The Biomass Industry Expands Across the South, Thanks in Part to UK Subsidies. Critics Say it’s Not ‘Carbon Neutral’

When a British company decided two years ago to locate a wood pellet manufacturing plant in North Carolina’s Robeson County, with its large Black and Indigenous population, it came as no surprise to Shalonda Regan.

Regan lives in Lumberton, two miles from where Active Energy Renewable Power has been working to convert a former textile mill into a plant that turns wood chips into pellets that the company says can be burned as a renewable fuel alongside coal or as a coal substitute. 

“In my part of town, I would say there is just a lack of knowledge when it comes to things that could possibly harm us, or affect our health,” said Regan, a youth tutor and construction project manager who has joined a lawsuit against the company.

“Our literacy rate is pretty low. The poverty rate is high. It just felt like it was selected strategically,” she said. 

The company’s chief executive officer, Micheal Rowan, told residents in a recent opinion piece in The Robeson, the local newspaper, that “we intend to be a positive force in the community” by creating jobs and economic development. 

Environmental justice and climate advocates see Lumberton as among the newest battlefields in an international fight over biomass fuels and global warming that has only grown more intense this year in the run-up to the Conference of the Parties (COP26), the United Nations-led climate negotiations next month in Glasgow. 

The talks will be hosted by the United Kingdom, a world leader in the environmentally controversial practice of burning biomass for electricity. The U.K. gets much of its biomass in the form of wood pellets from the Southeast as part of its declared pathway to a net-zero carbon emission future. 

U.S. biomass advocates say that only 2 percent of the forests in the South are harvested every year, leaving 98 percent in various stages of regrowth. Those new trees are more than enough to offset all the carbon dioxide that gets released when wood pellets are burned to produce electricity, they say. And because forest land in the South is primarily privately owned, they say the best way to make sure it remains forested is for landowners to make money from wood products, instead of selling the land for development. 

But the wood pellet industry in the Southeast has triggered an environmental justice backlash.  

Environmentalists in the U.S. have been teaming up with their counterparts in the U.K. to pressure politicians to end lucrative subsidies to Drax, a major British utility and wood pellet burner and producer that they see as a key driver of the booming wood pellet industry in the South. 

As part of a “Cut Carbon Not Forests” campaign, groups like the U.S.-based Southern Environmental Law Center, the Natural Resources Defense Council and Dogwood Alliance are working with U.K.-based Biofuelwatch and others to try to short circuit that company’s plans to advance carbon capture and storage technology on power plants that burn the wood product.

The activists have also been working to change European Union and U.K. policies that treat burning biofuels as carbon neutral. Those policies, they say, harm biodiversity and lead to air pollution and flooding in communities of color where trees are cut down and pellets are produced.  

Environmental advocates who work on biomass policy said they doubted that negotiators at COP would focus much on wood pellets or bioenergy specifically. Instead, they said, the official discussions will more likely relate to Article 6 provisions of the Paris agreement and the international trading of carbon credits as nations work toward their commitments to achieve carbon neutral economies by 2050. 

Emissions trading allows climate polluters like oil companies and airlines to offset their carbon emissions by purchasing credits in green industries that emit less carbon dioxide or suck an equivalent amount out of the atmosphere, like wind farms or forests. 

Adam Colette, program director for Dogwood Alliance, a North Carolina-based forest conservation group that operates in the Southeastern United States, sees a connection between the allowance of offsets and emissions trading, in which the numbers often don’t add up, and government policy that effectively considers the practice of burning wood pellets to make electricity as carbon neutral, even though scientists have shown it can emit more greenhouse gases than burning coal.

“Wood pellets and the international wood pellet market is the most visceral example of everything that is wrong with that,” he said.

At Least Theoretically, Wood Pellets Can Be Carbon Neutral

Nobody disputes that trees can be a renewable resource, that harvested trees or forests can regrow—and that at least theoretically, burning wood can be carbon neutral. Carbon emissions that are released when wood is burned can be offset by the carbon dioxide that trees take up during the process of photosynthesis. 

