Following the 2007 U.S. Supreme Court decision in Massachusetts v Environmental Protection Agency (EPA), the EPA began regulating greenhouse gas (GHG) emissions from automobiles under the Clean Air Act (CAA). Concluding that therefore GHGs were a "regulated pollutant" under the CAA, EPA determined to also regulate new and existing “major” stationary sources of GHG emissions. In October 2009 EPA proposed the Tailoring Rule[1] to "tailor" the permit requirements for new major GHG emission from stationary sources, requiring a permit for any facility emitting more than 100,000 tons of GHGs annually. Because biomass (or “biogenic “) emissions are part of an ongoing cycle that circulates carbon in trees and other plants into and out of the atmosphere, EPA's proposed rule did not make them subject to the permit requirement. However, in a sudden and unexpected departure from established policy, EPA’s final June 2010 rule[2] applied both the threshold and the permit requirement to biogenic emissions from major stationary sources without regard for the biogenic cycle.

The EPA faced significant criticism from Congress[3] and science experts[4] over its decision. The forestry industry petitioned EPA to reconsider the rule, which EPA granted in January 2011. EPA then adopted an interim regulation (the “deferral rule”) deferring for a period of three years (until July 2014) the application of the Tailoring Rule to biogenic CO2 emissions from stationary sources[5] while it developed a framework to account for biogenic carbon emissions. On July 12, 2013, in response to a lawsuit filed by environmental groups, the U.S. Court of Appeals for the District of Columbia vacated the deferral rule, finding EPA failed to adequately explain its reasons for suspending enforcement of the Tailoring Rule.

During the deferral period EPA presented a draft biogenic carbon accounting framework to its Science Advisory Board (SAB) for review. The SAB issued its report in September 2012.[6] EPA then submitted a revised framework to the SAB for further review in November 2014.

In June 2014 the U.S. Supreme Court ruled that GHG emissions alone do not trigger EPA’s permit requirements for major sources under the CAA as asserted under the Tailoring Rule. However, the Court stated that EPA should consider GHGs for regulation when pollutants specifically enumerated under the CAA trigger a permit requirement. This left biogenic emissions in excess of the established threshold for major sources (now 75,000 tons per year) subject to potential analysis as a pollutant in a permit application.

EPA has not yet amended the Tailoring Rule to address biogenic emissions as it committed to do in 2011.

On August 3, 2015, EPA released its final Clean Power Plan (CPP)[7] requiring a 32% overall reduction in U.S. GHG emissions by 2030. The CPP sets state-by-state GHG emissions reduction targets and requires each state to develop by September of 2016 a draft State Implementation Plan (SIP) to achieve its reduction target. EPA must approve each SIP. The CPP also proposed for public comment a draft Federal Implementation Plan (FIP) that EPA will apply to states that do not have approved SIPs. EPA sought comment on the treatment of biomass under SIPS and the draft FIP. EPA also indicated that it will use the final carbon accounting framework as one of several factors in determining a final policy for biogenic emissions.

Although EPA committed to revise its biomass policy by July 2014, EPA has not followed through on this commitment. In April 2016 EPA’s Science Advisory Board failed to finalize a science report on biomass that has been in development for nearly 6 years.

On Feb. 9, 2016 the Supreme Court “stayed” or suspended implementation of EPA’s CPP, returning the case to the U.S. Court of Appeals for the DC Circuit for a decision on the rule’s validity. The stay will remain in effect until a final decision by the Supreme Court on review of the DC Circuit’s ultimate decision, a process that could take 18 to 30 months. This means states are no longer obligated to SIPs or requests for an extension of the deadline by September of 2016. However, EPA has stated it will continue working with states that choose to continue developing SIPs, although many states are signaling that they will wait for legal clarity.

EPA states that SIPs may include the use of “qualified biomass” to achieve GHG reduction targets under the CPP, yet EPA treats biomass in a fundamentally different way than all other renewable energy sources and introduces several new, complex and arbitrary requirements with little or no information on how states should apply them. These include:

  • Treating biomass on a feedstock-by-feedstock basis that seeks to differentiates various types of forest biomass without regard for the status of overall forest carbon stocks.
  • Requiring states to determine that biomass is “sustainably derived,” a term EPA does not define and which could encompass a variety of complex environmental, economic and social factors that extend well beyond the scope of the biogenic carbon cycle and the CAA.
  • Requiring states to demonstrate that the biomass to be used under its SIP can “control” increases of CO2 in the atmosphere and to assign a “valuation” number to each qualified biomass feedstock that dictates whether or not a specific biomass feedstock receives full or partial credit as a zero-emission renewable fuel.
  • Requiring states to specify methods for tracking, reporting, monitoring, verifying and auditing sustainably derived biomass that could impose considerable and unprecedented procedural complexity and cost on states and energy producers.
  • Seeking public input to inform the development of the criteria for qualified biomass during the same timeframe in which states must prepare draft SIPS. States will, therefore, have no means of knowing the standard EPA will apply to qualify biomass prior to submitting their draft SIPs. This creates a powerful disincentive for states to rely on biomass as a compliance option.
  • Excluding biomass as a compliance option in the draft FIP suggesting a strong bias against biomass for states wishing to use the draft FIP as a template for developing a SIP.

The ongoing uncertainty around the treatment of biogenic emissions in EPA GHG regulations discourages investment to build, modify or upgrade biomass energy facilities to the detriment of biomass energy producers and forest owners across the country.

 


[1] 74 Fed. Reg. 55292 (October 27, 2009).

[2] 75 Fed. Reg. 31514 (June 3, 2010).

[3] Bipartisan Senate Letter to EPA Expressing Concern Over Final Tailoring Rule, July 2, 2010 and Bipartisan House Letter to EPA Expressing Concern Over Final Tailoring Rule, June 16, 2010.

[4] 113 prominent scientists wrote to Congress expressing opposition to EPA’s position.

[5] 6 Fed. Reg. 43490 (July 20, 2011).

[6] SAB Review of EPA’s Accounting Framework for Biogenic CO2 Emissions from Stationary Sources (September 2012).

[7] U.S. Environmental Protection Agency, Clean Power Plan, August 3, 2015.