What’s in Store for Biomass Power in 2022

The Biomass Power Association has several main policy objectives for the new year.
By Carrie Annand | February 03, 2022

Happy New Year to all in the biomass power sector.Turning the calendar to 2022, this is an ideal time to look ahead at policy that could affect biomass in the new year. The following are some priority policy objectives the Biomass Power Association is focusing on.

The Renewable Fuel Standard: Will 2022 finally be the year that we see movement on eRINs? The RFS is always at the top of our minds, and that goes double for 2022. We are cautiously optimistic that we will see the U.S. EPA begin to take action on including electricity in the RFS this year, for a few reasons. One is that senior agency staff told us at a meeting last year that we could expect to see a rulemaking process as soon as early in 2022, and another reason is that the statutory requirements for fuel volumes set by Congress when it passed the RFS2 law in 2007 end in 2022. This means that the EPA will need to do what is called a “reset” for 2023, and the agency will be responsible for setting the volumes going forward, rather than adjusting them based on the targets that Congress originally set. The reset offers an opportunity for the EPA to make changes to the program and would be a natural time to set the rules for electricity inclusion.

The Build Back Better Act: Will it pass, and what will its energy and tax provisions look like? The BBB Act appears to be unlikely to pass in its current form, since it has been a struggle to get all the Democratic senators on board. However, the draft did have some important provisions for biomass, including a long-term extension of tax credit eligibility and significant funding for forest management and wildfire risk reduction. It’s possible that the bill will be broken down into smaller, issue-specific pieces. There will be a lot of pressure on Democrats to pass an environmental/climate package, particularly to extend renewable tax credit eligibility, which ended for many technologies on Dec. 31.

Carbon capture adoption: How will the infrastructure bill’s $750 million carbon capture grant program be administered? The infrastructure bill signed by President Biden in November contains considerable funding for carbon capture adoption. The U.S. DOE will oversee the program and will likely introduce some rules for grant applications and eligibility sometime this year. Many BPA member companies are interested in exploring carbon capture adoption, but so far, the cost of the technology has caused it to remain infeasible. The grant program, assuming it includes biomass, may be a way to start capturing carbon at biomass power facilities. This would represent a new revenue stream in the form of credits for carbon captured, stored or utilized, and potentially open the door for biomass power facilities to participate in government programs where carbon intensity requirements have so far prevented it.

Infrastructure spending: How will the billions allotted to the USDA and U.S. Forest Service for forest management and wildfire risk reduction be spent? The USDA and its agency, the USFS, received billions of dollars in the infrastructure bill to ramp up forest treatments and wildfire risk reduction. This includes some $400 million in funding for grants to so-called “wood-processing facilities” that take on materials cleared from high-risk forests, and another $100 million program for biochar production. We are interested to see the USDA and USFS announce the rules of these programs and help our members participate where they are eligible.

We welcome any interested biomass power facilities who are not yet members of BPA to contact us to learn more about the programs we’re monitoring and how they could result in more revenue. We look forward to seeing many of you in Jacksonville, Florida, at this year’s International Biomass Conference and Expo, March 14-16.

Author: Carrie Annand
Executive Director, Biomass Power Association
[email protected]