A single Northeastern US state is preparing to miss out on growing export markets for woody biomass fuel production due to pending new regulation designed to lower carbon emissions. The decision would be a departure from the design of most regulations and markets designed to prevent global warming in Europe and the US.

Massachusetts is poised to adopt a regulation which, according to biomass experts, would keep forest products on the renewable energy sidelines.

State definitions of biomass vary, but they all list forest-thinning and harvesting residues, such as tree tops, limbs, and salvageable deadwood, as qualified boiler fuels.

Massachusetts, however, is the only state to conclude that biomass leads to a net increase in atmospheric carbon. The Department of Energy Resources says its proposed, RPS Biomass Regulation would support the state’s Clean Energy and Climate Plan, which directs the state to slash 1990 levels of carbon emissions 80% by 2050.

The regulation reflects “careful consideration of how woody biomass should qualify for the state [renewable portfolio standard] in a manner that is consistent with the Commonwealth’s commitments to reduce greenhouse gas emissions and protect the broad range of human and ecological services of the forests,” says DOER.

To that end, the regulation would require biomass plants to operate at 60% efficiency to qualify for a full, renewable energy certificate. (Plants operating at 50% efficiency would qualify for “half” REC’s).

Read more about state renewable portfolio standards and how they interact with federal regulations here.

But the standard means “only combined heat and power systems could qualify” for REC’s, Bob Cleaves, president of the Portland, ME-based Biomass Power Association, told Breaking Energy. He added that a McHale & Associates study determined that “no biomass-to-electricity plant in the world could meet that standard” without co-generating thermal energy.

While plant developers “would love to do that from a business standpoint,” said Cleaves, “when you’re in rural areas [where chip production is co-located with forestry operations] you don’t have nearby cities or industrial facilities as steam hosts.”

The Economics of Water Weight

The rule would also set rigorous harvesting limits on forest residues. The limits are specified as percentages of total forestry harvests by weight: in forests with poor soils, the limit is zero; in forests with good soils, the limit is 25%-to-30%. But the limits mean biomass plants would have to source a greater volume of wood chips from further away, which is uneconomical because about 45% of their weight is water.

If the regulation is promulgated without major changes, Massachusetts “will be the only government we know of anywhere in the word to effectively deem biomass electricity as a non-qualifying resource,” Cleaves told DOER in a letter dated June 18 – the last day of the public comment period.

The letter, which has 53 signatories, also notes that biomass “provides more than 30% of the nation’s non-hydroelectric renewable energy supply,” and that “virtually every state and territory with [an RPS mandate] considers biomass as ‘renewable.’”

Currently, there is only one biomass plant in Massachusetts – a 17 MW unit in Fitchburg. However, as recently as 2010, there were four or five proposals for biomass plants on the western side of the state. But the biomass regulation would threaten the financing prospects for those plants, Eric Kingsley, vice president of Antrim, NH-based Innovative Natural Resource Solutions, told Breaking Energy.

“I’ve always thought of the forest-product markets as one of the most important tools for forest conservation,” Kingsley said, “and it’s unfortunate that this singular focus on counting carbon from the moment of harvest forward will take that market away from western [Massachusetts], where it’s pretty needed.”

Kingsley was referring to the “Biomass Sustainability and Carbon Life Cycle Study” by the Manomet Center for Conservation Science.

The Carbon Clock Ticks On

DOER, which commissioned the study, interpreted the study findings to mean that “the carbon clock starts at the moment of harvest without acknowledging that forest lands have been building their carbon accounts for decades. A tree is harvested: how long does it take to grow back [and sequester carbon]? It’s an interesting question, but irrelevant. It literally stares at the trees and misses the forest.

“The real threat to forests and their carbon benefits,” Kingsley continued, “and this is a flaw in the way DOER looks at the report, is [housing and commercial] development – not forest-residue harvests.”

Kingsley says that “the winds had changed long before Manomet. The administration went from pushing fairly hard for biomass projects in western []Massachusetts to doing everything they could to stop them.”

Part of the reason the change was the backlash against the biomass proposals, which was driven, in part, by the misperception that forests might be harvested solely for chips and pellets.

But “the idea that the biomass industry is causing deforestation is completely contrary to what everyone agrees are much healthier forests than 100 years ago, when we had no biomass plants and the New England landscapes were barren pasturelands because of rampant logging,” said Cleaves. “Our forestry practices today, including residue harvesting, support sustainable forestry.”

Outside of Massachusetts, the prospects for biomass plants are much brighter.

For example, in March, Virginia approved a Dominion Virginia Power request to convert three of its coal-fired plants into 51 MW chip-burners. Last month, Washington state added biomass to its list of RPS-eligible fuels. And, in Nacogdoches, Texas, Southern Company is about to bring on-line a new, 100 MW plant that will burn 1 million tons of chips per year.

Meanwhile, the Southeast is still shipping boatloads of wood pellets to Europe, which, unlike Massachusetts, regards biomass as carbon-neutral.

In fact, European demand for pellets (which are produced from slightly higher-value materials than those used for chips) will remain stable as long as those nations maintain their carbon-tax exemption for biomass, which is co-fired with coal to power electric-utility boilers.

In the US, the pellet market will remain flat “until there’s a wave of [pellet-fired boilers] installed in commercial spaces, like strip malls, and other medium spaces, like schools, where you could pay off the capital costs in two or three years.” Kingsley said.