May 2013 Biomass Magazine by BBI International

INSIDE ¦ ADVERTISER INDEX¦ MAY 2013 | VOLUME 7 | ISSUE 5

2013 Algae BIomass Summit 2013 Fuel Ethanol Workshop & Expo

May 2013

2013 National Advanced Biofuel Conference & Expo

2014 International Biomass Conference & Expo

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Page 12

On the Cover: Tim Portz, Biomass Magazine executive editor (far left), leads a roundtable discussion with industry leaders at the International Biomass Conference & Expo. (L to R): Bob Cleaves, Biomass Power Association president; Michael McAdams, Advanced Biofuels Association president; Mary Rosenthal, Algae Biomass Organization executive director; Seth Ginther, U.S. Industrial Wood Pellet Association executive director; Joseph Seymour, Biomass Thermal Energy Council executive director.

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06 EDITOR’S NOTE Meeting Exploding Biomass Demand Sustainably By Tim Portz

07 INDUSTRY EVENTS 09 BUSINESS BRIEFS 12 PHOTO REVIEW:

2013 INTERNATIONAL BIOMASS CONFERENCE & EXPO

36 MARKETPLACE

20 POWER 18 NEWS 19 COLUMN Biomass Takes on Minneapolis By Bob Cleaves

20 FEATURE Certification Uncertainty Looming overseas policy may require certification for sourced biomass, but forest ownership in the U.S. doesn’t accommodate mandates as proposed. By Anna Simet

Biomass Magazine: (USPS No. 5336) May 2013, Vol. 7, Issue 5. Biomass Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

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MAY 2013 | BIOMASS MAGAZINE 3

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INSIDE ÂŚ

MAY 2013 | VOLUME 7 | ISSUE 5

28 PELLETS 26 NEWS 28 FEATURE The Weight of Biomass Analysis Producers and their third-party partners utilize a host of tests to determine and prove key pellet quality metrics. By Chris Hanson

THERMAL 32 NEWS 33 COLUMN Recommendations for Pro-Growth Tax Reform By Joseph Seymour

34 CONTRIBUTION Forest Sustainability: Bioenergy Breaks and Barriers Solving the present structural forest management crisis requires integration of the forest product and bioenergy industries. By Robert W. Gray and Francisco Seijo

BIOGAS 36 NEWS

ADVANCED BIOFUELS & CHEMICALS 38 NEWS 39 COLUMN RFS Under Attack Once Again By Michael McAdams

MAY 2013 | BIOMASS MAGAZINE 5

¦EDITOR’S NOTE

Meeting Exploding Biomass Demand Sustainably The production cycle for this issue of Biomass Magazine fell smack dab in the middle of the International Biomass Conference & Expo, which our team just wrapped up. More than 1,200 of you joined us in Minneapolis, and I’m not alone when I suggest that this year’s event was the strongest in the conference’s sixyear history. Our efforts to establish the International TIM PORTZ Biomass Conference & Expo as the preeminent annual VICE PRESIDENT OF CONTENT venue for the varied sectors that together form the bio& EXECUTIVE EDITOR tportz@bbiinternational.com mass industry we are so happy to serve are truly succeeding. In keeping with tradition, we opened the conference with a moderated conversation featuring the leaders of the various biomass industry associations. This year, we asked association leaders to share with our audience news about facilities under active construction and expansion. We were delighted to hear of robust activity in all biomass industry sectors. Each of the association leaders pointed to policy certainty as a critical component and the number one catalyst for the continued and accelerated expansion of their segment. Interestingly, foreign energy policy is emerging as one of the largest catalysts for domestic biomass energy activity. Seth Ginther, executive director of the U.S. Industrial Pellet Association, briefed our audience on the tremendous market signal being sent to the American Southeast by the architects of the U.K. Renewable Obligation Certificate scheme. The appetite for U.S.-produced American wood pellets is music to the industry’s ears, but the Europeans want and are demanding a fiber supply that can meet both performance and sustainability criteria. This issue of Biomass Magazine examines each of these in turn. Chris Hanson’s feature, “The Weight of Biomass Analysis,” lays out the most common tests performed on wood pellets, the manner in which the tests are performed and the reason buyers demand that these metrics be met. Anna Simet’s feature, “Certification Uncertainty,” outlines the challenge the industry faces in bringing enough forest acres under active certification to satisfy the appetites of foreign pellet buyers. While institutional landowners can afford the investment of getting their acres certified, it isn’t feasible for many smaller private landowners. Simet’s feature suggests that the forestry industry and certification segment are already working on this problem so that the sustainability requirements of foreign buyers don’t create a supply bottleneck stateside. Clearly, the underlying point of certification requirements is to prove the overall sustainability of the supply chain. As our industry ramps up to satisfy growing demand for biomass inputs and biomass-derived energy, our customers and the public at large will have to be assured we are doing so sustainably. The job that now falls to our industry is to work with our customers, our partners and the scientific community to stake out an objective and measurable definition of what sustainability is, while developing and deploying a cost-effective means of guaranteeing our supply and production chains operate inside of those parameters.

6 BIOMASS MAGAZINE | MAY 2013

EDITORIAL PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com MANAGING EDITOR Anna Simet asimet@bbiinternational.com NEWS EDITOR Erin Voegele evoegele@bbiinternational.com STAFF WRITER Chris Hanson chanson@biinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Elizabeth Burslie bburslie@bbiinternational.com

PUBLISHING & SALES CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com ACCOUNT MANAGERS Marty Steen msteen@bbiinternational.com Andrea Anderson aanderson@bbiinternational.com Kelsi Brorby kbrorby@bbiinternational Tami Pearson tpearson@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com ADVERTISING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com SENIOR MARKETING MANAGER John Nelson jnelson@bbiinternational.com Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside of the United States, Canada and Mexico. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or service@bbiinternational.com. Advertising Biomass Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Contributions Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

¦INDUSTRY EVENTS 21st European Biomass Conference & Exhibition June 3-6, 2013

Bella Center Copenhagen, Denmark The 2013 EU BC&E will be one of the leading annual meetings for the international biomass community. The conference will discuss major issues for the biomass markets in technical and business areas. +39 055 5002280 ext. 221 | www.conference-biomass.com

International Fuel Ethanol Workshop & Expo June 10-13, 2013

America’s Center St. Louis, Missouri Where Producers Meet Now in its 29th year, the FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine. 866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & Expo Sept. 10-12, 2013

CenturyLink Center Omaha Omaha, Nebraska Proving Pathways. Building Capacity. Produced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicals—technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. 866-746-8385 | www.advancedbiofuelsconference.com

Algae Biomass Summit Sept.30-Oct. 3, 2013

Hilton Orlando Orlando, Florida This dynamic event unites industry professionals from all sectors of the world’s algae utilization industries including, but not limited to, financing, algal ecology, genetic systems, carbon partitioning, engineering & analysis, biofuels, animal feeds, fertilizers, bioplastics, supplements and foods. 866-746-8385 | www.algaebiomasssummit.org

International Biomass Conference & Expo March 24-26, 2014

Orlando Convention Center Orlando, Florida Organized by BBI International and coproduced by Biomass Magazine, the International Biomass Conference & Expo program will include 30-plus panels and more than 100 speakers, including 90 technical presentations on topics ranging from anaerobic digestion and gasification to pyrolysis and combined heat and power. This dynamic event unites industry professionals from all sectors of the world’s interconnected biomass utilization industries—biobased power, thermal energy, fuels and chemicals. 866-746-8385 | www.biomassconference.com

MAY 2013 | BIOMASS MAGAZINE 7

Customer: Palm oil mill, Southeast Asia.

