BIOMASS HUB

In keeping with its reputation as a global pioneer in the area of environmental policy, California has forged ahead with greenhouse gas (GHG) cap-and-trade regulation by releasing a Preliminary Draft Regulation (PDR) yesterday.  The announcement from California’s Air Resources Board (ARB) comes just weeks before the international community is set to descend on Copenhagen in a contentious effort to put a band-aid over Kyoto and represents a willingness to intervene where the US Congress has dragged its feet.

The regulations will have dramatic implications for the biomass industry, both in California and in the region.

ARB Chairman Mary D. Nichols notes:

As world leaders prepare for another conference at which no new international treaty will be signed, it is important that the public understand that progress in reducing emissions continues. By releasing the first draft of a cap-and-trade system that California will put into effect in 2012, we are demonstrating the state’s determination to push ahead, continue to work with other states in the U.S. and abroad, and invite others to join us.

PDR Background

The regulation  marks the next phase of California’s landmark Global Warming Solutions Act (AB 32) signed in 2006 by Governor Schwarzenegger, which is scheduled to culminate in ARB’s consideration in 2010 of the first broad based cap-and-trade program in the United States.  AB 32 mandates that the state must reduce GHG emissions to 1990 levels by 2020.  The AB 32  Scoping Plan identifies a cap-and-trade program as one of the main strategies to reach this target.

Once adopted, a California cap-and-trade program integrated with similarly rigorous programs implemented by partners of the Western Climate Initiative will include a stringent declining emissions cap along with trading and the limited use of offsets to provide flexibility for covered entities to comply.  The program will set an absolute limit on sources of 85 percent of the state’s pollution, including emissions from electricity generation, large industrial sources, transportation fuels, and residential and commercial use of natural gas, and dial back pollution levels by 15 percent between now and 2020.

Biomass Gets a Break

Stationary sources that burn biomass fuels will be exempt from obligations to surrender allowances, meaning that for biomass-related emissions, a cap will not apply.  However, biomass CO2 emissions from stationary sources would count toward the total GHG emissions that must be reported.

Under the proposed rules, the following definitions are proposed:

• “Biomass” –

ARB is considering the use of the definition contained in the “Renewable Energy Program: Overall Program Guidebook,” 2nd Ed., California Energy Commission, Report No. CEC-300-2007-003-ED2-CMF, January 2008. ARB is also considering biomass to mean non-fossilized and biodegradable organic material originating from plants, animals and micro-organisms, including products, byproducts, residues and waste from agriculture, forestry and related industries as well as the non-fossilized and biodegradable organic fractions of industrial and municipal wastes, including gases and liquids recovered from the decomposition of non-fossilized and biodegradable organic material. In the context of this article it may be necessary to modify this definition.

• “Biomass fuels” or “biomass-derived fuels” –

Fuels whose entire heat generating capacity is derived entirely from biomass.

Generally speaking, the proposed rules cover facilities using certain processes (including cogeneration), electricity deliverers (NOTE: provisions for when CO2 emissions from stationary combustion of biomass fuels will be subject to regulation are still under development), and transportation fuel deliverers (including biomass fuels).  ARB staff is considering whether emissions from liquid biofuels producers and importers will be covered, namely, how surrender obligations will be calculated.

For a PDF copy of the Proposed Draft Regulation (PDF) click here.

Image: Flickr/*~Dawn~*