EPA Biomass Carbon Rule Delayed Over Potential Ties To RFS, ACE

Source: By Inside EPA • Posted: Wednesday, July 29, 2020

EPA’s long-pending proposal to declare woody biomass carbon neutral for stationary source permits under the Clean Air Act is facing delays, with sources suggesting Trump administration officials are concerned that the plan could create a precedent that might affect the agency’s power plant greenhouse gas rules or its biofuels policies.

The extended biomass plan delay comes after EPA scrambled to release a series of major final rules — most prominently a rollback to vehicle GHG limits and a narrow definition of the scope of the Clean Water Act — earlier this year in part to avoid potential Congressional Review Act attacks from Democrats.

It also comes amid signs that other long-pending rules are facing delays, including proposed tighter air pollution controls for heavy-duty trucks and a final rule scaling back GHG standards for new coal plants.

Issues said to be holding up the biomass carbon neutrality proposal include concerns about how it might affect EPA’s Affordable Clean Energy (ACE) power plant GHG rule, which regulates existing coal plants and explicitly excludes biomass as a compliance option, as well as the renewable fuel standard (RFS), which sets biofuel blending targets based on fuels’ lifecycle GHG improvement over straight gasoline.

Importantly, the RFS targets are based on biofuels with lower GHG profiles of between 20-60 percent — figures that do not account for feedstock regrowth as the biomass plan would.

One Capitol Hill aide says concerns over the plan’s effects on ACE were raised by the Department of Justice (DOJ) and appear to have been resolved early this week, though the rule has not yet cleared the White House Office of Management & Budget (OMB) interagency review, which began Feb. 24.

Meetings with outside groups wrapped up at the end of March, and sources following the rule’s development at the time had hoped for a speedy, 30-day review that has now extended well beyond the normal 90-day period.

The Hill source had expected the proposal to be signed July 22. Acknowledging that deadline slipped, the source nonetheless says all signs still point to its release in the coming days. The source is not clear on how the DOJ concerns were addressed.

Even so, an energy lobbyist tracking the biomass rule says there remains internal EPA disagreement “about the potential crosswalk to the mobile source side,” including how a carbon-neutral label for woody biomass will affect the RFS.

“Yes, they are wandering around a bit,” the source says. “But I still anticipate something in August.”

However, one industry attorney says, “things are up in the air,” raising doubt whether the proposal will be issued at all, while declining to share more details.

An EPA spokeswoman declined to comment on any of the issues holding up the rule, saying only that it is “currently in interagency review.”

Outside Pressure

EPA continues to face strong pressure to move forward with the biomass proposal, including from the forest products industry as well other manufacturers, such as steelworkers, and bipartisan members of Congress.

The agency is also being urged to expand the carbon-neutral designation to crop residues, which could have a direct impact on the RFS. When Administrator Andrew Wheeler testified before the Senate in May, he said he hoped to publish the proposal the following month. He called it the first of a three-phase process that would also address the carbon status of crops, with the broader process unfolding over the next 18 months.

That announcement surprised farm sector groups, with the Corn Refiners Association (CRA) saying it “was certainly news to us.” The group said until March it was led to believe that the pending proposal would address annual agricultural products and it had never been told of a three-phase process. CRA is a member of the Biogenic CO2 Coalition that continues to press EPA on the issue while also suing the agency over its failure to allow biomass to serve as an ACE compliance measure.

A coalition spokesman urges EPA to take the same position on agricultural crops as Europe and the Intergovernmental Panel on Climate Change, which find they do not contribute to elevated GHGs in the atmosphere on net. “As far as RFS and biofuels are concerned, these are entirely different regulatory regimes under different statutory provisions, and as such should be considered independently,” the spokesman adds.

The Hill source adds there is support for using woody biomass under the RFS, while also noting that many members of Congress have pressured EPA to change the biofuel standard in the RFS to be fairer to different fuel stocks.

Another industry source downplays the concerns said to be holding up the rule’s publication, also noting that both ACE and the RFS fall under completely different Clean Air Act provisions than the biomass rule. The RFS is “mainly fulfilled through corn ethanol,” while ACE “is based on statutory provisions that are irrelevant to the question of whether biogenic carbon dioxide is regulated” under the prevention of significant deterioration air act program — the main aim of the biomass rule.

The source notes that EPA has studied the issue for nearly a decade and has solid evidence that using forest products for energy is “highly sustainable” and has an “affirmative GHG avoidance benefit,” arguing it releases fewer emissions when burned for energy then if left to naturally decompose.

If there are discrepancies over effects on other rules, “that is not something that should be a significant concern,” the source stresses, and notes the industry’s eagerness to see the proposal signed.

In a recent Morning Consult op-ed, officials with the American Forest & Paper Association (AFPA) and the United Steelworkers wrote: “An important step toward protecting . . . domestic jobs is definitively designating wood biomass energy as carbon neutral, as it has been elsewhere around the world. . . . Until our bioenergy is designated as carbon neutral, it will be subject to cumbersome regulations and permit processes and can’t be counted on as a fuel of the future. When federal policymakers waffle on the issue of biomass energy, it becomes difficult for domestic companies to compete globally.”

AFPA chief Heidi Brock says in a statement to Inside EPA, “The time has come for the EPA to move swiftly to provide much-needed regulatory certainty” by issuing the biomass rule.

Also, four bipartisan House members, including Reps. Rodney Davis (R-IL) and Collin Peterson (D-MN), and the American Farm Bureau Federation have written recent letters to Wheeler urging him to both issue the rule and include crop residues.

However, environmental groups broadly oppose designating woody biomass as a carbon-neutral fuel, and they hailed the Democratic staff report from the House Select Committee on the Climate Crisis that distinguished “low-carbon sources and biomass that aggravates climate change.”

Other Rules

Meanwhile, EPA is facing delays on other key rulemakings. For example, the agency filed a July 23 status report in a stalled lawsuit over Obama-era GHG rules for new coal plants, writing that it is “preparing the final [replacement] rule package to go to [OMB] for interagency review. Due to delays related to the COVID-19 pandemic, EPA expects to send the package to OMB during the summer of 2020. EPA’s intention and expectation is that the Agency will be in a position to take final action on this proposed rule in the late summer of 2020.”

Issuance of that rule has repeatedly slipped, and EPA previously indicated a final rule would be out by now.

Also, sources have said EPA appears to have given up on efforts to issue its long-awaited proposal to set stronger nitrogen oxide limits on heavy-duty trucks until after the election, despite top officials touting the measure as a win for both air quality and industry. — Dawn Reeves(dreeves@iwpnews.com

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