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scienc scie ce innova inno vati tion ti on, thatt iiss. We’ e’ve gott nott o one ne butt two two top top rre e earc esea es rch h inst in stit itut utio ions ns, Io Iowa wa S Sta tate te U Uni nive vers rsit ityy an and d Un Univ iver ersi sity ty o off Io Iowa wa. No N t on Not only lyy are ar e th they ey p pro rodu duci cing ng b bre reak akth thro roug ughs hs iin n se seed ed ssci cien ence ce,, ch chem emic ical alss an and d biofuels. Each is transferring patented discoveries to Iowa’s bioscience companies. Which attracts a cluster of the most innovative bioscience leaders in the world. Which attracts more R&D investment—more than $600 million a year at the two universities in cumulative grants, contracts and cooperative research. Which attracts a skilled talent pool. We call this Iowa’s “agronomic ecosystem.” It’s why Iowa has produced a bioscience employment increase that was 80 percent higher than the national average from 2001-2008. And why Battelle Technology wrote, “No other location in the country has such a complete suite of capabilities for bioscience development.” Find your opportunity at IowaEconomicDevelopment.com.

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Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

CanBio appoints executive director The Canadian Bioenergy Association’s (CanBio) board of directors has appointed Fernando Preto as executive director. Preto most recently Fernando Preto, served as lead scientist executive director of biomass and of the Canadian renewables at Natural Bioenergy Association Resources Canada’s CanmetEnergy, an energy science and technology organization. In his position at CanmetEnergy, Preto was instrumental in advancing bioenergy developments in Canada and bringing together industry, government and academic stakeholders from the agriculture, forestry and energy

sectors. He served as a taskforce member for the Forest Products Association of Canada’s biopathways initiative. Preto is a chemical engineer by training, and has the technical expertise, project experience and collaborative leadership skills needed to promote the Canadian bioenergy and bioeconomy sectors. Sewall adds vice president Consulting organization Sewall has hired Lee Freeman as vice president of global business development. Freeman has 35 years of experience in forestry and natural renewable resources. In his new position, Freeman will lead Sewall’s business development and consultative sales in biomass, carbon and other renewable energy markets, complementing the organization’s existing staff expertise

in engineering, geospatial, forestry and natural resources consulting. Prior to joining Sewall, Freeman was employed by Thomson Reuters Lanworth, where he led business development in forestry, energy and carbon markets. He advanced Lanworth’s global business through partnerships and integrated geospatial solutions for real-time agro-forestry monitoring, inventory and analysis. Freeman has also held leadership roles in supply chain management, supervising the sourcing of forest products, biomass and recycled fiber for pulp and paper manufacturing firms. Fredrikson & Bryron shareholder earns fellowship Fredrikson & Byron PA shareholder Richard Weiner was named a fellow

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BUSINESS BRIEFS¦

of Stanford University Law School’s Transatlantic Technology Law Forum. He will research and author a white paper on best practices for implementing a transAtlantic renewable energy policy that will include a comparison of the best U.S. and European renewable fuel practices. Weiner is an international biofuels lawyer at Fredrikson and Byron, where he chairs the firm’s international group and biofuels group. He assists clients with biofuel projects in the U.S. and overseas. Weiner’s term runs through 2014. VG Energy adds chief science advisor VG Life Sciences has announced Martin B. Dickman has joined its subsidiary VGEnergy as chief science advisor. In his new position, Dickman

Rotary Dryer

will enhance the scientific rigor of the company’s alternative energy core technology platform and expand the development of products that enhance the lipid and sugar production in emerging market sectors, such as algae biofuels. Dickman’s expertise in comparative plant physiology and plant pathologies is expected to add a new dimension to VGEnergy’s ongoing research. He has held positions at several universities, most recently as director of the Institute for Plant Genomics and Biotechnology at Texas A&M University. Associated British Ports signs contract with Drax Associated British Ports signed a 15-year contract with Drax Power Ltd., an operating subsidiary of Drax Group plc.

m rgy Syste Heat Ene

ABP will make investments of up to £100 million ($153 million) to handle wood pellet shipments at its Humber Ports of Immingham, Hull and Goole to support Drax Power’s conversion to a pellet-fueled power plant. The Drax Power Station at Selby is the U.K.’s largest single producer of electricity, meeting approximately 7 percent of the country’s energy needs. Drax plans to convert three existing coalfired generating units to burn wood pellets.

SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Business Briefs, Biomass Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to evoegele@bbiinternational.com. Please include your name and telephone number in all correspondence.

Boiler

www.dieffenbacher.com MAY 2013 | BIOMASS MAGAZINE 11

ÂŚEVENT

Ruth Prideaux accepts the Groundbreaker of the Year Award on behalf of Dominion Virginia Power; Charlie Niebling of New England Wood Pellet wins the Excellence in Bioenergy Award.

12 BIOMASS MAGAZINE | MAY 2013

Seth Ginther, U.S. Industrial Wood Pellet Association executive director, explains the impact of overseas policies on the U.S. wood pellet export industry.

EVENT¦

Building on Innovation Policy and industry collaboration were two topics highlighted at the 2013 International Biomass Conference & Expo. BY ANNA SIMET PHOTOS BY JEFFREY SCHMIEG

CPM’s Scott Anderson, left, BBI International’s Tim Portz and Buhler’s Greg Alles cut the ribbon to officially open the 2013 International Biomass Conference & Expo.

MAY 2013 | BIOMASS MAGAZINE 13

ÂŚEVENT

2013-2014 Pellet Mill Magazine Editorial Board (L to R): Ryan Davis, Zilkha Biomass Energy;Jonathan E. Kahn, Geneva Wood Fuels;Tom Plaugher, Appalachian Wood Pellets; Tom Bryan, BBI International; Jennifer Hedrick, Pellet Fuels Institute; Tim Portz, Biomass Magazine; Chad Schumacher, Superior Pellet Fuels.

On the busy expo floor, All Power Labs' Brian Normally, right, discusses the company's exhibit with an attendee.

14 BIOMASS MAGAZINE | MAY 2013

Fagen Inc.'s Ed McRae shares information about the company's newly completed biomass power plant in Nacogdoches, Texas.

EVENT¦

eld in Minneapolis on April 8-10, the International Biomass Conference & Expo welcomed over 1,200 industry stakeholders—technology, equipment, and service providers, academia, project developers, investors, foresters and more—to discuss the industry’s most pressing issues. The event kicked off early the first morning with tours of Koda Energy LLC and the Elk River Resource Recovery Project. Following an afternoon finance and project development forum, the ribbon to the expo hall and welcome reception was cut by Tim Portz, Biomass Magazine executive editor. Day two of the event began with industry awards. Charlie Niebling, general manager of New England Wood Pellet, received the 2013 Excellence in Bioenergy Award, and Dominion Virginia Power was awarded the Ground Breaker of the Year Award for converting three coal-fired power plants to biomass. The ensuing general session’s industry director roundtable focused on the legislative landscape and market growth and opportunities. Each speaker discussed near- and long-term challenges and goals of their respective biomass sector, which included biomass power, thermal, advanced biofuels, algae and wood pellets.

Metso's William Partanen, left, and John Feick, right, visit with with an expo attendee.

The Abengoa booth was warmly staffed by Jessica Woods, left, Catrina Straubinger and Philip Schwarz.

MAY 2013 | BIOMASS MAGAZINE 15

¦EVENT

Attendees enjoy dinner and a live band at the closing International Biomass Conference & Expo event.

Last year's Excellence in Bioenergy Award winner William Strauss of FutureMetrics Inc. asks a question during a breakout session.

