On the heels of multiple studies, statements and letters warning of the detrimental effects of the U.S. EPA’s Greenhouse Gas Tailoring Rule that went into effect Jan. 2, the agency has announced it will defer for three years the rule’s permitting requirements for biogenic carbon dioxide emissions.
Implementation of the rule as written was likely to keep up to 30 states from realizing their renewables goals, according to “Economic Impact Analysis of EPA Greenhouse Gas Tailoring Rule,” a study released in December by Forisk Consulting and commissioned by the National Alliance of Forest Owners. According to the same study, the rule had already contributed to stalled investments in at least 23 near-term projects and would have put 134 at risk for cancellation or delays.
By July 2011, the EPA will complete the deferment rulemaking and during the three-year period, will continue to analyze the issue through independent studies. Subsequently, the agency will issue a second rulemaking that determines how biogenic emissions should be treated or counted under GHG permitting requirements.
“With EPA's commitment to defer regulation of greenhouse gases from biomass combustion in federal air quality permitting programs for at least three years, larger new and existing biomass combustion projects will avoid significant portions of those programs,” says Brian Patterson, associate and senior consultant with Golder Associates Inc. “In most cases, this will reduce the capital and operating costs of these projects.”
Without the exclusion of biogenic emissions, the Tailoring Rule would also have reduced renewable electricity generation in the country by 5,384 megawatts; removed 53.4 million tons of woody biomass from the renewable energy marketplace; cost between 11,844 and 26,380 renewable energy jobs; and reduced investment in renewable electricity generation by $18 billion, according to the Forisk study.
“For us, the biggest number there is the capital because everything else flows from that investment,” says Brooks Mendell, lead author of the study. “Eighteen billion dollars capital is a function of the cost associated with these projects that have been announced and have not yet been built.”
Bob Cleaves, president and CEO of the Biomass Power Association, has pointed out many of the same concerns since the rule was initially released in June 2010. “The agency’s statement that certain biomass ‘such as waste materials whose inevitable decomposition will result in greenhouse gas emissions anyway’ confirms what we at BPA have known all along: the use of wood waste materials and agricultural residues for biomass energy have a beneficial carbon impact and should be embraced as a renewable energy source,” he says.
American Forest & Paper Association President and CEO Donna Harman also weighed in on the deferment immediately after its announcement, saying the treatment of biomass emissions like fossil fuel threatens beneficial investments in biomass energy upgrades at paper and wood products mills throughout the country.
The Biomass Thermal Energy Council says it will be working with the EPA as it goes through the rulemaking process.
"Over the next three years, BTEC will work to maintain an open dialogue with EPA and provide it with the information needed to meet its requirements responsibly and accurately under the law," said BTEC Executive Director Kyle Gibeault. "The EPA's most recent announcement on biomass—combined with its petition to reconfigure the Boiler MACT rule—is evidence that the agency is appreciating the critical role that biomass can play in addressing America's economic and energy challenges."
EPA Administrator Lisa Jackson says the agency will move forward with the Tailoring Rule in a way that is scientifically sound and manageable for both biomass producers and consumers.
“At the end of the day, something has to get implemented and it has to be practical enough that these projects can move forward, if the goal is really to increase energy from renewable sources,” Mendell says. “If that’s the goal, then you need to ask yourself, ‘How do these rules affect that?’”