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Credit scheme allows "off the books" logging to detriment of forests, says researcher

Allegation of live trees going to pellet plants puts climate benefits into question
cut block
A cutblock of trees harvested for Pinnacle Renewable Energy, now owned by the UK's Drax.

As evidence mounts that more and more low-value trees are being harvested in B.C. to feed the growing wood pellet industry, B.C.’s forestry and environment ministers may have some explaining to do.

To date, the B.C. government has not done a very good job of explaining the environmental calculus that could very well justify the harvesting of trees to be burned to produce power in Europe.

It has therefore left the growing wood pellet industry in B.C. vulnerable to criticisms that cutting down trees in B.C. to produce power in the UK is environmentally regressive.

new report out today by the Canadian Centre for Policy Alternatives (CCPA) raises questions about the increased harvesting of whole live trees to feed the growing wood pellet industry, which appears to be growing in proportion to the shrinkage of traditional sawmilling.

As the CCPA report points out, while B.C.’s conventional lumber sector has been in decline, the number of wood pellet producers has grown, from eight in 2006 to 13 today. And one new one is proposed for the Fort Nelson by Peak Renewables.

Initially, like pulp mills, pellet producers mostly used wood waste from sawmills, though low value pulp logs have also traditionally been used.

But as sawmills have shuttered, reducing the amount of wood waste available, and as beetle infestations and fires have rendered large swaths of forest in B.C. worthless to lumber producers, more and more dead, damaged and otherwise low-value trees have been used to feed pellet mills.

Now pellet producers are harvesting more and more live trees, says Conservation North. It points to publicly available data that shows “primary forests” in the central interior are being logged to feed pellet mills.

“Some people didn’t believe us when we told them that B.C. is allowing this because the B.C. government has said from the beginning that only residuals from logging go into pellet plants,” said Conservation North director Michelle Connolly. “Now we have proof that this isn’t true.”

In a video interview with Canadian Biomass, B.C.’s Chief Forester Diane Nicholls, defended the wood pellet industry, saying mostly wood waste and forestry “residuals” are used.

“It uses residuals from sawmill production that may not be used otherwise, and it also is starting to use harvest residuals that we know is not being used currently, and that is a win,” she said. “It fills a niche in our sector that we didn’t have before.”

It’s not clear, however, if “harvest residuals” includes whole live trees harvested specifically for wood pellet production.

In the past, a lot of harvest waste, including whole but small low-value trees, were simply burned in slash piles. The government therefore created a credit program that incentivizes forestry companies to deliver that harvest waste to pulp mills and wood pellet plants, rather than simply burn it.

The CCPA is now questioning that credit program, saying it allows for “double-dipping” by not counting any trees delivered to pulp mills and pellet producers against their annual allowable cut (AAC).

Under that credit program, B.C. forestry companies are allowed to log more trees than they might normally be allowed to under the AAC, says the report’s author, Ben Parfitt.

“In its June report, the government disclosed that the credit logging doesn't count towards a company’s logging entitlement, known as its Allowable Annual Cut or AAC,” Parfitt writes. “That means that one of the only tools the government has to control logging rates – a cap – is badly compromised.

“The credits effectively amount to a government-sanctioned double-dip for the logging companies. But the biggest consequence may be that the bonus logging is off the books.”

Parfitt tried to get numbers from the B.C. government to try to quantify just how many trees are being logged “off the books,” but says the government "cannot or will not say how many millions more trees have been logged as a result of the credits."

But Parfitt did manage to find publicly available data that hints at the scale.

“In the Prince George area alone, a 2017 report by the province’s chief forester, Diane Nicholls, found that in just one five-year period, logging companies cut down an additional 2.4 million cubic metres of trees under the credit scheme, with much of the downed trees going to the region’s wood pellet mills, a bottom-feeding industry that cares not a whit whether its wood comes from centuries-old or 20-year-old trees,” Parfitt says in his report.

“Traditionally, pulp and paper mills relied mostly, but not exclusively, on the mountains of wood chips and sawdust generated at sawmills, where, as a consequence of round logs being turned into rectangular products, only about half of each log ends up as lumber.

“But with surging wood pellet production putting the squeeze on a finite wood supply, it wasn’t long before both pellet mill and pulp mill owners were clamoring for huge numbers of whole logs. With droves of trees being cut down and left where they’d fallen, the challenge became how to convince Canfor, West Fraser and others to bring those logs into town.”

The credit program appears to have been successful. Harvest waste is now delivered to pulp mills and wood pellet producers to create value from something that otherwise would literally have just gone up in smoke.

“Left completely unsaid is how saving wood from being burned at logging sites only to deliver it to pellet mills that make a product that is then burned equates to a climate benefit,” Parfitt says.

Sustainable energy experts say that there can, in fact, be a climate benefit, if electricity generated from burning wood pellets displaces coal.

In the UK, the British Utility Drax has managed to eliminate coal entirely from its thermal power plant by switching to wood pellets. Earlier this year, it acquired B.C.’s Pinnacle Renewable Energy, which owned several pellet plants in Western Canada.

The Intergovernmental Panel on Climate Change (IPCC) Working Group 3 says there could be significant GHG emissions reductions, if biomass power generation (i.e. burning wood pellets instead of coal) is paired with carbon capture and storage – something Drax is currently proposing to add.

Biomass with CCS could provide “negative emissions,” the IPCC says. Adding CCS at its power plant in the UK would mean that Drax would be sequestering more CO2 than it produces – about 8 million tonnes annually.

By campaigning against the wood pellet industry in B.C., environmentalists could be actually working against something identified by the IPCC as an important tool for fighting climate change.

Biomass made from trees as an energy source is contentious, however. In warmer regions where trees are fast growing, there may indeed be net benefits from using biomass instead of coal.

But in colder climates, where trees do not grow back as quickly, there could be a “carbon debt” that makes biomass harder to justify.

Chris Bataille, adjunct professor at SFU’s School of Resource and Environmental Management and co-author of the Deep Decarbonization Pathways Project for Canada, told BIV News in September that the net neutrality of bioenergy is “highly feedstock and case dependent.”

The problem with harvesting live trees for bioenergy is the carbon debt, he said: the time it takes for a tree to regrow and sequester all the CO2 that was released through combustion.

If only wood waste is used, that debt is less, which increases when live trees are harvested, and increases even more with older trees.

If the B.C. government wants to defend the growing wood pellet industry in B.C., it may need an independent study that explains just how much actual waste is used to feed wood pellet plants, how many live trees, and a GHG life-cycle analysis that would demonstrate whether or not there is a net benefit, from a climate change mitigation perspective.

BIV News has asked the ministry of Forests, Lands and Resource Operations to respond to the CCPA report.