Following the general session were two days of concurrent breakout and question and answer sessions dedicated to specific sectors of the industry: power and thermal, pellets and densification, advanced biofuels and biochemicals, and biogas. The conference wrapped up with an evening of socializing and networking at the Nicollet Island Pavilion, where attendees enjoyed stunning views of downtown Minneapolis and the bluegrass musings of the High 48s. Completion of a final industry tour the following morning—District Energy St. Paul, Environmental Wood Supply and Target Field—officially marked the end of the sixth annual International Biomass Conference & Expo. Planning is already underway for next year’s event, which will be held in Orlando, Fla., on March 24-26.

Jeff Manternach, IR1 Group LLC CEO, presents on an advanced biofuel & biobased chemical panel. Other panelists include Brian Davis, BioPetrol Ltd. North American coordinator, left; Andrew Held, Virent Inc. senior director of feedstock development; Kolby Hoagland, BBI International maps and data manager.

16 BIOMASS MAGAZINE | MAY 2013

EVENTÂŚ

Alejandro Zamorano, Bloomberg bioenergy analyst, discusses investment drivers in nextgeneration bioenergy.

Enjoying evening entertainment at Nicollet Island Pavilion. Marco Lemes, SMUD, left; Ruud van den Brink, ECN; Valentino Tiangco, SMUD; Jim Patel, Carbona; Timo Bungert, Andritz.

MAY 2013 | BIOMASS MAGAZINE 17

PowerNews Biomass power production increased in 2012 The U.S. Energy In2012 electricity net generation (all sectors) formation Administration in million kWh released biomass power data Wood Waste for all 12 months of last biomass biomass year in the March issue of its Monthly Energy Review. Jan. 3,366 1,629 Net electricity generation for Feb. 3,126 1,537 wood biomass increased to March 2,938 1,663 37.54 terrawatt hours (TWh) April 2,666 1,668 last year, an increase over the 37.45 TWh production level May 2,997 1,713 for 2011. June 3,060 1,687 Power production from July 3,296 1,769 waste biomass also increased Aug. 3,311 1,676 last year, reaching 20.03 TWh. The U.S. EIA defines Sept. 3,143 1,628 waste biomass as including Oct. 3,073 1,660 municipal solid waste from Nov. 3,216 1,633 biogenic sources, landfill gas, Dec. 3,350 1,762 sludge waste, agricultural bySOURCE: U.S. ENERGY INFORMATION ADMINISTRATION products, and other biomass. Only 19.22 TWh of electricity from waste biomass was reported in 2011. the year prior. Only 276 trillion Btu of The EIA estimates that 367 trillion waste biomass was consumed to generate Btu of wood was consumed to generelectricity in 2012, however, a slight drop ate power in the U.S. during 2012, an compared to the 279 trillion Btu of waste increase over the 348 trillion Btu reported biomass reported for 2011.

18 BIOMASS MAGAZINE | MAY 2013

Biomass fuel cell project planned for California The Blue Lake Rancheria Tribe of Humboldt County, Calif., has purchased a 175 kW ClearGen distributed generation fuel cell system from Ballard Power Systems. The system will be integrated with a biomass gasification system and a syngas purification unit, resulting in an integrated biomass-to-fuel cell power solution that has the potential to double the efficiency of the biomass power production. The system will use a pyrolysis gasification technology to convert waste woody biomass into syngas, which will be purified into a high-quality hydrogen stream. The hydrogen will fuel the ClearGen fuel cell system. Once operational, the plant will provide base-load power to the tribe’s commercial enterprises. Waste heat will heat a swimming pool at an adjacent hotel. Schatz Energy Research Center, which is affiliated with Humboldt State University’s Environmental Resources Engineering program, will provide support for the project. A proposed funding award from the California Energy Commission’s Community Scale Renewable Energy Development, Deployment and Integration Program is helping fund the project.

POWER¦

Biomass Takes on Minneapolis BY BOB CLEAVES

In early April, I attended the International Biomass Conference & Expo in Minneapolis. This was a huge gathering of every possible aspect of the biomass industry. Wood-to-energy, equipment and machinery, torrefaction, thermal, combined heat and power, biofuels and algae were all represented at the conference, among even more topics. The term “biomass” is an umbrella term that refers to an incredibly diverse selection of industries and markets. Yet, there is a good reason that all of these sectors were present in Minneapolis. In addition to the networking opportunities, we all need to be aware of the policy challenges facing our respective pieces of the biomass industry. Through collective efforts, we can make sure that the industry continues to grow in the coming years, and protect it from challenges that come from Washington, state and local governments. One example of an area where we are making progress on the federal level is in the area of energy tax reform. While comprehensive tax reform that gives serious, long-term support to renewable energy resources is far from guaranteed, there have been a couple recent reasons for optimism. First, President Obama included in his fiscal year 2014 proposed budget a line item that would permanently extend production tax credits (PTC) to renewable energy sources. This would be very encouraging for the biomass industry if it came to pass, as it would help new facilities secure the considerable investments they need for construction. It would also allow us to divert our resources to other important issues, rather than advocating for a PTC renewal every couple of years.

Second, the House Ways and Means Committee invited testimony from the Biomass Power Association on energy tax reform. In March, I testified in front of the Committee, and last month provided written testimony on what we as an industry need to see happen. I recommended four things: • Make renewable electricity tax incentives permanent. • Make the tax rate standard across the board for all technologies. • Recognize the value of existing biomass facilities. • Promote refurbishment of older facilities, and acknowledge the value of cofiring with fossil fuels is possible. Obviously, this wish list won’t solve everything for the biomass industry. It’s not even guaranteed that any of this will become law. It’s a good start, however, that both the president and Congress are looking seriously at energy tax law and ways that it can be improved. As I noted above, the biomass industry is made up of a lot of smaller, more specialized sectors. We all have common interests though, and it is my firm belief that we can accomplish more by comparing notes and acting together on policy and other issues we face. The International Biomass Conference & Expo was a great example of that, and I look forward to seeing you all at future events. Author: Bob Cleaves President and CEO, Biomass Power Association www.biomasspowerassociation.com bob@biomasspowerassociation.com

MAY 2013 | BIOMASS MAGAZINE 19

¦POWER

20 BIOMASS MAGAZINE | MAY 2013

POWER¦

Certification Uncertainty The United Kingdom’s biomass sustainability criteria may impact U.S. biomass exporters, particularly policy requiring forest certification. BY ANNA SIMET

MAY 2013 | BIOMASS MAGAZINE 21

¦POWER

ustainably sourcing biomass fuel isn’t something that’s taken lightly in the U.K., and the country is proving it by developing the first nationwide mandatory biomass sustainability standards. As its Renewables Obligation continues to ramp up, the amount of biomass that power utilities will require may significantly increase, and the U.K. is determined to ensure that feedstocks are sourced responsibly. The RO, a policy mechanism similar to a state renewable portfolio standard in the U.S., requires licensed electricity suppliers in the U.K. to source an increasing amount of electricity from renewable sources. Biomass, particularly imported wood pellets, are an attractive replacement for facilities using coal, and imports from North America are increasing at a rapid rate. Currently, the country sets general restrictions for biomass materials sourced from land with high biodiversity value or high carbon stock, including primary forest, peatland and wetlands. But this approach has proven untenable over the past two years, according to Suz-

22 BIOMASS MAGAZINE | MAY 2013

EU-wide Sustainability Standards While the European Commission included minimum sustainability requirements for biofuels and bioliquids in the 2009 Renewable Energy Directive, sustainability requirements for solid biomass were not addressed until the following year, when a follow-up report was published to outline recommended sustainability criteria for solid biomass production and use. According to Environmental Defense Fund’s report, “European Power from U.S. Forests,” the European Commission is expected to release an additional report later this year that clarifies uncertainties related to sustainability in the EU pellet market. It is expected to identify which sustainability programs meet EU approval, rule whether certification or other sustainability schemes constitute a barrier to trade, and address whether EU-wide binding sustainability criteria are necessary for solid biomass. The European Biomass Association and the Union of the Electric Industry are strongly advocating for the establishment of harmonized, binding sustainability criteria for solid biomass on the EU level, based on the fact that “EU utilities have already taken the lead in voluntary measures by collectively developing sustainability requirements for pelletized biomass and sourcing wood from certified forests.” The groups believe the voluntary approaches should be substantiated and finalized by a legal framework at the EU level, as the absence of such harmonization has led to varying national sustainability rules, thus undermining the goal of achieving an EU-wide internal energy market by 2014. In statements released in March, the groups said that such regulatory complexity hampers trade both within the EU and internationally, increases costs, and is delaying biomass investments.

