U.S. EPA to defer GHG requirements for biomass

Jan. 13, 2011, Washington, D.C. – The U.S.
Environmental Protection Agency (EPA) is planning to defer, for three years,
greenhouse gas (GHG) permitting requirements for carbon dioxide (CO₂) emissions
from biomass-fired and other biogenic sources. The agency intends to use this
time to seek further independent scientific analysis of this complex issue and
then to develop a rulemaking on how these emissions should be treated in
determining whether a Clean Air Act permit is required.

“We are working to find a way forward that is scientifically sound and
manageable for both producers and consumers of biomass energy,” says EPA
administrator Lisa Jackson. “In the coming years we will develop a common sense
approach that protects our environment and encourages the use of clean energy.”

By July 2011, EPA plans to complete a rulemaking that will defer permitting
requirements for CO₂ emissions from biomass-fired and other biogenic sources
for three years. During the three-year period, the agency will seek input on
critical scientific issues from its partners within the federal government and
from outside scientists who have relevant expertise. EPA will also further
consider the more than 7,000 comments it received from its July 2010 Call for
Information, including comments noting that burning certain types of biomass
may emit the same amount of CO₂ emissions that would be emitted if they were
not burned as fuel, whereas others may result in a net increase in CO₂
emissions. Before the end of the three-year period, the agency intends to issue
a second rulemaking that determines how these emissions should be treated or
counted under GHG permitting requirements.

The agency will also issue guidance shortly that will provide a basis that
state or local permitting authorities may use to conclude that the use of
biomass as fuel is the best available control technology for GHG emissions
until the agency can complete an action on the three-year deferral in July.

In a separate but related letter, EPA is notifying the National Alliance of
Forest Owners that it will grant its petition to reconsider the portion of the
May 2010 tailoring rule that addresses the same issue.

CO₂ emissions from biomass-fired and other biogenic sources are generated
during the combustion or decomposition of biologically based material. Sources
covered by this decision would include facilities that emit CO₂ as a result of
burning forest or agricultural products for energy, wastewater treatment and
livestock management facilities, landfills, and fermentation processes for
ethanol production.

On January 2, 2011, air permitting requirements began for large GHG-emitting
industries that are planning to build new facilities or make major
modifications to existing ones. These facilities must obtain air permits and
implement energy efficiency measures or, where available, cost-effective
technology to reduce their GHG emissions. This includes the nation's largest
GHG emitters such as power plants and refineries. Emissions from small sources
such as farms and restaurants are not covered by these GHG permitting
requirements.

Move not legal?

Jan. 20, 2011 – In more recent news, former
EPA officials warn that the EPA’s proposed delay on biomass permitting
requirements for CO₂ emissions might not be legal.

The deferral is likely to be challenged in
court and could open up a “Pandora's box” of litigation, says Jeff Holmstead, a
lawyer at Bracewell Giuliani who formerly directed EPA's Office of Air and
Radiation.

But not everyone in the industry thinks the
ruling is negative. Under the announcement, coal plants using biomass as a
co-fuel would not count CO₂ from burning biomass to determine whether they
require a Clean Air Act permit. “We believe EPA's plan is a step in the right
direction,” says Southern Co. spokeswoman Valerie Hendrickson. Southern has
several biomass-fuelled or biomass co-fired projects in the works, including
the 100-MW Nacogdoches facility under construction in Sacul, Texas, and a
biomass conversion of the 96-MW Plant Mitchell near Albany, Georgia.

New greenhouse gas permitting requirements
took effect in the United States on 2 January, 2011, mandating that all new
sources or facilities making major modifications obtain air permits if they
emit 75,000 tons/year or more of CO₂. Those facilities must obtain air permits
and implement efficiency measures or, where available, install technology to
reduce emissions, EPA says.

EPA will issue guidance “shortly” for state
or local permitting authorities to determine whether biomass as a fuel can
qualify as best available control technology for greenhouse gas permitting, the
agency says. That guidance will serve until the agency issues its final rulemaking
on the three-year deferral in July.