As EPA Considers How To Account for Biomass CO2
Emissions, Massachusetts Offers Stringent Alternative
June 12‚ 2012
By
Bryan M. Stockton
In 2007, Massachusetts saw itself in the center
of the most important environmental lawsuit of the decade.1
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 (CO2) 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 CO2
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.
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 CO2
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
emissions from bioenergy and other stationary sources.3
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 other than fossil fuels and mineral sources of
carbon.”4
For stationary sources that combust fossil fuel and biomass fuel
(like municipal solid waste), only the biogenic portion of the
CO2 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:
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Biological decomposition of waste in
landfills, wastewater treatment, or manure management
processes; or the combustion of biogas resulting from
the above processes
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Fermentation of ethanol production
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Combustion of the biological fraction
of municipal solid waste or biosolids, or tire-derived
fuel
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Combustion of biological material such
as wood and wood waste, forest residue, and agricultural
material
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During this three-year deferral period, EPA will
be studying the science associated with biogenic CO2
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
In the interim, states are adopting different
approaches.6
The inconsistency results because EPA clarified “that each state
may decide if it wishes to adopt the deferral.”7
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.
Vermont recently issued a
bioenergy permit9
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.
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.
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.
* * *

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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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