Industry talks lows, highs, opportunities at biomass conference

By Anna Simet | April 12, 2016

Low oil and power prices and a warm winter are the predominant reasons that it’s been a challenging year for every sector of the biomass industry. Association leaders participating in the International Biomass Conference & Expo general session discussion didn’t skirt around that fact, but they also shined some light on promising solutions to the problems faced and highlighted each sector’s bright spots.

The Clean Power Plan and a push for renewed tax credits were emphasized during the panel, fronts that the usually-fragmented industry have united on. Bob Cleaves, president of the Biomass Power Association, said the U.S. EPA’s recent workshop focused on biomass in the CPP—which was held despite the CPP’s current legal limbo—was encouraging, and conveyed a strong message that biomass can play an important role in state implantation plans (SIP). The question is how states will define biomass, and for those who choose not to craft their own SIPs, that job will be left up to the EPA, which recently put out a rulemaking to determine which types of biomass should be included. “That is a really bad approach…the idea the EPA could be the arbiter of what are acceptable types of biomass,” Cleaves said.

Cleaves pointed out that there are currently 37 different state definitions of biomass, and 17 different definitions at the federal level, and recommended that EPA pull the definition of open-loop biomass as defined under Section 45 of the Internal Revenue Code.

All panelists urged industry stakeholders to call their senators to request an extension of the Section 45 production tax credits, as they are set to expire at the end of the year. There is good opportunity to get the extension included in the Federal Aviation Administration Reauthorization Act, which is likely to be considered by the Senate within a week.

Also having potential for inclusion in the FAARA is the BTU Act, said Dan Wilson, board chair of the Biomass Thermal Energy Council, who reminded attendees that biomass thermal has faced an unlevel playing field with other renewables for many years, and pointed to the BTU Act as a means of rectifying the discrepancy. “This is the time to make the push, and I can’t state enough what a big deal this is for the industry.”

Patrick Serfass, executive director of the American Biogas Council, said there have been and are some sector challenges, but also some high highs. The biogas industry has been challenged by the low price paid for power produced by biogas-based electricity projects, and regulatory issues surrounding getting upgraded biogas into the pipeline and electricity to the grid, but there has been a push toward more organics recycling and other favorable policies that are providing some opportunity for growth, as well as an increasing number of companies joining ABC. “There is plenty of opportunity to engage and do things, luckily we’re seeing a growth in the industry, but there’s a lot more for us to do,” he said.

Stephen Faehrner, chairman of the Pellet Fuels Institute, said besides the major dip in demand due to the warm winter, the domestic pellet industry faces some regulatory challenges, including the New Source Performance Standards, which PFI worked with the EPA on for many years but still resulted in some confusing and challenging language. On positives, he said that many states in this country that have done a lot to try to help biomass thermal, pecifically pellets or stoves. “More states are beginning to recognize biomass…Maryland has a biomass directory and a program manager….23 states have some form of program to help folks get a wood or pellet stove. It’s something that’s really encouraging.

Seth Ginther, director of the U.S. Industrial Pellet Association, discussed the Sustainable Biomass Partnership, saying it’s off to a great start and seeing some success, as well as an initiative to secure government funding to allow the conversion of Drax’s final unit to biomass, which he said would provide some great opportunity for the industry. He also touched on USIPA’s strategy to start thinking long-term, and how the industry will navigate a subsidy-free environment. The International Biomass Conference & Expo continues through April 12 in Charlotte, North Carolina.