January 8, 2016

In this Week's Pellet Wire:



2016 PFI Membership

Be sure that you continue your PFI membership so that you don't miss any member benefits in the New Year. You may renew your PFI membership now by visiting our online renewal page, or you may contact the PFI office and process your renewal via email ([email protected]pelletheat.org) or phone (206-209-5277). Your 2015 membership expired on December 31, so be sure to take steps to renew today to continue to enjoy the benefits of PFI membership.

For those of you who aren't members of PFI, we encourage you to commit to joining the association in 2016. There are a number of opportunities for you to be involved in PFI's initiatives in the year ahead and to benefit directly from PFI's advocacy of policy makers and end users on your behalf. When we are united as an industry, we will have more success seeing the regulatory and legislative outcomes that will benefit all of us. Read more about how membership in PFI benefits your business.

Do you know a company that may be interested in PFI membership? Please contact the PFI office at [email protected] or 206-209-5277. 


 


Government Affairs Updates 

Congress Extends Tax Credit for Residential Pellet Stoves 
In late December, Congress reached agreement on the Consolidated Appropriations Act of 2016 (H.R. 2029), this year's so-called tax extender package. The package this year includes a $300 dollar-for-dollar benefit for residential wood and pellet stoves that are at least 75 percent efficient. Like in previous years, the bill language does not specify whether the efficiency should be measured using the Lower Heating Value or the Higher Heating Value, so it provides some flexibility for taxpayers. 

Since this provision was not extended last year, the package retroactively extended the credit for the entirety of 2015 through December 31, 2016. This tax credit is valid for the purchase of a qualifying biomass stove made between January 1, 2015 and December 31, 2016.

Visit the IRS website for guidance on claiming the tax credit.

Investment Tax Credit Action
The omnibus spending and tax measure that was enacted at the end of 2015 includes several items of interest to the biomass thermal energy sector. 

Despite a flurry of 11th hour communications with key Congressional staff, we were unable to include biomass thermal into the investment tax credit for solar energy that was folded into the legislation. It appears, however, that another follow-up opportunity has presented itself. Shortly after the final text was unveiled certain members of leadership indicated that mistakes were made in the drafting process and that a follow-up tax bill would be pursued early in 2016 to address these issues.  

We are now working with key Congressional offices to secure language qualifying biomass thermal energy in any tax credit provisions that are pulled together in this follow-up package. The first real legislative vehicle is the Federal Aviation Administration authorization, which expires in March. We will keep you apprised of our progress.  


 


Action Requested: Submit Comments in Response to EPA's Proposed Federal Plan

Last year, the EPA's Clean Power Plan, which seeks to curb emissions from coal fired power plants, was finalized. While the plan is final, EPA is still seeking comments on an important portion of the rulemaking called the Federal Implementation Plan (FIP). 

Comments in response to the proposed FIP are due by January 21, 2016. You are encouraged to submit comments in response to this rule, as it will have an impact on your businesses and the entire biomass value chain.

The draft FIP seeks comments on a range of issues relevant to biomass, including how biomass feedstocks should be tracked from harvest to combustion. A significant concern by many is that EPA may require a feedstock chain of custody requirement, adding additional costs to your business operations without any value added to the environment. 

Additionally, it appears that EPA seeks to establish a list of preapproved biomass feedstocks for states to use to meet the compliance requirements of the rule, with additional feedstocks added as the understanding of their climate impact is known over time. 

While the language is ambiguous, it also appears that EPA may require biomass to be sourced from sustainably managed forests, however the rule offers no definition of sustainable management. 

Finally, the rule seems to look favorably upon biomass-based industrial byproducts for which there are no alternative markets; however, the types of biomass feedstocks we use in pellet production have multiple end markets. For example, EPA has concerns with sawdust and its many potential end markets: wood pellet fuel, animal bedding, composite panel manufacturing, and so on. EPA is concerned that if sawdust is deemed carbon neutral and markets for biomass energy become more attractive, sawmills that are currently selling mill residuals to composite panel facilities may begin selling their residuals to wood pellet manufacturers instead.   