POWER¦ timber or timber products by one of the major certification Forest Stewardship Council 13 million schemes,” explains Kinney. “In Sustainable Forestry Initiative 60 million the U.S., especially in the South American Tree Farm System 19 million where the majority of industrial pellet mills are or will be loSOURCE: INNOVATIVE NATURAL RESOURCES cated, widespread certification of this type is not common. As mills purAnne Kinney of Forest2Market, as there has been some disagreement over defini- chase wood from dozens of different dealtions, and because current forest certifi- ers, brokers or loggers who buy the timber cation schemes alone are not sufficient to from hundreds of landowners, the scope of any project to increase certification will remeet the criteria. The U.K. Department of Energy and quire significant resources.” So the big question is: will part of the Climate Change proposed new sustainability criteria last September and a comment criteria include this requirement of thirdperiod wrapped up at the end of Novem- party verification of raw material? While it ber, but the official standards are yet to be may sound suitable on the exterior, such a released. As proposed, a biomass power requirement may pose significant challenges facility would have to demonstrate that 70 to U.S. biomass exporters, and some believe percent of the wood used to manufacture sets unachievable expectations. the pellets it procures has chain-of-custody (COC) certification, from the forest of Certification and Ownership “The problem is that there is a very origin to the final user. “In order to demlow percentage of timberland that is actuonstrate compliance, a supplier must provide independent COC certification of the ally certified, so it would be very difficult

Certified forestland in the U.S. (in acres)

to procure 70 percent of material from certified forests,” explains Seth Walker, RISI bioenergy economist. “In the U.S., less than 25 percent is certified, and in the South, it’s 22 percent. Actively managed and harvested timber, less than a quarter of it is certified.” According to Robert Simpson, senior vice president of Sustainable Forests & Forest Product Certification at GreenWood Global Consulting, sourcing 70 percent of pellet feedstock from certified sources “will be impossible, unless you have a very large supplying force nearby,” he says. “If you’re depending on many ma and pop forest owners, it’ll be very difficult.” And that’s largely the case for biomass sourcing in the Southeast, where about 67 percent of commercial-value forests are privately owned. The forest industry owns another small portion, Simpson says, and the federal government an equal portion. “Interestingly, out of the 134 million acres of procurable and useable forestland in the Southeast, only 3 percent have long-term management plans,” says Simpson. Fur-

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¦POWER

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24 BIOMASS MAGAZINE | MAY 2013

thermore, only 13 percent have formal management advice. That’s very minimal compared to Europe, according to Simpson, where 77 percent have some type of professional forest management advice. That leads buyers in the European Union to wonder why forest owners in the U.S. aren’t certified, when the forests of Europe are regulated and strictly managed. In the U.K, about two-thirds of land is privately owned—very close to the portion that is privatelyowned in the U.S.—but both countries differ from the norm, as it is estimated that of the 3.9 billion hectares of the world’s forests, 86 percent are publicly owned. If the U.K. policy comes through as proposed—requiring forest certification—or if an end user demands a high percentage of certified material anyway, it just won’t be found, says Simpson. “It’s not there, especially for the larger facilities.” He recommends smaller family forestland owners contemplating certification to look into group certification, which goes fairly quickly and is less expensive, as it allows multiple forest owners to become certified as a group and share financial costs. Essentially, the motivation behind the standards stems from the carbon accounting question. “If you cut down trees and don’t replant, the carbon story is very different [than if trees are replanted],” says Walker. “There are really two reasons why the U.K. likes certification and sees it as ideal, but at the same time, they know the forests in North America are managed pretty well, and there aren’t any major issues with deforestation or bad practices.” That’s evidenced by the increasing/stable forest area cover in most U.S. regions. “We have growth exceeding removals, so it’s a pretty good story, but it’s tough to put that [sustainable] stamp on it,” Walker says. One of the main reasons for that is there is a great history of family-owned forests, especially in the Northeast and the Southeast; in the Pacific Northwest there is more federal, state and consolidated land. “So, the Smith family in Virginia has 50 acres of forest and a forester comes in every 10 years and maybe cuts 12 of the 50 acres, in 20 years a thinning, then in 40 years do a clear cut and then replant,” explains Walker. “Someone like that isn’t going to have any incentive to go through all of the red tape to get that land certified. The biggest indicator of whether land will be certified sustainable, in the U.S., is whether it is owned by a large land owner or financial landowner.”

Looking Ahead If forest certification isn’t required, what might be the alternative? “Right now, each of the utilities have to audit their own supply chain, so there might just be some due-diligence requirements, as far as the forest stock around the areas they’re procuring fiber from for wood pellets,” suggests Walker. There could also be group certification [requirements] where an entire state would become certified to meet necessary standards. “That hasn’t happened on a big scale yet, but it has happened on smaller scales,” says Walker. For example, FSC worked with a large group of Wisconsin landowners for certification and brought 31,000 new participants into the

POWER¦ certification program, more than 2 million acres of privately owned land. “The major conservancy and the SFI (Sustainability Forestry Initiative) are working together to find gaps in the certification program and see if they can fix them,” Walker adds, one of which is the small landowner problem. The National Wildlife Federation is one of those groups working to recruit smaller forest owners to get certified under FSC, and suggests one way to alleviate the cost to smaller landowners is by sharing the cost with the buyer. “We know that in the Southeast and other regions of the country, not all forest owners can afford to get certified, and so we believe that pellet manufacturers and other bioenergy facilities could help cover the cost of assuring regulators and the public at large that their bioenergy sources are truly sustainable,” says F.G. Beauregard, NWF Southeast Sustainable Bioenergy manager. So whether forest certification will ultimately be required is unclear, but in the meantime, what can pellet exporters be doing to prepare for what might potentially be enforced? The first thing is getting chain of custody under these certification schemes, according to Walker. COC verifies company systems for tracking and handling materials used in FSC-certified forest products within the company's operations.

