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Energy & Clean Technology Article
JUNE 12‚ 2012
As EPA Considers How To Account for Biomass CO2 Emissions,
Massachusetts Offers Stringent Alternative
BY BRYAN M. STOCKTON
1
In 2007, Massachusetts saw itself in the center of the most important environmental lawsuit of the decade. In
response to the lawsuit from Massachusetts and other states, the Supreme Court held in Massachusetts v. EPA
that the Environmental Protection Agency (EPA) had to regulate carbon dioxide (CO 2) and other greenhouse gases
(GHGs) as “air pollutants” within the meaning of the Clean Air Act. Now, five years later, Massachusetts is again
stepping out ahead of the EPA in proposing an aggressive framework to account for CO 2 emissions from biomass.
As EPA implements Massachusetts v. EPA, assessing how to regulate CO2 from biomass sources has proven
enormously complex. The biomass industry argues that using biomass for power is carbon neutral, as new plant
growth can absorb the carbon emitted from combustion. Environmentalists in turn argue that using biomass should
not give a stationary source a green card to emit CO2, particularly because it can take many years for regrowth to
absorb the CO2 emitted from harvesting and combustion.
The EPA recently announced a three-year deferral of permitting requirements for carbon dioxide (CO2) from
biomass sources to allow more study. The deferral is optional for states, however, and states are split over whether
to follow the EPA’s approach. The agency’s internal scientific advisory board is also divided about how to account
for biomass CO2 emissions in pending permits. Massachusetts is at the same time progressing with its own
framework for how to account for CO2 emissions from biomass sources, and its proposal may affect the EPA’s
own result.
EPA Adopts Three-Year Delay for Further Study
The EPA originally proposed to treat stationary source CO2 emissions from biomass and fossil fuels equally. The
forest industry fought back, arguing that biomass CO2 emissions are carbon neutral over the long term. EPA
realized it had underestimated the complexity involved in accounting for the net atmospheric impact of biomass CO 2
emissions and acknowledged that “further consideration of this important issue is warranted.”
2
As a result, the agency reversed course last year and, effective July 20, 2011, deferred for three years the
application of the Prevention of Significant Deterioration (PSD) and Title V permitting requirements to biomass CO2
3
emissions from bioenergy and other stationary sources. Read the Final Rule here and the June 2011 Biogenic Fact
Sheet here.
The deferral does not apply to non-GHG pollutants or other non-CO2 GHGs (like methane) that result from the
combustion of biomass fuel. The types of biomass CO2 emissions covered under this deferral include “emissions of
CO2 from a stationary source directly resulting from combustion or decomposition of biologically-based materials
4
other than fossil fuels and mineral sources of carbon.” For stationary sources that combust fossil fuel and biomass
fuel (like municipal solid waste), only the biogenic portion of the CO 2 emissions are covered in the deferral. While
the deferral encompasses many forms of biogenic CO2, the controversy revolves around the use of forest products.
Biogenic CO2 emissions result from:
• Biological decomposition of waste in landfills, wastewater
treatment, or manure management processes; or the
combustion of biogas resulting from the above processes
• Fermentation of ethanol production
• Combustion of the biological fraction of municipal solid waste or
biosolids, or tire-derived fuel
• Combustion of biological material such as wood and wood
waste, forest residue, and agricultural material
During this three-year deferral period, EPA will be studying the science associated with biogenic CO 2 emissions
from stationary sources. The agency is not off to an auspicious start; earlier this year EPA’s biogenic accounting
framework came under fire from its own Science Advisory Board (SAB). The board suggested that the EPA could
not assume that biomass emits fewer GHGs overall than fossil fuels. In a draft report earlier this year the SAB
suggested the agency’s proposed framework was not scientifically rigorous.
5
Deferral Optional for Most States
6
In the interim, states are adopting different approaches. The inconsistency results because EPA clarified “that each
7
state may decide if it wishes to adopt the deferral.” According to the Final Rule, “states that do not wish to revise
their current permit programs do not need to make any program changes.”
8
Several states are including the deferral as a formal change to their state implementation plans (SIPs), which
describe how states will comply with federal clean air regulations. EPA recently proposed approving Virginia’s and
Missouri’s amended SIPs, which includes the deferral. EPA is also reviewing a similar revision from Mississippi.
New Hampshire and New York have initiated processes to implement the deferral.
Conversely, other states are not implementing the deferral.
9
Vermont recently issued a bioenergy permit that included a GHG limit, and it has another application in the queue.
The permit limits GHG emissions from the 30MW facility to just under 500,000 tons per year. The best available
control technology required in the PSD permit incorporates energy efficiency and good combustion practices,
supposedly making it comparable to new natural gas-fired facilities that have been issued PSD permits with
GHG limits.
Massachusetts Proposes Alternative, Stricter Accounting Framework
The Massachusetts Department of Energy Resources (DOER) recently proposed a more stringent accounting
framework that diverges from the EPA’s and incorporates arguments made by environmentalists. While
Massachusetts’s plan has a different purpose than the process for issuing Clean Air Act permits (the DOER plan
establishes how biomass can qualify for renewable energy credits under the Commonwealth’s renewable portfolio
standard), it creates a new framework to account for biogenic CO2 emissions.
The Commonwealth’s plan, released April 27, 2012, distinguishes between emissions from residues and whole
trees. Massachusetts’s framework was heavily influenced by a controversial Manomet Center for Conservation
Sciences study that found biogenic GHG emissions can exceed fossil fuel GHG emissions over the short and
medium term if whole trees are used instead of biomass residues.
