biomass, landfill gas, ocean, tidal, geothermal, incremental hydropower or hydrokinetic. The RES requirement would phase in, starting at 7.5 percent in 2015 and gradually increase to 30 percent in 2030 and thereafter, through 2039.

During the hearing, Franz Matzner, director of the Beyond Oil Initiative at the Natural Resources Defense Council, submitted testimony in favor of the RES legislation. “The 30x30 RES will promote clean energy source that cut carbon pollution, further expand our powerful clean energy economy which currently employs hundreds of thousands of American workers, drive innovation, and provide a strong market signal that the future lies in renewable energy developed here in America,” he said in written testimony.

Matzner added that 29 states and Washington, D.C., have mandatory renewable energy targets, while seven more have set nonbinding goals. “Between 1998 and 2013, approximately 68 percent (51 GW) of non-hydrorenewable capacity additions have occurred in states with binding renewable portfolio standards. A recent analysis by the Lawrence-Berkeley National Laboratory (LBNL) found that many states are on track to successfully meet their 2035 requirements within the next few years,” Matzner continued.

“Implementing a federal renewable electricity standard would expand on the success of state-level policies across the country and ensure that our entire nation reaps the benefits of a clean energy economy. A strong federal RES would also secure America’s place as a global leader in clean energy, providing policy certainty and a transparent market signal to drive investment in American companies and manufacturers,” he said.
Matzner also cited recent analysis completed by the Union of Concerned Scientists that found a federal RES would increase renewable energy by more than 265 percent over current levels, driving $294 billion in cumulative new capital investments and decreasing electricity sector carbon dioxide emissions by 10.8 percent below business-as-usual levels in 2030. He stressed these achievements could be accomplished with little impact on electricity prices when compared to business-as-usual, with the maximum average incremental increase in electricity prices in any given year being only 0.2 percent.

In her written testimony, Susan Kelly, president and CEO of the American Public Power Association, objected to the creation of a national RES, noting that 28 states already have RES programs and eight have voluntary RES targets. She also cited the impact of cumulative U.S. EPA proposed regulations. “State and local policies promoting the greater use of renewables, along with EPA regulations to reduce CO2 emissions are sufficient drivers for the increased use of renewable resources. A federal RES is unnecessary,” Kelly said.

“Furthermore, the creation of a federal RES could create a host of issues for utilities that are already subject to state RESs and are also trying to comply with state plans issued under EPA’s final Section 111(d) rule that will be released in the summer of 2015,” she added, noting Udall’s legislation could have the unintended consequence of forcing public power, rural electric cooperative, and investor-owned utilities located in the same state to compete against one another for in-state renewable energy resources to meet state goals set by EPA in its final Section 111(d) rule.
Brent Sheets, deputy director of the Alaska Center for Energy and Power at the University of Alaska Fairbanks, addressed biomass energy during his testimony. “The heat requirement for Alaska far surpasses the electricity requirement, and while a majority of the state’s communities use diesel fuel to meet their heat demand, woody biomass is often a more economical solution, especially in communities separated from the road/rail connected system,” he said.

During the hearing, Sen. Al Franken, D-Minn., highlighted District Energy St. Paul’s biomass district heating operation, noting the organization was recently recognized for its leadership in using wood waste to generate heat and electricity for downtown St. Paul while providing customers with stable and competitive energy prices and reducing carbon dioxide emissions.

Responding to a question posed by Franken regarding Alaska’s use of biomass, Sheets noted more than 29 Alaskan communities have invested in biomass projects. Some have been successful and some have not, he said. “The successful ones demonstrate a commitment to the increased manpower that is associated with that, and then within the local communities it provides jobs, cutting down the trees, delivering them, stacking them,” Sheets continued. “In many of the rural communities, unemployment is huge, so any cash you can keep in the local economy is good. So, we have found that augmenting our other sources of power with heat from wood keeps cash in the community a little bit longer and circulating.”
Additional information on the hearing is available on the committee website.

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