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Another major preparation measure is securing a supply contract with a large landowner, particularly a financial landowner. “Despite the majority of the actively managed timberland being owned by smaller landowners, there still are very large tracks owned by financial landowners, and those are mostly certified,” says Walker. “So, it is possible to get most or all of your timber from a certified source, if you’re located in the right place and can set up the right agreement.” So, are the standards likely to remain as proposed? “My hunch is no, because there has been so much invested…it would really almost halt the industry, a strict standard like that,” says Walker. “Again, part of the issue is the whole carbon balance, carbon is actually the main issue; they [utilities] have to show a net reduction of carbon over coal. They’re concerned about sustainability on one hand, not wanting to promote any sort of bad forestry practices, but they also want that stamp that says whichever forest the wood came from is managed and has a plan to be replanted.” Author: Anna Simet Managing Editor, Biomass Magazine 701-751-2756 asimet@bbiinternational.com

PelletNews NEWP qualifies for PFI’s pellet fuel standards program

Confluence Energy acquires additional capacity

PFI quality standards PFI premium

PFI standard

PFI utility

40-45

38-46

0.23-0.285

0.230-0.285

0.23-0.285

Pellet durability index

≥ 96.5

≥ 95

Fines (% at mill gate)

Bulk density (lb/ft3) Diameter (inches)

≤ 0.5

≤1

Inorganic ash (%)

≤1

≤2

≤6

Length (% greater than 1.5 inch)

≤1

Moisture (%)

≤8

≤ 10

≤ 300

Heating value

n/a

Ash fusion

n/a

Chloride (pmm)

SOURCE: PELLET FUELS INSTITUTE

New Hampshire-based New England Wood Pellet has become the first manufacturer to qualify for the Pellet Fuel Institute’s pellet fuel standards program. NEWP can now begin to display the PFI Quality Mark on its bags, indicating the company is producing pellets compliant with the fuel grade listed on its packaging. This allows the pellets to be properly matched to appliances that burn them. PFI has been working on the program since 2005 with the goal of creating

26 BIOMASS MAGAZINE | MAY 2013

an industry-wide uniform certification to improve product quality. The program has been incorporated into the U.S. EPA’s New Source Performance Standards for Residential Wood Heaters. Additional companies are undergoing certification and similar announcements are expected to be made later this year. According to PFI, 29 companies representing 48 pellet mills have pledged their intent to enroll in the program in the past year.

Confluence Energy of Kremmling, Colo., has acquired certain assets of Walden, Colo.-based Rocky Mountain Pellet. The acquisition will nearly double the current 100,000 ton production capacity of Confluence Energy. Both facilities began operations in 2008 and have sourced beetle-killed wood as feedstock. Confluence Energy has a 10-year feedstock materials contract with the U.S. Forest Service, which was announced in December. The acquisition includes one building, 90 acres of land, and all the fixed and mobile assets. With the completion of the transaction, Confluence Energy gains facilities housing four pellet presses with an annual capacity of 120,000 tons. Minor modifications are being made to the facility. It is expected to be fully operational by midyear.

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28 BIOMASS MAGAZINE | MAY 2013

PELLET¦

The Weight of Biomass Analysis Biomass quality testing involves a series of meticulous procedures that assure industry confidence. BY CHRIS HANSON

he three grades of pellet classifications issued by the Virginia-based Pellet Fuels Institute––premium, standard and utility––serve to ensure residential and commercial consumers they are getting consistent products. Furthermore, using advanced laboratory testing and quality control of the product could bring more stability and credibility to the biomass industry. “There is a long history of people being able to put whatever they want on the bag, and you’ll see premium as pretty much the predominant grade classification,” says Chris Wiberg, biomass lab manager for Timber Products Inspection Inc. Some producers have even placed super premium and ultrapremium as quality identifiers on their bags, he says, and historically, there has not been a process to verify their claims. The Pellet Fuel Institute has had standards and listed characteristics of the fuel for many years, but they were never fully enforced, Wiberg says. It is very common for producers to not comply with the grade requirements, and others do not even know they are supposed to test their product. “I had a producer in 2006 …he came up to me after my presentation and said, ‘so what you’re telling me is I should test my product?’” Wiberg recalls. When the producer brought in the bag label, it was stamped as a premium grade. “The bag supplier was just so used to what goes on the bag, and wood is wood is wood,” he says.

MAY 2013 | BIOMASS MAGAZINE 29

ÂŚPELLET

ASH ANALYSIS: The Ash Fusion Analyzer at Twin Ports Testing.

Why Test?

Testing Procedures

The main purpose for biomass testing is to assure the product quality is consistent among producers, Wiberg says. Failing to test biomass could hold potential repercussions for consumers, as well as producers. When producers fail to follow a quality program, he adds, they are doing the industry a disservice because it raises concern about the use of inappropriate materials, and consumers might not have the experience the industry would like them to have. One example he cites is a producer suspected of manufacturing pellets containing blue tarpaulin fragments. Biomass testing also aims at building confidence in the industry. When a producer is putting questionable material in a premium pellet, it could result in lower confidence in the system on the part of regulatory bodies. The PFI program is intended to be referenced with the U.S. EPAâ&#x20AC;&#x2122;s new source performance standard for residential wood heaters, Wiberg says. By following standards built in conjunction with the biomass industry and the EPA, product quality and market confidence can become more established, leading to better consumer experiences, resulting in more product recommendations and consumer support for the pellet industry.

To claim a premium grade, the PFI tests biomass materials for bulk density, diameter, pellet durability and other properties, using procedures mostly taken or adapted from ASTM International, formerly the American Society for Testing and Materials. For instance, PFI adapted a protected ASTM test for bulk density of wood pellets by utilizing a minimum, 12-pound sample in a 0.25-cubic-foot container that is tapped 25 times from a distance of 1 inch.

30 BIOMASS MAGAZINE | MAY 2013

The percentage of fines is determined using a 2.5-pound sample weighed with an analytical balance and recorded to the nearest 0.1 gram. A receiving pan is weighed and recorded and a one-eighth-inch screen is attached. The pellet sample is moved to the screen and tilted 10 times to each side to sift the entire sample. Last, the screen is removed and the weight of the base pan with the fines is recorded. To figure the percentage, the recorded weight of the base pan is subtracted from the combined weight of the base pan with the fines, then divided by the initial sample weight and multiplied by 100. The National Renewable Energy Lab tests biomass ash content through the use of a muffle furnace. First, specialized bowls, called crucibles, are placed in a muffle furnace for a minimum of four hours at 550 to 600 degrees Celsius. The crucibles are then removed from the furnace, cooled, weighed and placed back in the muffle furnace to determine a constant weight. Next, 0.5 to 2 grams of the test sample is placed in the crucible and placed over an ashing burner until smoke appears. The smoke is ignited and burned until no more smoke or flames appear. The crucible is placed back in the muffle furnace for 18 to 30 hours, protected from drafts to avoid sample loss.

PAINSTAKINGLY PRECISE: Stephen Sundeen, chemistry laboratory manager at Twin Ports Testing, performs a bomb calorimetry test.

PELLETÂŚ The crucible is then placed in a vacuumsealed enclosure, called a desiccator, cooled for a specific amount of time and weighed with the ash to the nearest milligram to determine the remaining ash. The gross calorific value of a prepared sample of solid forms of refuse-derived fuel is determined by a bomb calorimeter according to ASTM International. In this process, described by the German-based IKA Group, which manufactures bomb calorimeters, 1 gram of a solid is weighed and placed in a stainless steel container filled with roughly 435 pounds per square inch (PSI) of oxygen. The sample is then ignited using cotton thread connected to an ignition wire inside the decomposition vessel and burned. During the test, the core temperature can reach 1,800 degrees Fahrenheit and pressures of 2,900 PSI for a couple milliseconds. The generated heat is then transferred into an inner vessel filled with water where it can be measured. The pellet durability index (PDI) recommended by PFI was outlined by Kansas State University. In the PDI test, a 500gram sample is run through a pellet durability testerâ&#x20AC;&#x201D;a 1-foot-tall box with a 9-inch baffle that rotates to agitate the pellets. Before being placed in the tester, fines are removed with a one-eighth-inch wire sieve. The sample is tumbled through the durability tester at roughly 50 rotations per minute for a total of 500 rotations. The tumbled sample is rescreened on the one-eighthinch sieve and the weight is recorded. The PDI is calculated by dividing the whole pellet sample weight by the initial sample weight, and multiplied by 100. Upon completion of the tests, PFI then classifies the biomass based on the results. To qualify for premium grade for residential and commercial use, pellets need to have a bulk density of 40 to 60 pounds per cubic foot, a diameter of 0.23 to 0.28 inches, length of 1.5 inches with less than 1 percent variation, a PDI greater than or equal to 96.5, fines of 0.5 percent or less, an ash content of 1 percent or less, moisture content of 8 percent or less and chloride content of 300 parts per million or less. In order to enforce the standards, PFI requires random samples be pulled and

tested and says producers must continually test their products. On-site testing may be done, but only if testing will also be completed by an accredited laboratory, at least twice a year. PFIâ&#x20AC;&#x2122;s quality mark can be used only for products that have met the standards. PFI asks that if producers have other, untested product lines, they not imply the quality mark is all encompassing. This lowers the risk of subpar products reaching the customer and establishes credibility for the product.

