"The professionalization of the biomass industry is a problem that needs attention."--Bas Eickhout, Dutch politician and member of the European Parliament.
When it comes to the global shift to low-carbon energy sources, Europe has traditionally been viewed as the world leader while the United States has frequently been regarded as an important, albeit grudging, participant. Over the past half-decade, China has also improved its stock in the fast-growing market through a plethora of heavy investments, especially in solar and wind.
For the most part, those views appear merited: Renewables rose to generate 38% of Europe's electricity in 2020 (compared to 34.6% in 2019), marking the first time renewables overtook fossil-fired generation, which fell to 37%. In contrast, the IEA estimates that natural gas and coal generated a combined 61% of electricity in the United States in 2020, with renewables accounting for just 20%.
Earlier this year, the EU earned extra bragging rights after renewable energy surpassed the use of fossil fuels on the continent for the first time in history.
In contrast, the United States' standing in the energy transition cycle took a significant hit after former president Donald Trump fulfilled a key campaign pledge by withdrawing the United States from the Paris climate agreement, joining the likes of Syria and Nicaragua as the only countries not party to the agreement.
But maybe Europe is not as clean as it has made the world believe—and the United States is not as dirty.
In 2009, the European Union issued a Renewable Energy Directive (RED), pledging to curb greenhouse gas emissions and urging its member states to shift from fossil fuels to renewables. But the fine print provided a major loophole: the EU classified biomass as a renewable energy source, on par with wind and solar power.
Following the directive, EU governments have been incentivizing energy providers to burn biomass instead of coal, driving up huge demand for wood.
In fact, the EU has been importing so much biomass from the American South that it has emerged as Europe's primary source of biomass imports.
It turns out that for more than a decade, European power plants have merely been reducing their carbon footprint on paper by outsourcing their footprint to the United States.
United Nations Loophole
Back in 1996, the United Nations (UN) devised a method to measure global carbon emissions. In a bid to simplify the process and avoid double counting, UN scientists suggested that biomass emissions should be calculated where the trees are cut down, not where the wood pellets are burned.
The UN adopted this methodology in its Renewable Energy Directive, allowing energy companies to burn biomass produced in the United States without having to report the emissions.
The UN was clearly more concerned about the amount of carbon we are putting out into the atmosphere regardless of the source. This source-agnostic approach has, however, been creating a lot of controversy amongst policymakers, advocates, and scientists—and now the investment community.
"I can't think of anything that harms nature more than cutting down trees and burning them," William Moomaw, professor emeritus of international environmental policy at Tufts University, has told CNN.
"It doesn't change the physical reality. A law designed to reduce emissions that in reality encourages an increase in emissions … has to be flawed," Tim Searchinger, senior research scholar at Princeton University, has told CNN, referring to Europe's directive.
According to Bas Eickhout, Dutch politician and member of the European Parliament, "The idea was to curb our addiction to fossil fuels. Biomass was an attractive option for EU countries at the time, he explained, because it was much cheaper than solar or wind power and could be "mixed in" when burning coal. But the production of biomass has become an industrial process which means something has gone fundamentally wrong. The professionalization of the biomass industry is a problem that needs attention."
Eickhout says European decision-makers "were too naïve" and didn't fully consider the repercussions of importing biomass.
Following the EU loophole, 164 acres of North Carolina's state's forests are cut down by the biomass industry every day. North Carolina's Clean Energy Plan acknowledges that most of the wood pellets produced in the state are exported to Europe but does nothing to advance the state's clean energy economy. Prominent players in the trade are Drax and Enviva, which have acquired and are developing wood pellet plants in the American South.
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Luckily for investors, the US clean energy landscape has just gotten a lot more competitive.
Just months after president Biden rejoined the Paris Climate accord, global energy market navel-gazer IHS Markit has ranked the United States as the most attractive market for renewable energy investments in the world.
The United States has claimed the top spot on the latest IHS Markit Global Renewables Markets Attractiveness Rankings mainly on account of sound market fundamentals and the availability of an attractive—although phasing down—support scheme. The survey tracks attractiveness for investment for non-hydro renewables such as solar PV, offshore wind, and onshore wind. The ranking evaluates each country on the basis of seven subcategories that include market fundamentals, current policy framework, infrastructure readiness, investor friendliness, revenue risks, and return expectations, easiness to compete, and the overall opportunity size for each market.
As expected, Europe dominates the top echelons, with Germany coming in at #2, France #4, Spain #5, and the Netherlands at #9. China has been ranked the third-best market for renewable energy investors, while India is #6, Australia #7, Japan #8, and Brazil #10.
Wind and solar power capacity expanded rapidly in 2020, with BP Plc. (NYSE:BP) reporting in its annual Statistical Review of World Energy that the two sectors recorded a colossal 238 GW increase in installed capacity last year mostly at the expense of coal-fired generation, which fell 4.4%, easily one of its largest annual declines on record. However, BP warns that the impressive growth could merely be transitory due to the effects of the pandemic and says the world still needs "tangible, concrete differences" to meet climate targets.
By Alex Kimani for Oilprice.com
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Clear-cutting large swaths of forest is not good for the environment even if they are replanted. It takes years to regrow forest cover that keeps the topsoil from washing into the lowlands, not only destroying the soil where the trees are clear cut but filling the rivers downstream thus radically increasing the chances of flooding and filling the hydro electric dams with the erodable soil, greatly reducing their reservoir capacity.
Cutting individual trees, trimming the forest growth of undesirable species, or even cutting small areas with protection from erosion and replanting is not the problem that Dr. Moomaw is addressing. He is addressing the devastation similar to that of the Amazon Basin and that that is occurring in the Carolinas.