The federal government has been shovelling your money off the back of a truck, one billion dollars worth, to the pulp and paper industry, mostly to help them burn “biomass” for energy. But there’s not much green about the Green Transformation Fund.

BY: ROB WILTZEN

A combination of federal government subsidies, changes in the pulp and paper market and questionable energy policies threaten British Columbia forests as they come to be viewed as bioenergy.

Tough times for the pulp and paper industry have called for change, and the industry appears to have diversified to energy production. Pulp mills already have the facilities for energy production, they have been given $1 billion in federal funding for the capital upgrades required, and they have a willing partner with BC Hydro offering lucrative power purchasing agreements.  [See  companion article “BC’s Bio Boondoggle“] Further, there’s a profitable future in saleable carbon credits.

The entire scenario is founded on the use of ‘biomass’ as renewable energy and it’s become a bit of a gold rush.

Biomass Energy = Environmental Improvement??

Reducing fossil fuel use is widely accepted as a paramount environmental objective, due to climate change. Meeting that objective at all costs and turning a blind eye to any other policy implications can be disastrous. The diversion of crops to ethanol fuel instead of food, for example, has consequences for food prices, distribution, and agricultural practices.

Alternatives may present dubious benefits for climate change when all factors are included in the equation. Likewise, the rush to utilize the bioenergy of the forest is short-sighted. The Carbon-Neutral Myth Biomass is considered to be carbon- neutral in Canada because the carbon that is emitted from its combustion is no more than was absorbed during its lifetime and the same amount of carbon will be re-absorbed by re-growth. This perspective is not universally accepted.

In the United States, the EPA has postponed for three years the permitting requirements under the Clean Air Act for biogenic CO2 emissions such as those from burning wood or black liquor. They recognize that these emissions are not all created equal and cannot be counted as carbon-neutral as an entire category, if at all. A number of organizations consider that forest biomass is no more carbon neutral than burning coal. A report, Biomass Sustainability and Carbon Policy Study, commissioned by the Massachussetts Department of Energy Resources, calculates that more greenhouse gases would be emitted per unit of energy using wood instead of fossil fuels. The study contends that carbon accounting for forest biomass depends on a number of factors such as forest management, the life cycle of the trees used, and the type of energy produced.

Burning biomass releases the carbon that it contains, creating a carbon ‘debt.’ That debt can only be repaid by re-growth and re-absorption, which takes time. The biomass is only carbon-neutral after the debt is paid. Calling biomass carbon-neutral is akin to saying that a 25 year mortgage is debt-neutral since the debt will be paid back over time – at least theoretically. Whether the debt is actually paid back, or re-borrowed, or re-sold to someone else is not known at the time the first debt is incurred.

The pulp mill corporations are getting the benefits of calling biomass ‘carbon-neutral’ today, even though it will not be neutral for decades, and depends on a number of factors outside their control. The mills are profiting for frontloading an alreadyoverburdened atmosphere.

Toxic Loading

Power boiler plumes can load the airshed with heavy metals, particulate and some of the most toxic chemicals known. In British Columbia, coastal pulp mills have long been recognized as a leading source of dioxins from the ‘salty hog’ fuel used in power boilers.

Hog fuel is ground up wood, generally residue from logging, sawmills and pine-beetle impacted forests. In coastal mills, logs are stored or transported in booms on the ocean, making the hog fuel high in salt content. Incineration of such salt-laden hog fuel leads directly to the formation of dioxins.

A clear environmental priority for coastal mills is to reduce the dioxin emissions from the power boilers. The federally funded Green Transformation Fund projects have instead seen hundreds of millions of dollars directed to increasing the capacity of the power boilers, instead of the various technology projects being called for by local citizen groups to reduce dioxins and other problem emissions. The “green” projects could, ironically, actually increase dioxin emissions.

Green Transformation Fund

When the Green Transformation Fund was announced in June 2009, it was the Canadian response to an unfair American subsidy. In the United States, pulp mills had taken advantage of legislation intended to encourage renewable energy, to gain tax credits for their use of black liquor, a by-product of the kraft pulp process, as fuel. The practice of burning black liquor in pulp mill recovery boilers has been standard practice in pulp mills since the 1940s, so the tax credits, billions of dollars worth, were awarded for a ‘business as usual’ process.

Canada rightly called this an unfair industry subsidy, but instead of pursuing recourse through international trade bodies, responded with its own industry subsidy. The $1 billion Green Transformation Fund was born as a direct giveaway to Canadian pulp mills to boost their international competitiveness. The funds were ‘Green’ in that they were awarded to projects proposed by mills that would ‘demonstrably improve their environmental performance.’ The vague criterion was not specified any further, nor was it referred to the bodies responsible for environmental regulation. Environment Canada and the provincial regulatory bodies were left out of the discussion. Instead the mills put forward proposals to Natural Resources Canada, a separate branch of the federal government in charge of administering the fund. The fund is close to three quarters allocated at this point.

What Has It Accomplished

A significant portion of the dollars awarded thus far have been directed towards increasing the capacity of pulp mills to burn biomass in power boilers.

Biomass is organic material such as crops, wood waste from sawmills, residue from logging operations or, in fact, conceivably any timber, such as the forests themselves. The British Columbia forests affected by the pine beetle kill are instrumental in the plan. The pine beetle kill, however, is of limited quantity. It is unclear what will replace the beetle kill to fuel the voracious industrial capacity for biomass being built by the Green Transformation Fund.

BC Forests as Fuel

In British Columbia, power is sold through BC Hydro, a provincial crown corporation. When the federal “Green Transformation Fund” appeared with hundreds of millions of dollars available for the required capital, BC Hydro was not slow to recognize the opportunity. They introduced their Integrated Power Offer for Pulp and Paper companies, to help them secure funding under the Green Transformation Program. They have assigned teams of experts to work with their eight pulp and paper company customers to develop the proposals.

BC Hydro plans to extend their integrated power offer to other industrial sectors. The scenario raises dual concerns: first, the missed opportunity to direct funds towards accepted environmental priorities; and second, the acceleration of biomass energy with its dubious climate change claims and unclear implications for the province’s forests.

Source of the Biomass

The BC Bioenergy Strategy (www.energyplan.gov.bc.ca/bioenergy) “aims at turning BC’s abundant biomass reserves into low-carbon energy opportunities.”

According to BC documents, 53% of the opportunity is to be from forestry operations, not including the temporary pine beetle kill. Biomass, in the form of hog fuel, has long been a source of energy for pulp and paper companies for their own power needs, but the expansion of power production for sale to BC Hydro represents a significant shift. Energy production has become a third product and revenue stream for the mills. We are witnessing a policy shift that is geared towards meeting energy demands by liquidating forests.

Pulp mill corporations are paid to build the capacity, and then paid for the energy produced, and then paid for the carbon credits they earn by producing ‘renewable’ energy. The market incentive to turn forests into fuel is strong.

As long as forest biomass is considered to be carbon-neutral, the real costs to the environment are not factored into the market equation. Other implications for biodiversity and toxic pollution continue to play second fiddle to free market economics which ignore these ‘externalities.’ Environment Canada and the BC Ministry of Environment tacitly support the new direction by condoning the carbon-neutral myth, but have largely been left out of the conversation.

What is clear is that the turning of forests into fuel is expanding quickly across the country in the absence of a clear understanding of the implications for forest eco-systems.