Domestic vs. Export The criteria for pellets for residential and commercial use are the same. While commercial boilers require the same quality standards as residential units, the industrial uses for biomass are much more varied than residential, Wiberg says. Industrial fuel quality specifications are often negotiated between a biomass supplier and a buyer, reflecting the specific requirements for the

power plant or other industrial use and incorporating logistics concerns. Work is being done in Europe to create new standards based on contract agreements currently in use among industrial users, power plants and pellet producers, according to Wiberg. The establishment of European standards could demand further quality studies of biomass on the industrial level. Timber Product Inspection is currently the only lab in the U.S. to achieve ISO 17025 accreditation by the International Organization for Standardization for the European test method, Wiberg adds. He hopes PFI might adapt ISO testing methods to help create a more international standard. Author: Chris Hanson Staff Writer, Biomass Magazine 701-738-4970 chanson@bbiinternational.com

MAY 2013 | BIOMASS MAGAZINE 31

ThermalNews Pellet stoves gain market share Pellet stoves had only Pellet appliance shipments an 11 percent share of the stove market in 1999. Today, nearly one in three stoves sold are designed to burn pellets. According to the Hearth, Patio & Barbeque Association, manufacturers shipped 48,277 pellet stoves to sell in the U.S. during 2012. While 2012 sales were slow, pellet stoves sales for the past five years averaged nearly 90,000 per year. SOURCE: HEALRTH, PATIO & BARBECUE ASSOCIATION Despite their lower emissions profiles, pellet stoves in the U.S. getting off the ground without significant government assistance,” said John Ackerly, have rarely been recognized in rebate and incentive programs as distinct from wood president of the Alliance for Green Heat. stoves. Distinct incentives, however, could “While this proves pellet technology can succeed in the market on its own, if it expedite growth in the pellet appliance market. A recent rebate program in Mary- was treated like solar and geothermal in the federal tax code, many more consumland resulted in residents choosing pellet ers would have a very affordable way to stoves twice as often as wood stoves. reduce fossil fuels.” “This is an example of a new and effective renewable energy technology

32 BIOMASS MAGAZINE | MAY 2013

Canadian village wins grant for biomass district heating system The village of Telkwa, British Columbia, was awarded $680,230 from the Canadian government through Infrastructure Canada’s Gas Tax Fund transfer to install a biomass heating system in its municipal building. The funding will also support a sustainable subdivision plan. The biomass heating system will burn wood waste from the forest lands surrounding the community. In addition to providing heat to the village’s municipal building, the system will also heat an adjacent business, a school and four residences. Once complete, the project is expected to reduce carbon dioxide emission by approximately 10 metric tons per year and improve efficiency. “Telkwa’s project will lead to cleaner air and reduce the cost of operating their municipal building for years to come,” said Union of British Columbia Municipalities President Mary Sjostrom. “I am very pleased to see the Gas Tax Fund supporting this district energy system.”

¦THERMAL

Recommendations for Pro-Growth Tax Reform BY JOSEPH SEYMOUR In mid-April, the Biomass Thermal Energy Council shared its perspective on federal energy tax policy in the context of comprehensive tax reform with the U.S. House Ways and Means Energy Tax Reform Working Group. BTEC is urging the working group to evaluate reform efforts that provide a level playing field for competing energy technologies, specifically for high-efficiency biomass thermal combustion technology. Our nation’s tax code has long played a key role in shaping and influencing national energy policy. In the renewable energy arena, the current code features numerous incentives for most renewable energy technologies in residential, commercial and industrial installations (Sections 25D and 48, respectively, for investment tax credits, and Section 45 for production tax credits). The Joint Committee on Taxation has listed approximately 80 separate energy-related tax provisions in existing law. Unfortunately, none of these incentives extends to high-efficiency biomass thermal energy, despite the fact that biomass thermal energy fulfills all the same public policy objectives as other renewable energy sources, and despite the fact that the code recognizes other thermal technologies such as solar and geothermal. The end result is an uneven energy landscape that promotes certain technologies over others, both limiting consumers’ energy choices and their ability to utilize local fuels from landowners and farmers. BTEC proposes parity in tax incentives for high-efficiency biomass thermal combustion technology to include: • Eligibility for the 30 percent residential renewable energy tax credit under Section 25D of the Internal Revenue Code. • Eligibility for the 30 percent business energy investment tax credit under Section 48 for commercial and industrial installations. • Accelerated depreciation of capital investments similar to what also exists for other renewable technologies, including biomass electric generation. Inclusion of biomass thermal in Sections 25D and Section 48 will provide the highest possible return for the country in terms of reductions in fossil fuel imports and jobs created. Per dollar of federal support, biomass heating displaces ten times more fossil fuel than solar installations or ethanol and is proven to create a greater number of ongoing jobs. Biomass has accounted for 40 percent of the renewable energy jobs in Germany, more than wind, solar or liquid fuels. In regions such as the Northeast and north-central states that rely heavily on imported fossil energy for home and

business heating, biomass has the potential to greatly reduce our consumption of higher-priced heating oil and propane. In particular, the Northeast is extremely vulnerable to heating oil price shocks and supply disruptions. In that region, biomass can sustainably offset as much as 25 percent of oil used to heat homes and businesses. BTEC recommends that the Energy Tax Reform Working Group first focus on how the tax code addresses the major end uses of energy. Widely unknown, America’s energy consumption can be divided into thirds: roughly one-third transportation, one-third electricity, and one-third heat (or thermal). Energy policy to promote renewable energy has focused almost entirely on transportation fuels such as ethanol and biodiesel, and electricity from hydro, wind, solar, geothermal and biomass. These fuels and technologies have received support from the federal government in the form of production and investment tax credits, accelerated depreciation, research and development funding, direct project grants, and renewable energy credits (e.g. state-level renewable electricity programs). Although the tax code does address thermal energy in 25D and 48, it primarily promotes generating electricity from biomass and thermal energy from geo and solar systems. Biomass thermal, a proven pathway for reliable, base-load heating and cooling has been omitted from this larger concept of thermal energy. The Energy Tax Working Group should also look to weigh how it determines what technologies are explicitly supported against a technology-neutral approach. Super clean, highly efficient combustion technology is rapidly entering the domestic U.S. marketplace, mostly developed in Europe in response to long-standing industry incentives to encourage technology development. Efficient fuel distribution systems are in place to expand the adoption of central heating systems in home and business heating, industrial process heat, district heating of whole communities, and combined heat and power. This proven technology has been widely deployed in Europe in homes, schools, municipal buildings, factories and any other large institutional, commercial or industrial setting. The bottom line is that biomass thermal fulfills all the same public policy objectives that are by necessity the basis and justification for renewable energy tax incentives. Author: Joseph Seymour Executive Director, Biomass Thermal Energy Council 202-596-3974 ext. 302 jseymour@ttcorp.com