States are charged with developing their own compliance plans for meeting the requirements outlined within the Clean Power Plan. EPA has proposed the Federal Implementation Plan as both a model for states to use in crafting their own plans or, alternatively, as the enforceable document in instances where states refuse to submit a plan of their own. Therefore, it is important that the FIP capture the benefits and use of biomass accurately and favorably.  Hearing from all stakeholders is valuable toward the development of a final rule.

The PFI Government Affairs Committee is preparing comments on behalf of the association to submit by the January 21, 2016 deadline. We encourage you to submit your own comments on behalf of your businesses. Early next week, PFI members will receive specific language and a template that can be used for submitting comments in response to the proposed FIP. Be sure to check your inboxes for this information. 

If you'd like more information or have questions as you draft your comments, please contact PFI Executive Director Jennifer Hedrick.

Further Reading:

  • More information on the Federal Information Plan can be found here.
  • An executive summary can be found here.
  • Instructions on how to submit comments by the January 21 deadline can be found here


Register for Breakfast & Biomass in New Orleans, LA

 

The Hearth, Patio and Barbecue Expo in New Orleans, LA is quickly approaching. PFI welcomes all attending Expo to join us for our annual event, Breakfast & Biomass: A Briefing on the Pellet Market, where we will address the latest trends and issues of importance to all involved in the industry. Join us on Friday, March 18, 2016 at 7:30am in the Ernest N. Morial Convention Center. The event will include industry reports, networking opportunities and a full breakfast. 

Please visit PFI's website for more information on PFI sponsorships, or for information on how to register for the $35 breakfast. You may also view the breakfast agenda, which is now posted.

If you are planning to attend Expo, you're encouraged to book your hotel room soon. Hotel accommodations can be made on the Expo website


 


PFI Standards Program Qualifies 9th Pellet Manufacturer: Somerset Pellet Fuel

The PFI Standards Program is pleased to welcome its 9th participating company. Somerset Pellet Fuel in Somerset, Kentucky, officially qualified for the program at the end of December and may now use the PFI Quality Mark on its pellet fuel bags. 

As next year's pellet buying season approaches, PFI is planning a fuel standards webinar the third week of February for all in the industry, but particularly geared toward pellet fuel retailers and manufacturers. More details will be forthcoming. 

Please visit PFI's website for a full list of qualified companies of the PFI Standards Program.


Become a PFI 2016 Sponsor by January 29

Sponsoring PFI is a great way to ensure that your company is closely involved with all of our events and publications, with maximum exposure at a minimum cost. 

We have developed a new sponsorship program for 2016 that will create multiple opportunities for your company in the year ahead. Your company will have great visibility at PFI events, on the PFI website, and in the PFI newsletter, as well as automatic registration for Breakfast & Biomass and other PFI events. The deadline is January 29 to be able to enjoy a year-long sponsorship of PFI and its programs. 

The 2016 Sponsorship packages include benefits such as:

  • PFI Annual Conference registrations
  • Breakfast & Biomass registrations
  • Company logo listed on the PFI website
  • 10x10 booth at the PFI Annual Conference
  • Newsletter advertising
  • Website advertising
  • And more! 
Join a growing list of PFI sponsors today. Visit the PFI website to learn more.

Densified Biomass Survey: Important Update

The following was submitted by the U.S. Energy Information Administration for inclusion in the Pellet Wire.

The U.S. Energy Information Administration (EIA) began development of a densified biomass survey in 2014 following multiple requests from the public and private sector for the agency to improve its coverage of wood-based energy. The development process included numerous discussions with pellet manufacturers, trade associations, and federal and state government agencies. The formal approval steps included two public comment processes in 2015 followed by final authorization by the Office of Management and Budget. 

As finalized, the EIA-63C Densified Biomass Fuel Report is a mandatory survey of manufacturers of densified biomass fuel products in the U.S. The production and sales data collected will be treated as confidential at the company level. Publication will be at an aggregate level sufficient to protect the identity of the individual respondents. EIA has decades of experience in protecting business-sensitive data, such as oil, natural gas, and coal prices.

EIA is tasked by federal law to collect and publish comprehensive energy information that meets the needs of business, the public, and government. EIA was established by the Department of Energy Organization Act of 1977 and assumed responsibility for collection and publication of data on, for example, oil supplies, coal prices, electricity sales, energy imports and exports, and many other aspects of U.S. energy markets. See http://www.eia.gov/.