But hundreds of scientists around the world have been arguing that biofuels policies and practices are often far from climate friendly, and that European subsidies propping up the industry are, in fact, dangerous. While the industry generally maintains that it only uses wood waste or low-value trees to make pellets, critics have issued reports with photographs that they say show destructive logging practices and the conversion of entire trees to wood pellets. 

The argument centers on how quickly new tree growth can absorb the carbon dioxide that’s emitted from power plants that burn wood pellets, given an increasing sense of urgency over the speed with which global greenhouse gas emissions must be reduced to avoid the worst effects of global warming.

“Burning wood puts more carbon dioxide in the air right now, today, with certainty, than the fossil fuels you were burning,” John Sterman, a professor of management and engineering at the Massachusetts Institute of Technology, told Inside Climate News. To solve the climate crisis, he said, “emissions from fossil fuels need to go down rapidly, but it is equally important to keep the carbon in forests on the land.”

Sterman is among more than 500 scientists who earlier this year signed a letter to U.S. President Joe Biden, European Union Commission President Ursula von der Leyen, European Council President Charles Michel, Japanese Prime Minister Yoshihide Suga and President Moon Jae-in of South Korea warning about wood burning for electricity generation.

Bluntly, the scientists including Peter Raven, director emeritus of the Missouri Botanical Society and former President of the American Association for Advancement of Science, wrote: “Trees are more valuable alive than dead both for climate and for biodiversity. To meet future net zero emission goals, your governments should work to preserve and restore forests and not to burn them.”

The scientists maintain that subsidies have escalated tree harvesting for energy production at a rate that is creating a “carbon debt” that eventually might be paid back by regrowth—but not nearly fast enough. In 2018, Sterman was lead author of a scientific paper published in Environmental Research Letters that said the time frame was as long as 104 years, depending on forest type.

“Regrowth takes time the world does not have,” the scientists argued in their recent letter. Numerous studies, they pointed out, have shown that “this burning of wood will increase warming for decades to centuries. That is true even when the wood replaces coal, oil or natural gas.”

In a report made public on Thursday, the London-based think tank Chatham House and the Woodwell Climate Research Center in Massachusetts, formerly the Woods Hole Research Center, concluded that U.S.-sourced wood pellets burned for energy in the U.K. were responsible for 13 million to 16 million metric tons of carbon dioxide emissions, almost none of which are included in that country’s official greenhouse gas inventory. If they were, this would have added between 22 and 27 percent to the emissions from U.K. electricity generation, or 2.8 to 3.6 percent of total U.K. greenhouse gas emissions in 2019—roughly the same as the annual greenhouse gas emissions from as many as 7 million passenger vehicles, according to the report.

The Joint Research Centre of the European Commission earlier this year acknowledged the biomass controversy, describing it as “toxic” among scientists. In a report titled, “The use of woody biomass for energy production in the EU,” the research centre maintained that wood-based bioenergy has the potential to help the world’s climate and biodiversity crises. But the report also concluded that subsidies can “shift the balance towards undesirable outcomes” such as excessive wood burning. It recommended new sustainability legislation, including sustainability criteria for imported wood pellets, such as those from the United States.

U.K. Defends its Wood Pellet Subsidies 

If world leaders aren’t going to get down in the weeds of biofuels energy policy at COP26, environmental advocates expect those discussions will occur outside the official meetings. Climate conferences typically attract a full range of observers, including businesses, industry representatives, environmental advocates, religious leaders and protesters, all attempting to influence the public and public officials.

Environmental advocates in the United States and the United Kingdom, for example, are bracing for Drax, the U.K. company that’s driving demand in the South for wood pellets, to further push its plan for what’s called “bioenergy carbon capture and storage,” often referred to in shorthand as BECCS, as a way to achieve what the company calls “negative carbon emissions.”

BECCS would use technology to capture carbon dioxide emissions from a biomass power plant before they enter the atmosphere and store them underground. 