MAY 2013 | BIOMASS MAGAZINE 33

¦THERMAL CONTRIBUTION

Forest Sustainability: Bioenergy Breaks and Barriers While providing some opportunities, forest sustainability framework may hinder bioenergy development. BY ROBERT W. GRAY AND FRANCISCO SEIJO

anaging forests sustainably is a noble idea and can result in a number of very positive social, economic and environmental outcomes. The sustainable forest management (SFM) paradigm as it is being currently developed and implemented by policy networks in Europe and North America, however, may not be the best guide for action everywhere. Originating in the 1990s, the SFM concept was part of the greater effort to develop a sustainable economic development framework intended to guide policymaking efforts through the global environmental challenges of the 21st century. The Ministerial Conference on the Protection of Forests in Europe developed the following definition for SFM: “The stewardship and use of forests and forest lands in a way, and at a rate, that maintains their biodiversity, productivity, regeneration capacity, vitality and their potential to fulfill, now and in the future, relevant ecological, economic and social functions, at local, national, and global levels, and that does not cause damage to other ecosystems.” Other definitions are available, with the central premise in all emphasizing three key areas of sustainability to be harmonized: the environment, society and the economy. Based on these principles, a series of criteria and indicators of sustainability have been developed by a number of expert third-party organizations that exert supervisory control over forest product commodity markets. For a fee, organizations such as the Forest Stewardship Council and the Sustainable Forest Initiative, among others, audit forest operation plans for adherence to the criteria of a particular certification brand. For the most part, these groups have been successful in using public

pressure—by appealing to “green” or socially and ethically responsible consumer habits—to compel forest products manufacturers to adopt a certification system. To date, sustainability certification has focused on traditional products such as dimension lumber, pulp and paper. More recently, the focus has shifted to woody bioenergy products.

Restoration Through Bioenergy The emerging bioenergy sector provides one of the few remaining economic opportunities for restoring resilience to hundreds of millions of hectares of forest in western North America, but the application of SFM criteria may stand in the way. Current landscape issues cannot be addressed with an SFM model based on the nondeclining, even flow of biomass. The current Western forest structure is the result of past management strategies. Beginning in the mid- to late-1800s, public forest administrations attempted to prevent and exclude all fire in ecosystems that had evolved for thousands of years under the influence of this crucial disturbance. The result has been a dramatic increase in forest density, mortality and, in some cases, a wholesale shift in species composition and landscape structure and function. These ecological transformations could conceivably be tolerated by contemporary societies, and even welcomed from a business perspective, if there were no detrimental consequences. Society, the environment and the economy are experiencing quite the opposite, however. Scientists tell us wildfires are currently behaving with an intensity and severity unprecedented in the past 1,000 years. In the past decade in the U.S., wildfires have burned an average of 2.5 million hectares per year (6

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

34 BIOMASS MAGAZINE | MAY 2013

million acres) with annual suppression costs running into the billions of dollars. With a population of barely 4 million people, British Columbia alone experienced wildfire suppression costs exceeding $2 billion in the first decade of this century. Environmental economists suggest the true cost of wildfires can be two to 32 times greater than suppression cost when all factors are considered, including human lives and health, property loss and damage, damage to watersheds and domestic water quality. Climate change researchers also suggest that fire seasons are getting longer on average, which is likely to increase the annual burned area in western North America. Restoring resilience to fire-suppressed ecosystems is contingent on removing the inherent structural threat—the unnatural accumulation of woodsy fuels that is driving current trends in fire intensity and severity. Decades of fire exclusion have resulted in forests choked with high volumes of low-value wood. From an economic perspective, these dense stands of ponderosa pine, Douglas-fir, juniper and other conifer species contain small quantities of more valuable round wood that can be milled into dimension lumber. Ecologically speaking though, many of the larger-diameter, more economically valuable trees need to be left standing due to their fire-tolerance. Thus, the traditional forest products industry has little economic incentive to utilize these resources. There is a vast potential in western North America to mobilize the emerging bioenergy sector and the new market opportunities as an outlet for these large volumes of low-value material threatening western forests and communities. The bioenergy industry can profitably exploit these resources, manufacturing degraded forest materials into wood pellets, biocoal or renewable diesel. The economics of bioenergy utilization can be difficult, however,

THERMALÂŚ because volumes are often low, harvest costs are high, transportation to receiving industries can be costly due to distance and fuel prices, and the prices paid for the raw material (chips) or finished bioenergy product are relatively low. The best available business models combine the harvest of higher-value products, such as sawtimber, with the removal of biomass. Two of the largest contributors to project feasibility are the sale price of biomass products and market availability. Current SFM certification schemes, however, do not provide the needed flexibility for those business models to access the global bioenergy markets. Trade-offs may need to be made among the three utilities that are to be maximized simultaneously: the environmental, social and economic.

(the economic component) in order to achieve the desired environmental outcome. This model works well in productive ecosystems that experience small-scale disturbances, but not in the low-productivity Western ecosystems where disturbances are tending towards large-scale fire and pest events and where climate change modeling suggests that forest productivity will continue to decline dramatically. Treating only the annual increment of volume growth, in an effort to provide sustainable employment and business profitability,

would only lead to a continuation of the current, ecologically detrimental vicious circle of forest health decline and mega fires. In the end, the resulting landscape would be incapable of fulfilling the essential environment, social and economic functions. Authors: Robert W. Gray Fire Ecologist R.W. Gray Consulting Ltd. bobgray@shaw.ca Francisco Seijo Adjunct Professor of Political Science Middlebury College fseijoo@middlebury.edu

Paradoxes in Sustainability In Western forests, the extremely large volumes of biomass need to be removed quickly, if we are to truly reduce the risks and hazards of wildfire in the short- and medium-term. In the long-term, this would result in resilient and sustainable forest ecosystems with significantly lower tree density. Paradoxically, this positive environmental outcome would not result in sustainable employment (social effects) or business activity (economic effects). The initial thrust to treat large areas of the landscape would require large-scale employment in biomass harvest and manufacture but, eventually, those job and business opportunities would be dramatically reduced. The initial landscape intervention phase could take up to a decade or more, but unfortunately, after this initial aggressive forest treatment stage, the employment and business activities associated with low-hazard maintenance would be greatly diminished. This situation thus resembles the â&#x20AC;&#x153;boom and bustâ&#x20AC;? economic model embraced by extractive mining activity. A similar business model may be necessary to solve the ecological dilemma in Western forests, though it may contradict some of the principles of sustainable forest management and may require reformulation. For the current SFM paradigm approach to work in this situation, we would be required to treat the landscape gradually. A slow implementation would harmonize employment outcomes (the social component) with the harvest of the annual increment of volume growth MAY 2013 | BIOMASS MAGAZINE 35

BiogasNews UK biogas development expands rapidly The U.K.â&#x20AC;&#x2122;s National U.K. biogas sites (nonwastewater) Non-Food Crops Centre has announced the country is now home to more than 100 anaerobic digestion (AD) systems that are not affiliated with the water treatment industry. The quantity of these AD plants has more than doubled in the U.K. since September 2011. The NNFCC estimated that the U.K.â&#x20AC;&#x2122;s nonwater industry AD plants currently process up to 5.2 million metric tons of food and farm waste annually with an electric production capacity of 88 MW. According to the center, more than a dozen additional AD plants are currently under SOURCE: NNFCC construction. Nearly half the AD plants currently crops or residues. The remaining digesters operating are community digesters, while are found on industrial sites and take in approximately 40 percent process agricul- waste materials, including food process tural feedstocks, such as slurry, manure, waste and brewery effluent.

