Subsidized Wood Pellet Exports to Increase Pollution and Forest Mayhem

The US Federal Government promotes, discourages, taxes, subsidizes and regulates a range of energy policies toward European countries. Current policies raise costs, consume tax dollars, reduce energy reliability, and increase pollution. What’s not to like? (sarcasm..)

For Stoa debaters with the resolution: Resolved: The United States Federal Government should substantially reform its policy towards one or more countries in Europe. And NCFCA debaters with the resolution: The United States Federal Government should significantly reform its import and/or export policy. Reforming energy policies toward (and import/export policy with) European countries seems fertile ground for reform.

For a start, current USFG and Europe policy is funding Russia’s invasion of Ukraine. Germany, Europe’s largest economy (30% larger than France) launched Energiewende (energy transformation) to shift the German economy from fossil to renewable fuels. Results so far: Germany’s energy costs are higher and supply less reliable, and now Germany depends upon natural gas imports from Russia, which is using natural gas export earnings to fund its invasion of Ukraine.

The German policy of vastly increasing its dependence on highly-subsidised renewables is known as the Energiewende (energy transition) and is based on the Energiekonzept (energy concept) policy published late in 2010, as well as the Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG) passed in 2000.

Germany’s Energiewende (from the World Nuclear Association)

USFG policy play into the German/European disaster in a number of ways. One is USFG restrictions of natural gas exploration, regulation of methane and CO2 emissions, and blockage of interstate natural gas pipelines (to LNG facilities for export to Europe). So the cleanest, least expensive, and most reliable energy is heavily taxed and regulated, while the most expensive, polluting, and environmentally destructive energy export is being subsidized (i.e. biofuel wood pellets). See: There’s a Booming Business in America’s Forests. Some Aren’t Happy About It. (New York Times, April 19, 2021) The dirty little secret behind ‘clean energy’ wood pellets (The Guardian, 30 June 2018)

But Germany is not the only country promoting an energy transition. UK, Netherlands and other European countries are subsidizing wind and solar power, along with pellet power. Biomass Magazine report the latest tonnage (June 7, 2022):

The U.S. exported wood pellets to more than a dozen countries in April. The U.K. was the top destination at 498,208.9 metric tons, followed by the Netherlands at 74,654.2 metric tons and Denmark at 52,263.9 metric tons.

The value of U.S. wood pellet exports reached $145.41 million in April, up from both $127.33 million in March and $82.91 million in April 2021.

The theory of wood pellet sustainability is that as trees grow they absorb carbon dioxide from the atmosphere. As wood pellets from these trees are burned to generate heat and electricity in European countries, this CO2 is released back to the atmosphere… and then absorbed again by fast growing trees in the American south.

Among the problems with this ecological model is the environment and economic cost of cutting, processing, and transporting these wood pellets from the American south to European country wood pellet processing plants.

A recent story Europe considers rules changes that would limit US pellet industry (WFAE 90.7, May 19, 2022 notes that reforms may be coming:

A European Parliament committee voted Tuesday to revise rules that allow power plants to count wood pellets, or wood biomass, as carbon-free. That’s even though pellets emit more carbon than coal when burned.

Over the past decade, the policy has spurred an increase in logging and plant construction in the U.S. Two dozen wood pellet plants are now operating from Virginia to Louisiana, including four in North Carolina and two in South Carolina.

Environmental groups have been campaigning against the industry, arguing that wood-fired energy is not climate-friendly and that wood pellet plants bring environmental concerns to their communities.

One of the problems here is that the whole industry is artificial, a child of subsidies and carbon-offset policies in the US and Europe. Consider too the opportunity costs. Think of all the trees harvested for wood pellets: what else can be made from trees? Lumber for example can be used to build houses. (Though the wood pellet industry claims they: “use tree tops, underbrush, and smaller branches from each tree, material that is often discarded by other wood-based industries such as lumber or paper production.” More on the debate: How ‘Green’ Are Wood Pellets as a Fuel Source? (Wired, November 18, 2021):

IN THE SEARCH for a clean source of energy, a contender has emerged: little pellets of compressed wood. Harvested from forests in the American South, pine and hardwood trees are dried, compressed, and turned into inch-long pellets that are burned as fuel in electric power plants, mainly in the United Kingdom and Europe, to power homes and businesses.

Under rules grandfathered into the Paris Climate Agreement and reaffirmed this summer by European regulators, burning trees for electric power is considered a carbon-neutral energy source—as long as the trees are replanted. The wood pellet industry argues that it provides an alternative to coal and relies on a sustainable resource: forests that will regrow in the future and remove carbon from the atmosphere.

But many scientists and conservation groups say the opposite: that burning wood is as dirty as coal, and the claim of carbon neutrality is an error that will boost emissions…

In any case, the wood pellet industry is booming. The main UK plant consumes a great many pellets as well as a million dollars a day of UK taxpayers (pounds). And on top of that, emits more pollution than coal. Wood pellets are a tax and subsidy reliant energy industry that would quickly be buried by market-based energy sources like natural gas (or thorium!)

But the business opportunity initially was created mainly because of two things. First is global accounting policies that treat wood pellets as zero carbon, even though they actually emit more carbon than coal when burned. But when you do the carbon accounting, that’s the way it works out. And government subsidies on both sides of the Atlantic promote cutting forests and burning wood pellets for energy.

The Drax plant in England is the largest consumer of wood pellets and it’s the main customer of Enviva. It burns wood pellets in place of coal, and it gets more than $1 million in British government subsidies every day. Altogether, the industry gets more than a billion dollars in subsidies and tax credits every year for burning wood.

Wood energy’s future looks strong as long as subsidies, carbon accounting rules remain (WFAE 90.7, December 16, 2021

Wood Pellet /biomass update:
• Video: Linnea Lukin, Exploring Energy: Biomass
• Study: ENERGY AT A GLANCE: BIOMASS

For more on Russian influence supporting anti-fossil fuel protestors and environmental organizations, see Russia used ‘soft power’ to influence EU policies and anti-fossil fuel efforts (The Hill, March 22, 2022). And from 2014 on blocking natural gas exploration in Europe: Is Russia Funding Europe’s Anti-fracking Green Protests? (Hudson Institute, July 7, 2014)

For more on wood pellets and biomass, see these MasterResource.org posts:

• Environmental Accounting and Green Subsidies: The Biofuels Mistake (MasterResource.org, December 4, 2018)

• Sustainability: Ideology versus Reality (Part I: Biofuels and Solar), MasterResource.org, August 26, 2019)

• “Energy and Society” Course (Part III: Electricity from Hydro, Nuclear, Renewables, Biomass), (MasterResource.org, April 2, 2019)

• Biomass: The Air Emissions Renewable (scientists want wood taken off of politically correct list) (MasterResource.org, February 11, 2015)