Data collection will be conducted on the Internet, and is expected to begin on or about February 1, 2016. Respondents were first notified with an initial email on December 22, 2015. EIA will be contacting each biomass fuel manufacturer during January with more information about how to log onto the EIA web portal to access the electronic survey. Additionally, four informational webinars will be held on January 20, 21, 27 and 28 with time for your questions and answers.  Registration instructions for the webinars were included in the initial email on December 22. 

If you did not receive the initial email, please contact EIA at [email protected]eia.gov or call 1-855-EIA-4USA (1-855-342-4872) Monday through Friday, 8:00 AM - 6:00 PM ET. A copy of the form and instructions are available on the EIA web site at http://www.eia.gov/survey/#eia-63c.

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Fuel Availability

Are you a PFI member pellet manufacturer or distributor that has fuel available? Email [email protected] to have your listing updated or added to the PFI website.


Industry News

FAO publishes global pellet statistics for 2014
Biomass Magazine
The Food and Agricultural Organization of the United Nations recently published updated data on the global wood products industry that shows wood pellet production set a new record in 2014.

According to the report, wood pellet production grew by approximately 17 percent in 2014, reaching 26 million metric tons, up from 23 million metric tons in 2013. The growth was driven primarily by increasing consumption in Europe.

The report indicates that approximately 15 million metric tons were traded internationally. Europe accounted for 61 percent of pellet consumption, or 16 million metric tons, and 79 percent of consumption. North America accounted for 33 percent of consumption, or 8.8 million metric tons, and 13 percent of consumption. According to the FAO, trade in pellets from North America to Europe, mainly the U.K., more than doubled when compared to 2013.

Read the Full Article


Biomass developer moves HQ to Charlotte
Charlotte Business Journal
Biomass energy developer Blue Sphere Corp. ended 2015 with a bang, moving its headquarters to Charlotte, pushing to complete its 5.2-megawatt Charlotte project and buying $5.7 million worth of Italian biomass projects.

It also closed on $3 million worth of financing for additional purchases in Italy and continued work on U.S. waste-to-energy projects. Shortly after starting work on the Charlotte plant, Blue Sphere started construction of a similar 3.2-megawatt plant in Rhode Island.

No one from Blue Sphere or the group that handles its publicity, LaunchpadIR, returned phone calls and email messages left by the Charlotte Business Journal.

Read the Full Article


Solar is in, biomass energy is out - and farmers are struggling to dispose of woody waste
Los Angeles Times
It should have been a good year for turning wood and waste into electrons.

A record-setting drought forced growers to bulldoze thousands of acres of trees, and hardly anyone in the Central Valley has permission to light bonfires anymore.

But more than trees have withered in California's sun. The state's biomass energy plants are folding in rapid succession, unable to compete with heavily subsidized solar farms, many of which have sprouted up amid the fields and orchards of the San Joaquin Valley.

Paul Parreira is painfully aware of the irony. The third-generation grower and almond processor is running out of dirt roads where he can spread ground-up almond shells, even as he expands a one-megawatt solar array on six acres of his family's property in Los Banos.

Read the Full Article


Sanderson Academy in Ashfield to heat school with biomass thanks to $171K state grant
MassLive.com
A public elementary school in Ashfield will convert its existing oil heating system to biomass boilers, with help from a $171,598 grant from the state's Dept. of Energy Resources.

The conversion will save Sanderson Academy thousands of dollars every year, and reduce its greenhouse gas emissions, said Secretary of Energy and Environmental Affairs Matthew Beaton in announcing the grant Dec. 23.

Other rural elementary schools including those in Heath and Charlemont won similar grants this year.

Read the Full Article


Upcoming Industry Events

January 28, 2016: Western Forestry and Conservation Association Conference

February 24-26, 2016
: World Sustainable Energy Days 2016

March 18, 2016
: Breakfast & Biomass

March 30-April 1, 2016
: Northeast Biomass Heating Expo

April 5-7, 2016
: Argus Biomass 2016

April 11-14, 2016
: International Biomass Conference & Expo 2016

June 6-9, 2016
: European Biomass Conference & Exhibition

June 15-17, 2016
: International Bioenergy Conference

July 24-26, 2016
: PFI Annual Conference


Pellet Fuels Institute |  [email protected]   | 703.522.6778