Under U.S. federal policy, wood pellets are classified as carbon neutral renewable energy. That label, assigned in an overlooked 2018 rider buried in a massive appropriations bill, is worth billions of dollars. The people who lobbied hardest to put it there were not scientists. They were investors who may make billions as a result of that controversial decision.
Enviva, the world's largest wood pellet producer, was built with private equity money. Riverstone Holdings first invested in 2010 through its $4.3 billion Riverstone/Carlyle renewable energy fund, then led a recapitalization worth more than $1 billion in 2020, bringing in money from investment firms Goldman Sachs, Mubadala, Fortress, and Neuberger Berman. None of them were betting on wood, but on a label. Take away the renewable designation and the business disappears. It only works when governments agree to count pellets as “clean.”
A label that valuable has to be defended, and it has been. Senate lobbying records show Enviva paying for a Washington lobbying operation year after year, alongside trade groups like the American Forest & Paper Association. In 2018 the effort paid off. A rider buried on page 902 of that year's appropriations bill ordered the EPA, USDA, and the Department of Energy to adopt policies that "reflect the carbon neutrality of forest bioenergy," language the industry had pushed for years. AF&PA issued a press release applauding Congress for it. In effect, Congress legislated a scientific conclusion because an industry's investors needed it to be true. The rider has been quietly renewed ever since.
The trouble is that the science makes it clear that the label is wrong. Burning wood releases its carbon immediately, and because wood is a low-density fuel, each kilowatt hour puts two to three times as much carbon dioxide into the air as fossil fuels do.
A pellet burns in seconds. The tree it came from took decades to grow. Even a fast-growing pine needs 25 or 30 years, and the bottomland hardwoods being fed into Southern pellet mills may have been standing since before anyone reading this was born. How many things do we wait 80 years for anymore? That is the timescale on which this industry's carbon math is supposed to balance, and it is time the climate does not have.
In 2021, more than 500 scientists and economists, including a former IPCC chair, wrote to President Biden and European leaders asking them to stop treating biomass as carbon neutral. Trees, they wrote, are more valuable in the forest than felled and burned for dirty energy. The whole idea of neutrality rests on an accounting trick that assigns smokestack emissions to the land-use ledger, where they conveniently vanish from a power plant's books. But the atmosphere does not keep two sets of books.
Notice who has already come out ahead. Riverstone cashed out much of its position in the 2020 recapitalization. Four years later Enviva went bankrupt, crushed by debt despite every policy break Washington could offer, and the industry's response was more lobbying, this time for Inflation Reduction Act tax credits. The label keeps on paying out to special interests even when the business does not. What gets left behind are clearcuts across the South, and increasingly across the West, and pellet mill pollution in communities that never saw the profits.
Biomass should not be classified as carbon neutral. Physics does not bend to whatever conditions Congress writes into a rider.
Congress should immediately strip the carbon neutrality language from spending bills, keep biomass out of clean energy tax credits, and let the EPA follow the evidence.
Investors are free to place bets. What they should not get is a Congress willing to re-label pollution as climate progress so the bet pays off, while the forests of the nation are ground up to cover it.
Dr. Dorsey is the director and chair of the Rob and Melani Walton Sustainability Solutions Service at Arizona State University.
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