A new report from the U.K.-based think tank Ember notes that per kilowatt hour, burning wood pellets emits more carbon dioxide than burning coal, helping to make Drax the U.K.’s largest single source of carbon dioxide emissions. Ember previously found that Drax received more than £800 million in subsidies last year and is on pace to receive £10 billion in subsidies between 2012 until 2027, when the financial support is to run out.

The environmental groups expect Drax to use the COP “as an opportunity to present (BECCS) and also to put more pressure on the government to do some further subsidies,” said Almuth Ernsting, co-director of the U.K.-based environmental advocacy group, Biofuelwatch. “We are working with our allies to try to counter that spin.”

“What we are concerned about and what we really want to prevent,” Ernsting said, “is Drax from getting massively positive PR in the media, portraying themselves as the pioneers of carbon negative energy because what they are doing, in terms of burning huge quantities of wood, which is anything but low carbon. And they do not have any real world experience or the know-how of capturing CO2 on a large scale.”

In fact, the company, which disputes claims by scientists that its wood-pellet burning is anything but carbon neutral, acknowledges it’s touting BECCS in the run-up to COP 26. It is also openly making a case for subsidies by advocating for “an effective negative emissions policy and investment framework from government” to get the technology up and running on two of its biomass generating units by 2030.

In June, after experimenting with two pilot programs, the company announced an agreement with Mitsubishi Heavy Industries Engineering, Ltd., for carbon capture technology at what it described as “the largest deployment of negative emissions in power generation anywhere in the world.”

In the U.K., renewable energy sources account for 37 percent of its electricity generation, with biofuels taking the largest share, at 14 percent. In April, it set a goal of cutting carbon emissions by 78 percent by 2035,  compared to 1990 levels.

Drax is pitching BECCS as a way to help the U.K. meet its Paris agreement climate goals, and has partnered with Bechtel to explore opportunities to build new BECCS plants internationally, including in the U.S. and western Europe, said Drax spokeswoman Ali Lewis, in a written statement.

“The climate emergency means that it’s no longer enough to reduce emissions,” Lewis said. “We need to take more urgent action to permanently remove CO2 from the atmosphere—making negative emissions from BECCS critical.”

The subsidies are providing the incentives needed to make decarbonization technologies economically feasible, the company argues.

But in the United States, the environmental group the Natural Resources Defense Council has been looking closely at Drax and its plans for carbon capture and storage, and finds them lacking.

First, operating the carbon capture and storage equipment at a power plant takes extra energy, and NRDC estimates Drax would need to harvest and burn about 30 percent more wood to make the carbon capture equipment work, impacting forests and local communities, said Nathanael Greene, a senior renewable energy researcher with NRDC.

In a study released Wednesday, NRDC estimates that when all carbon releases are considered—from what escapes from forests during harvesting to carbon emissions associated with making wood pellets and shipping them overseas—a wood pellet plant with carbon capture is equivalent to 80 percent of the smokestack emissions of a typical coal fired power plant.

That’s less than a coal plant, but not by much, according to the analysis.

“The idea that this is what the U.K. might possibly think is a pathway to its 2050 goals is pretty alarming,” he said.

This past summer, the European Commission proposed changes to its Renewable Energy Directive that would increase the current E.U.-level target of having at least 32 percent renewable energy sources in the overall energy mix to having at least 40 percent by 2030. The plan, which still needs approval from the European Parliament, also includes stronger sustainability criteria for forest biomass. This includes banning the use of all biomass from primary and highly biodiverse forests, and phasing out subsidies for burning forest biomass to produce electricity, except in certain regions that have been particularly reliant on fossil fuels.

Mary S. Booth, director of the Partnership for Policy Integrity, a research organization and a principal critic of the biomass industry, said she is skeptical of how much difference the proposed policy changes would make.

“It looks like a meaningful thing,” she said. But the “fine print” creates “huge geographic carve outs.”  

Beyond that, she acknowledged that environmental advocates face a “grindingly slow” effort at making any changes in biomass policy. Eurpope has “put so much into this basket. It’s baked into so many of the climate models, without a full accounting of carbon so the inertia just rolls on.”

