Biomass is sometimes called bioenergy, wood pellets, woody biomass, and more. Biomass means burning wood and other organic materials to produce energy in power plants. Governments incentivize biomass production and combustion to help them meet renewable energy goals. Biomass producers receive billions of tax dollars every year to prop up their unsustainable industry. But is biomass a good or bad investment?
What are energy subsidies?
Governments use energy subsidies to help regulate the energy market. Subsidies can keep electricity costs low for consumers. They also help energy producers remain profitable so they can continue to meet energy demands.
Subsidies come in the form of grants, loans, or other financial awards. Energy producers may receive tax credits, deductions, and deferrals. They can also get preferential tax rates and exemptions.
Why is biomass eligible to receive renewable energy subsidies?
Biomass was supposed to be a temporary fix. Modifying existing coal-fired power plants was quicker than building new renewable energy infrastructure. The European Union was the first to classify biomass as carbon neutral as part of their Renewable Energy Directive (RED). Power plants started burning wood pellets, usually alongside coal, soon after.
The biomass industry has marketed itself as good for forests and the climate. But that has proven to be false.
Biomass producers claim that most of the wood they source is “waste” wood. Yet, waste wood alone can’t meet current demand for bioenergy. So the biomass industry sources from clearcut mature, natural forests. To date, the industry has destroyed more than two million acres of forests in the US South. They claim that bioenergy is renewable because trees grow back. But the industry often advises landowners to re-plant single species pine plantations.
Mature, natural forests are not the same as pine plantations. Biodiverse forests store 50% more carbon than plantations. After a forest is clearcut, it can release carbon for up to 13 years. A forest isn’t guaranteed to grow back. It can take decades, or even centuries, to recover what’s lost in a single clearcut.
Harvesting wood for bioenergy also harms wildlife and degrades habitat. Removing “waste wood” decreases the food and shelter wildlife depend on. This can lead to the displacement or decline of certain species.
Biomass produces more carbon than coal. It destroys the biodiversity of natural ecosystems. Biomass should not qualify as renewable or carbon neutral energy.
Biomass has already received billions, yet they want more.
The biomass industry wouldn’t be viable without renewable energy subsidies. That means biomass is not sustainable environmentally or economically. Foreign governments have invested over $48 billion subsidizing biomass. The US has invested more than $70 million in biomass subsidies. But greedy biomass wants more.
Drax is Europe’s largest biomass power generator. They’re also the second largest biomass producer in the world. They operate five wood pellet plants in Alabama, Louisiana, and Mississippi. Drax receives more than $2.5 million dollars every day in taxpayer subsidies. The UK just approved a $50+ billion investment in Drax’s biomass with carbon capture storage (BECCS). This dubious project with questionable technology will increase energy costs for ratepayers. The UK also plans to extend subsidies through the end of the decade.
Enviva is the world’s largest biomass producer. Enviva operates 10 wood pellet plants in five states across the US South (FL, GA, MS, NC, and SC). The US has granted Enviva more than $9 million in subsidies. Enviva recently applied for more federal subsidies through the US Inflation Reduction Act (IRA). They need our tax dollars to help them expand in Alabama and Mississippi.
Last year, Enviva reported 3rd quarter losses of over $85M. Their stock prices fell off a cliff. The company’s CEO stepped down. This raises serious doubts about their financial stability. The company is renegotiating contracts with the hope it can recover. But Enviva’s future is uncertain at best. Governments that handed out millions in taxpayer subsidies are now facing a failed investment.
The IRA promises the largest investment in US history to reduce carbon pollution. But recent budget reconciliation packages would expand bioenergy subsidies over the next decade. Enviva and Drax are eligible for multiple subsidies through the IRA. They could be awarded billions more.
Investing in biomass funds injustice.
The Biden administration made a commitment to address environmental injustice. Funding biomass does not align with those goals.
Most biomass wood pellet plants operate in rural, environmental justice communities in the US South. Their facilities emit hazardous air pollutants (HAPs) and dangerous fine dust. Most of the pollutants they release cause cancer and harm human health. They release formaldehyde, acetaldehyde, acrolein, and methanol. Fine dust (PM 2.5) can get into your lungs and bloodstream. It can cause lung and heart disease that leads to premature death.
Biomass producers operate where people are struggling. They promise jobs, but it comes at a cost. Their presence may lower property values and raise property taxes. They destroy roads with large logging trucks. Their plants operate all day and night. Biomass causes non-stop air pollution, traffic, and noise.
Industrial logging has existed in these communities for generations. Yet they are some of the most economically disadvantaged areas of the US South. More logging is not the answer. Rural communities need healthy and sustainable economic opportunities. The Biden administration has the power to deny these subsidies and stop funding injustice.
What can we do?
Biomass shouldn’t receive more tax breaks or subsidies. Especially not renewable energy subsidies meant to help us fight the climate crisis. Biomass is bad for our forests, climate, and communities. Biomass is a bad investment.
Instead, we can and should invest in economic development projects that keep forests standing. Let’s keep wealth in Southern communities. Let’s invest in restoration and resiliency jobs and outdoor recreation. Let’s invest in a #JustTransition away from extractive energy and towards renewable energy. Let’s invest in the communities on the frontlines of biomass pollution. Let’s invest in healthy forests and communities of the future.