Wood pellets have long been available to consumers in small packages and were typically burned in residential wood stoves to heat homes. Over the past decade, large industries, primarily in Europe, have latched onto wood pellets to reduce their need for coal and other fossil fuels. This move has given rise to debates. Some argue that burning wood decreases the use of fossil fuels, lowers the carbon footprint of large industries, and creates jobs--particularly throughout the Southeastern United States. Sustainability standpoints and environmental implications figure largely in the debate and opponents of biomass burning say that pellets are only a short term solution to a larger problem.

The European Connection

The wood pellet explosion in Europe, mainly in the United Kingdom, began with the introduction of the European Union's Renewable Energy Directive in 2009. The directive proposed a 20/20/20 target for the EU as a whole: to reduce greenhouse gas emissions by 20% (compared to 1990 statistics), increase renewable energy use to 20%, and increase energy efficiency by 20%. To meet those requirements, many industries in the EU turned to burning biomasss, spending millions to build and retrofit power plants. The European industries have drawn on two main sources of wood pellets - the U.S. and Canada. Currently, the U.S. supplies as much as 75% of the wood pellets to the EU countries. The majority of these pellets come from the Southeastern U.S., mainly North Carolina, Virginia, and the Gulf region. Two of the big four players, Enviva and Drax Biomass, operate facilities in these areas and plan to build more. It's a good deal for these privately owned companies, since they have received government grants up to $500,000 in the name of economic development. The companies are due to continue to receive subsidies until 2027. Biomass users in the EU have also benefitted from tax breaks for adopting methods that comply with the Renewable Energy Directive.

The proof that economic development has resulted cannot be denied, at least in the short term. The amount of data is staggering, but the root is that manufacturers and exporters of wood pellets are rapidly approaching the milestone of 10 million short tons annually. Exports doubled between 2012 and 2013 to 3.2 million short tons. Industry experts predict that the total will increase ten-fold over the next five years. While the U.S. is the largest exporter of wood pellets, the United Nations' Food and Agriculture Organization reports that wood pellet production has increased to 25 million short tons, 60% of which is traded globally. Navigant Research predicts that global revenues could climb to $11.5 billion annually by 2020.

The short term impacts are obvious, as new factories are erected and jobs are created. However, some spectators believe that current and upcoming legislation will change the face of the industry and eventually, supplies will run out, creating an economic downturn and perhaps a succession of ghost towns similar to those created by the coal and oil booms of years gone by.

The effect of the production of biomass products on the pulp and paper industry has not been made clear. One faction of economists argues that the demand for wood pellets will heavily affect the industry, raising costs as much as 31-41% over the next several years. Currently, the industry creates more jobs than biomass does. But with the new pellitizing facilities being erected and the fact that 98 paper and pulp plants have closed in recent years, the data seem to paint a less than rosy future for paper and pulp production in the U.S.

Sustainable Source of Energy?

One of the biggest arguments around the biomass explosion is the claim that burning forest by-products is a sustainable venture. Originally, pellets were made from the detritus of the lumber industry. Studies show, however, that some producders have taken to pelletizing whole trees. Perhaps the most disturbing to environmentalists is the fact that lumber is being produced at a prodigious rate. Reforestation efforts seem to be keeping up with production, but newly planted vegetation cannot provide the same benefit as mature trees. Trees are being harvested at an aggressively and the time period for future harvesting has been reduced from 70 to 60 years. Additionally, clear-cutting hardwood forests creates serious environmental problems. Forest wetlands are vital to protecting a widely diverse range of species in the Southeastern U.S. potentially harming the habitats of waterfowl, reptiles, amphibians, black bears and songbirds. Deforestation also affects the water quality and flood storage essential to the landscape and its residents. While it is true that using wood pellets will decrease the carbon footprint of energy production, burning wood creates an increased level of greenhouse gases.

Legislation

On both sides of the biomass debate, it is clear that everyone wants a sustainable source of energy as long as ecosystems are not damaged. Little legislation currently applies to this relatively new industry and to date, the creation of more legislation seems to be off in the distance while studies are conducted and data gathered. In July, The White House released a statement in response to H.R. 2822 - Department of the Interior, Environment, and Related Agencies Appropriations Act, 2016: "The Administration objects to the bill's representation of forest biomass as categorically 'carbon-neutral.' This language conflicts with existing EPA policies on biogenic CO2 and interferes with the position of States that do not apply the same policies to forest biomass as other renewable fuels like solar or wind. This language stands in contradiction to a wide-ranging consensus on policies and best available science from EPA's own independent Science Advisory Board, numerous technical studies, many States, and various other stakeholders."