Biogas upgrading facility begins operations A project in Indiana is upgrading biogas into transportation-quality fuel. Anaergia Inc. designed, built and now operates the facility, located at Fair Oaks Farms. An anaerobic digestions system processes manure collected from approximately 11,000 dairy cows. The resulting biogas, comprised of approximately 60 percent methane, is cleaned, compressed and upgraded. The upgrading process generates biogas that contains more than 98 percent methane. The

36 BIOMASS MAGAZINE | MAY 2013

purified biogas is compressed to up to 4,000 psig for use in compressed natural gas (CNG) capable vehicles. The system can produce a volume of fuel equivalent to nearly 10,000 gallons of diesel fuel per day. The transportation-grade biogas is used to fuel a fleet of 42 milk trucks operated by Fair Oaks Farms and AMP Americas. Excess upgraded biogas will be injected into the natural gas grid.

BiogasNews

PHOTO: ANAERGIA INC.

NREL updates CREST model for AD systems The National Renewable Energy Laboratory has released an updated version of its Cost of Renewable Energy Spreadsheet Tool for anaerobic digestion (AD) projects. The CREST model is an economic cash flow model that is designed to help stakeholders assess market economics, design cost-based incentives, such as fee-in tariffs, and evaluate the impact of government support structures. The tool allows users to estimate the year-one cost of energy for a particular proj-

ect, as well as the levelized cost of energy. In addition to allowing users to experiment with setting cost-based incentives, the spreadsheet allows project stakeholders to investigate the impacts that different economic drivers have on the cost of energy. The model also helps users understand how different project characteristics, such as project size, feedsock quality, location, or ownership, impact project economics.

Anaergia’s proposed biogas project at the Victor Valley Wastewater Reclamation Authority is expected to save VVWRA ratepayers millions of dollars over the life of the project.

Anaergia to develop biogas project in Calif. Burlington, Ontario-based Anaergia Inc. recently announced that the Victor Valley Wastewater Reclamation Authority in California has voted to enter into a 20-year power purchase agreement with the company to purchase electricity from a proposed biogas project. According to information released by Anaergia, it will design, build and own the biogas energy system, with VVWRA contributing no capital costs to the project. The company also noted that the project will utilize biogas currently being flared. “We’re very fortunate to have the ability to turn that waste into energy and reduce the costs to our ratepayers long into the future,” said VVWRA Commissioner and Apple Valley Town Councilman Scott Nassif. “It’s an exciting project for the agency.” Anaergia noted in a statement that the project will provide a benchmark for the industry by proving that energy independence can be obtained without capital investment under a power purchase agreement. “A lot of eyes will be watching VVWRA once this project becomes active, and we can’t wait to show them how successful this technology will be,” said Logan Olds, VVWRA’s general manager.

MAY 2013 | BIOMASS MAGAZINE 37

AdvancedBiofuelNews BNEF report outlines Bioenergy Leadership Forum Investment in biochemical companies (2004 - H1 2012)

SOURCE: BLOOMBERG NEW ENERGY FINANCE

Bloomberg New Energy Finance recently published a report outlining the results of its Bioenergy Leadership Forum, an invitation-only executive think tank of 50 bioenergy sector thought leaders. According to the report, these leaders noted that the future of next-generation biofuels is closely tied to biochemical production. They said biochemicals are not a means to getting to transportation fuel production, however, as higher margins associated with biochemicals are not likely to help the transition to fuels. Rather, they said it would be

38 BIOMASS MAGAZINE | MAY 2013

easier to prove biofuel processes first, before moving into the chemical markets. The report also specifies that the future of the industry is likely in large, integrated biorefineries that produce fuels and chemicals simultaneously. Panel participants also agreed that biochemicals will not require subsidies to compete with their fossil-based counterparts. Diversification, however, will be a crucial component of risk management.

International biofuel test program takes flight KLM Royal Dutch Airlines, in partnership with the Schiphol Group, Delta Air Lines and the Port Authority of New York and New Jersey, has kicked off a 25-week pilot program that will fuel a weekly trans-Atlantic flight between Schiphol Amsterdam Airport in the Netherlands and JFK International Airport in New York with a blend of biobased jet fuel. Biofuel used in the testing program is being sourced from SkyNRG, a company founded by KLM in 2009 in cooperation with the North Sea Group and Spring Associates. The company recently earned certification from the RSB Foundation for its entire supply chain for renewable jet fuel, including separation, blending and logistics. According to the RSB, SkyNRG is currently the only fuel operator in the world that can deliver certified renewable jet fuel to wing at any airport in the world.

ADVANCED BIOFUELS & CHEMICALS¦

RFS under Attack Once Again BY MICHAEL MCADAMS Congress is back, and so are the same old shenanigans. Yes, it’s April, and it’s time for some to blame the renewable fuel standard (RFS) for the price of gasoline, and everything wrong with the world. Maybe not the entire world, but it sure seems like it if you believe some of the rhetoric I’ve been hearing lately. But here’s what’s different this time: for the first occasion in a decade, the price of gasoline is actually falling in the spring, rather than rising. Now don’t let the facts get in the way of a good public relations campaign, which may be why the antiRFS forces have ramped up their attacks. They’ve managed to get Congressman Bob Goodlatte, R-Va., to introduce legislation to repeal the RFS, legislation that the Advanced Biofuels Association and its members will adamantly oppose. Nevertheless, as I write this column, the American Petroleum Institute and the American Fuel and Petrochemical Manufactures Association are flying in CEOs of oil and refining companies to call for repeal of the RFS. Few think they can ultimately repeal the RFS, but they may succeed in getting Congress to open it up for review. And if that happens, there’s no telling what Congress will do. Last week, the House Energy and Commerce Committee—being spurred by rising ethanol RIN prices and refining industry complaints that it had "hit the blend wall"—asked various interested organizations to comment on the committee’s white paper, which included 11 questions. Most of the questions focused on the current concerns over the percentage of ethanol blends such as E-15, and the “blend wall” (the blend wall is the current blending limit of 10 percent ethanol into the gasoline pool). This year, the U.S. Energy Information Agency predicts the gasoline pool to decrease to approximately 133.4 billion gallons, while the RFS calls for the use of up to 13.8 billion gallons of corn ethanol. In the Senate, Chairman Ron Wyden, D-Ore., of the Senate Committee on Energy and Natural Resources, sent a three-page memo asking for the U.S. EPA to give a full brief on the causes of the rise in the ethanol RIN market and its potential impact on gaso-

line prices. Additionally, he is asking detailed questions about the market participants, and how the trades are structured and taking place. So what do we expect in the coming months? The House Energy and Commerce Committee will broaden its analysis and ask for input on a minimum of three more white papers, and then hold hearings. Meanwhile, the Senate Energy Committee may hold a gasoline price hearing “at some point," but no dates have been scheduled. There are two other issues worth noting. First, EPA has a number of rules it is required to complete in the next few months. These include establishing the mandated numbers for each of the pools under the RFS, as well as another set of rules regulating the RIN pool and creating a quality assurance program for the gallons under the RFS. EPA will tackle other rules, like heating oil definition changes, commingling, pathway approval for technologies, and feedstocks. Also, the current budget debate has driven new interest in the tax code, and the House Ways and Means Committee is asking for comments on the current biofuels tax provisions. ABFA and most of the major trade organizations have submitted comments, although it is too early to know whether there will be new tax provisions. In fact, some argue that Congress should “go big” and propose an entirely new framework for renewable energy. This would be far more difficult, but stranger things have happened in my career. With so much going on, it’s important to stay engaged and follow events closely, as there are multiple pieces in flux that could positively or negatively affect the advanced biofuels industry. Your input matters, so please submit your own comments to the white papers and during the rulemaking comment periods. As always, ABFA will be engaged. Author: Michael McAdams President, Advanced Biofuels Association 202-469-5140 Michael.McAdams@hklaw.com

MAY 2013 | BIOMASS MAGAZINE 39

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