10
The Manomet study explained that biomass
power was carbon neutral over the long-term, but that it could take over 40 years for certain biomass to result in
lower GHG emissions than coal-fired electricity, and up to 90 years for natural gas generation. The Massachusetts
plan favors biomass residue over whole trees, explaining, “While Residue sources tend to quickly return the carbon
deficit, Thinning material return only a small amount of the carbon deficit in the necessary 20-year time horizon.”
11
The DOER plan, open for 30 days of public comment starting May 19, has heartened environmentalists and
disappointed the biomass industry.
To qualify for any Renewable Energy Certificates (RECs) under the new plan, GHG-emitting facilities using biomass
in Massachusetts must utilize certified biomass (either residue or thinnings). An electronic Biomass Certificate
Registry will track and verify the use of Biomass Fuel Certificates, which remain bundled with the eligible fuel from
harvester/producer all the way to the generation unit.
12
Facilities must also achieve a 50% reduction in GHGs over 20 years compared to a natural gas-fired unit.
13
The
two-decade time horizon aims to establish carbon neutrality by allowing for an initial GHG increase when the
biomass is burned but then time for regrowth and carbon re-absorption. Facilities that met the 50% threshold are
eligible for a half REC; facilities must achieve a 60% reduction in order to obtain a full credit toward the Renewable
Portfolio Standards (RPS).
14
Generally, to reach the 60% threshold, facilities will have to utilize combined heat and
power (CHP).
The shorter time horizon adopted by Massachusetts significantly differs from the 100-year time horizon originally
envisioned by the EPA. The EPA’s own SAB criticized the 100-year timeframe as too long in the context of GHG
emissions, given that short-term emissions have more a significant impact on climate change than those decades in
the future.
15
The time horizon is not the only area where Massachusetts’s framework differs from the EPA’s approach. The
EPA’s GHG accounting framework currently does not distinguish whole trees from biomass residues. Instead, the
EPA’s proposal divides the nation into regions where a biomass facility could be considered carbon neutral if it is
situated in a region with expanding forests. Unlike the DOER plan, the EPA’s proposal currently lacks any efficiency
mandates for biomass plants.
Commonwealth Plan Could Impact EPA Debate
Massachusetts’s framework is at odds with the EPA’s approach to date. Environmentalists hope that the
Massachusetts plan will influence the federal process, given the SAB’s dislike of the EPA’s current proposed
framework. Specifically, environmental groups want the EPA to adopt some of the features of the DOER plan, such
as distinguishing between whole trees and other residues and linking biomass-using facilities to their sustainable
feedstock supplies. The biomass industry, which disputes that valuable lumber-grade trees would even be used for
power, wants a simpler nationwide system. Still the Massachusetts approach has encouraged environmental
groups, and they can be expected to advocate that the EPA move closer to the state’s model. The SAB will
discuss the matter further on a conference call in late May, and board members are likely to be familiar with the plan
by then.
In a lengthy draft report released May 9, the SAB encourages EPA to reconsider its initial framework and offers
several alternatives. The draft report mentions the Massachusetts plan as an example of how to certify biomass
feedstocks. The SAB draft does not endorse the DOER plan but merely highlights it as one of many possible
approaches. The report also recognizes the difficulties in balancing scientific accuracy with ease of implementation.
It remains to be seen to what extent the EPA or the SAB will be swayed by Massachusetts’s framework. It took
a lawsuit from Massachusetts to get the EPA to this point, but the agency will have to go the rest of the way
on its own.
***
View Mintz Levin’s Energy & Clean Technology professionals.
Endnotes
1
Mass. v. Envtl. Prot. Agency, 549 U.S. 497 (2007).
2
Deferral for CO2 Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant
Deterioration (PSD) and Title V Programs, 76 Fed. Reg. 43490, 43492 (July 20, 2011) (amending 40 C.F.R. pts. 51, 52, 70
and 71).
3
The PSD Program reviews pre-construction proposals and permits new major stationary sources” and “major
modifications at existing major stationary sources. Permits issued under the Title V program set operating requirements to
ensure sources comply with Clean Air Act thresholds.
4
Deferral for CO2 Emissions, 76 Fed. Reg. at 43493.
5
Dawn Reeves, EPA Advisers Struggle to Agree On CO2 Accounting Method for Biomass, INSIDE EPA, Jan. 31, 2012.
6
Technically, in SIP-approved states, the deferral has little effect until a state adopts the change either in statute or in an
administrative rule, and the change is approved by the EPA. In “delegated” states where the PSD and Title V permit
programs are implemented by the EPA, the federal rule took effect July 20, 2011 without any state action. Such delegated
states are Massachusetts, New Jersey, District of Columbia, Washington, Illinois, and Minnesota. See U.S. ENVTL. PROT.
AGENCY, http://www.epa.gov/nsr/where.html (last visited April 30, 2012).
7
Deferral for CO2 Emissions, 76 Fed. Reg. at 43500.
8
Id.
9
State of Vt. Agency of Natural Res., Air Pollution Control Permit to Construct (AP-11-015), Feb. 10, 2012. See
http://www.mintz.com/newsletter/2012/Advisories/1898-0512-NAT-ECT_Stockton/Beaver Wood permit.pdf.
10
See MANOMET CTR. FOR CONSERVATION SCI., BIOMASS SUSTAINABILITY AND CARBON POLICY STUDY
(2010), available at http://www.manomet.org/sites/default/files/Manomet_Biomass_Report_Full_LoRez.pdf.
11
See MASS. DEP’T OF ENERGY RES., BIOMASS ENERGY RULEMAKING, SUMMARY OF PROPOSED FINAL
RULEMAKING [225 CMR 14.00], 2 (April 27, 2012).
12
Id.
13
Id.
14
Id.
15
Reeves, supra note 5.
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