A British government spokesman said the U.K. has no plans to end its wood pellet subsidies before they are set to expire in 2027, while doubling down on the country’s biofuels program.

“We are totally committed to eliminating our contribution to climate change by 2050, which is why we only support biomass which complies with strict sustainability criteria,” the spokesman said in a written statement from the Department for Business, Energy and Industrial Strategy. “For biomass used in electricity generation, these criteria consider a range of social, economic, and environmental issues including protecting biodiversity, land use rights, sustainable harvesting, and regeneration rates.”

Wood Pellets: A Growth Industry Across the Southeast

Across the South, the wood pellet industry has continued to grow, often expanding into areas with higher than median poverty levels and populations that are predominantly nonwhite.

The Southern Environmental Law Center now counts 23 wood pellet plants in states from Louisiana to Texas, with 11 more that are either seeking permits or have been issued permits.

“There was a huge expansion in 2019, and we’ve continued to see that expansion,” said Heather Hillaker, a staff attorney with the law center. 

Corporate leadership of the Maryland-based Enviva, a major supplier to Drax and a global leader in the production of wood pellets, said on a quarterly earnings conference call in late July that they were expanding several of their plants in the Southeast U.S. and making plans to develop a new one in Bond, Mississippi, as demand for its product continues. The company has also announced  new deals to send additional pellets to Japan and the Netherlands.

John Keppler, Enviva chairman and chief executive officer, said the proposed tightening of the European Commission’s biomass regulations  are “generally” in line with Enviva’s practices. The commission, he said, also “continues to recognize the importance of sustainable biomass in meeting aggressive emissions reduction targets, and the indispensable role biomass plays in mitigating climate change,” according to a company transcript of the call.

Industry expansion often comes with the backing of state officials. In September, for example, a new Drax wood-pellet plant under development in Arkansas was praised by state officials there. 

“The investment that Drax is making throughout Arkansas is proof that the state’s timber industry is poised for a bright future and is a great example of how a global economy works,” Arkansas Secretary of Commerce Mike Preston said in a press release. In May, Drax announced a $40 million investment in Arkansas for three new pellet plants.

But what often follows, Hillaker said, is excessive noise and air pollution. 

“Unfortunately, communities continue to experience a lot of negative impacts of living next to these facilities,” she said. “It seems like these facilities really ramp up in the middle of the night, or at least the noise seemingly ramps up in the middle of the night. And so that causes issues with sleep, and then you have the pollution and the dust from the facilities that continue to cause problems.”

The industry seems to be growing the fastest in the Gulf Coast states, as companies increasingly look to markets in Asia, said Colette, with Dogwood Alliance.

In North Carolina, Active Energy’s market includes the United States, according to the company’s CEO. The company did not respond to emailed requests for comment.

“We will make a product that will be used in North Carolina and around the country to reduce emissions and pollution,” Rowan wrote in the local newspaper. “We hope our local community will be proud.”

But Active Energy is still working to secure a permit that will set limits on local pollution that comes from turning wood into black, coal-like pellets, a novel process for the region known to produce what are called “white pellets,” which are made, in part, in wood burning kilns.

A permit review document with North Carolina regulators explains Active Energy will put wood chips in a pressure cooker, which uses a “steam explosion” process to break down wood fibers into very small particles. The fibers are then densified in a pellet press, producing a product that is designed to be harder and more water resistant than white pellets.

State regulators said they were awaiting more information from the company before they can issue an air quality permit.

In a related matter, the Southern Environmental Law Center, on behalf of the local Winyah Rivers Alliance, has sued the company over claims of ongoing and unauthorized discharges of industrial wastewater at the wood pellet mill property in Lumberton, which is contaminated with toxic solvents from prior industrial use.

Regan, the Lumberton resident, is a party in that lawsuit and said she would be happy if the British company were to abandon the pellet plant plans altogether.

But short of pulling out, Regan said, “my only ask is that the wood pellet plant just get into compliance and do the things required of them. Don’t try to cut any corners. Make sure people feel protected.”