Biomass industry heads discuss priorities, challenges, at IBCE

By Anna Simet | April 09, 2013

The emphasis of the April 9 International Biomass Conference & Expo general session in Minneapolis could be summed up in one word: policy.

The industry segment directors’ roundtable was focused on the legislative landscape and market growth and opportunities, and each speaker discussed near- and long-term challenges and goals of their respective biomass sector.

Bob Cleaves, president of the Biomass Power Association, began the conversation by stating that low natural gas prices are affecting biomass power development in some U.S. regions, but not everywhere. “Natural gas is a great story, but it’s not a panacea,” Cleaves said. “In certain parts of the country it’s not even available; in the Northeast the infrastructure doesn’t really support it…”

On market growth, Cleaves pointed out that everything in the biomass power industry happens in seemingly slow motion; it takes years to develop projects, and recently completed or nearly complete projects were began back when natural gas prices were around $14 and 1603 Treasury grants were available. “We don’t have those things anymore. Do I still think there’s great opportunity? Yes, but it’s challenging.”

Cleaves said there has to be more defensive and offensive playing by the industry, emphasizing the importance of the U.S. EPA correctly figuring out the biomass carbon accounting equation. “If we don’t get that right, those retiring coal plants won’t be converted to biomass…”

The production tax credit, and the U.S. tax policy in general, doesn’t work for biomass right now, Cleaves added. “If we really want to incentivize this industry, we need to do a lot better in tax policy.”

Michael McAdams, president of the Advanced Biofuel Association, followed Cleaves, beginning by stating that at no point in the eight years he has been involved in the advanced biofuel industry has it faced greater challenges in Washington D.C. than it is now up against. “I thought the way the election went, with the Obama administration being very strong on behalf of renewable energy at large, that I would see a little backpedaling…this morning, Congress introduced legislation to repeal the renewable fuel standard across the board, and there’s nothing more important to us than the RFS.”

McAdams encouraged the attendees to contact Senators and members of Congress to emphasize that the RFS is essential to the industry, which is a real, live industry, despite what some critics say. “Some refer to us as unicorns and fairy dust…we are real, we are making real gallons that are performance driven and hit original specs. There are 75,000-gallon facilities standing up today, and more coming online this year…Congress and Senate members need to hear from you, or we may not have a meeting like this in two years.”

Following McAdams, the Algae Biomass Organization’s Executive Director Mary Rosenthal shared progress that the algae industry made over the years, first by displaying a test tube photo of algae that she presented to others in the past; then a photo of a company growing algae on a large scale in outdoor raceway ponds.  

After providing several examples of operating algae-based fuel production facilities that have reached milestones, Rosenthal agreed with McAdams on the challenges the advanced biofuel industry faces. She said, however, that she expects positive trends in algae developments to continue, evidenced by the ABO’s annual survey, for which the organization asked 400 producers across the country the same set of questions about what they expected during the next few years.  “Two-thirds of producers said they expected to increase production in 2013 at either existing or new facilities, and nine out of 10 facilities believe that algae-based fuels can be price-competitive by 2020."

Next, the U.S. Industrial Pellet Association’s Executive Director Seth Ginther shined some light on how European policy has been driving U.S. pellet export industry growth over the last 18 months, and also how U.S. policymaking In regard to biogenic emissions may dictate the E.U.’s stance on carbon emissions from pellet imports in the future.

Ginther said USIPA has made a concerted effort in the past year to form alliances with other domestic biomass organizations to address the biggest policy challenge that industrial wood pellet producers face: carbon debt. “We’ve been doing a lot of good work on this issue, and success in the U.K. is proof of that,” Ginther said. “As we move through policy framework over the next 12 months, that [carbon accounting] will be the debate in Europe. What’s going on in the U.S., specifically with the EPA’s carbon accounting, is extremely important to us. We have to get that right here, because if we don’t, we’ll walk into a European policymaker’s office dispelling the notion of carbon debt, and the last thing we want to hear is that ‘your very own U.S. government thinks otherwise.’ It could have a significant impact on our market.”

The Biomass Thermal Energy Council’s Executive Director Joseph Seymour said that BTEC’s most significant goal is helping people realize the “forgotten third of energy consumption,” and mentioned some specific organization priorities and projects. “We see opportunities to work with the building sector—architects and engineers—to help them feel more comfortable specifying biomass thermal equipment, and that’s why BTEC will beginning a consensus commercial class biomass boiler efficiency measure this year, in order to help open those doors to the broader engineering space.

For the most part, Seymour said, biomass thermal has been competitive with heating oil and natural gas markets at homes and businesses, without tax incentives, though getting tax parity with other renewables is a goal. “We’re not in Section 48, we have a small credit in Section 25…this year, there’s a strong focus on a 30 percent tax credit for residential biomass heating systems to bring them on par with solar, thermal and geothermal. On the commercial side, there’s the 30 percent investment tax credit."

And of course, Seymour added, the EPA’s biogenic emissions ruling presents a challenge for the biomass thermal industry.

Day two of the International Biomass Conference & Expo (April 9) will continue with two sets of breakout sessions focused on biomass heat and power, pellets and densified biomass, biogas and advanced biofuels and biochemicals.