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UK Sustainability Criteria Provide Policy Certainty

By Seth Ginther | September 23, 2013

The recently released U.K. Department of Energy & Climate Change criteria for the sourcing of sustainable biomass recognize the robust sustainability practices of U.S. industrial wood pellet manufacturers and provide much needed policy certainty that will help grow U.S. manufacturing. U.S. producers will be able to use a number of long-standing forestry certifications, as well as techniques such as regional risk assessments to prove sustainability. 


Implementation of the new DECC criteria begins with reporting in April 2014, becoming mandatory a year later for electrical generators with capacities of 1 MW and above. Generators must demonstrate they are meeting the criteria for the U.K. Renewables Obligation and independent audits of the sustainability report are required.


To ensure that biomass power delivers genuine greenhouse gas (GHG) savings and to promote good practice and innovation across the supply chain, the U.K. will bring in tightening GHG life-cycle trajectories. In a series of steps over time, it will require industry to achieve larger savings than the current 60 percent emission reduction compared to the EU fossil electricity average.   


Before April 2020, existing biomass power, cofiring and conversions, with and without combined heat and power will remain on the current target of 285 kilograms of CO2 equivalent per megawatt hour (kg CO2eq per MWh) to reflect long-term contracts already in place. New dedicated biomass facilities, however, will be subject to a 240 kg CO2eq per MWh target (a 66 percent saving) to reflect the higher cost of carbon savings.


After April 2020, all biomass power generators will be placed on the same GHG trajectory with a 73 percent savings target of 200 kg CO2eq per MWh in 2020 and a 75 percent savings target of 180 kg CO2eq per MWh in 2025. The tougher GHG targets will be applied as an annual average (subject to a ceiling) to allow generators to better manage procurement risks.


Currently, RO land criteria are designed with sustainable agriculture in mind, rather than forests. The new sustainable forest management criteria are based on the U.K. timber procurement policy (UK-TPP) which draws on established sustainable forest certification schemes that cover a range of social, environmental and economic issues relating to forests.


To enable investment in new biomass power generation and biomass feedstock supply-chains, the U.K. will not change the sustainability criteria before 2027. It reserves the right to make changes in response to European Commission recommendations on bioenergy, or to EU and international law.
The final DECC sustainability criteria for solid biomass reaffirm that industrial wood pellets sourced from the U.S. will play a key role in providing the U.K. (and the EU) with an abundant, sustainable and carbon beneficial energy source that provides consistent base-load renewable power.


The criteria recognize that forest cover and carbon sequestration are steadily increasing in the United States. The U.S. has more than 750 million acres of forest and the net volume of trees per acre has increased in all regions for more than 50 years. Moreover, the total acreage of forestland in the U.S. is within 1 percent of what it was 100 years ago. In the Southeast, where the largest supply of wood pellets shipped to Europe is produced, the net volume of trees per acre has increased 94 percent since 1953, meaning net growth has exceeded removals on a consistent and long-term basis. Forest carbon sequestration in the U.S. has increased 31 percent in two decades, from 701 million metric tons in 1990 to 922 million metric tons in 2010. U.S. forests capture more carbon than the annual emissions produced by the United Kingdom and Spain combined.


These impressive statistics are made possible because forests remain working in the U.S. Robust markets incentivize landowners in the U.S. to not convert forests into real estate developments, golf courses and the like. The industrial wood pellet industry provides landowners with a much-needed market for low-grade fiber and contributes to continuing to keep U.S. forests working, which in turn guarantees greater carbon sequestration. That is inarguably a net positive in the global battle against climate change. With policy certainty now in place in the U.K., the U.S. industrial wood pellet market is poised for growth. 

Author: Seth Ginther
Executive Director
U.S. Industrial Pellet Association
804-771-9540
sginther@hf-law.com

 

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