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DAR-12 Response to Comments Summary

On May 19th, 2010 the New York State Department of Environmental Conservation (Department) provided notice in the Environmental Notice Bulletin (ENB) regarding the availability of a draft Program Policy entitled DAR-12, "Sustainably Harvested" Determination for Purposes of "Eligible Biomass," Part 242 (Policy). Public comments were accepted on the draft Policy for 30 days, through June 18, 2010. The purpose of the Policy is to establish the criteria by which sources of forest-based woody biomass, and unadulterated wood and wood residues, will be evaluated by the Department in order to determine whether they are "sustainably harvested" for purposes of being considered "eligible biomass" pursuant to the CO2 Budget Trading Program, 6 NYCRR Part 242 (Part 242).

Comments on the proposed draft Policy were received from 18 parties. This document provides a summary of the Department's responses to the most common comments that were received during the public comment period.

Policy Context

The Department received a substantial number of general comments about the proposed Policy that seemed to misconstrue the Policy's context. For example, many commenters were concerned about what they saw as a potential for wide-ranging impacts on the New York State biomass industry as a result of this Policy. Similarly, many commenters seemed to erroneously believe that the Policy would prohibit the burning of certain types of biomass.

The Policy only concerns a narrow provision, within one specific Department program, and whether certain biomass fuels may be used for compliance with that program. The Policy will only be applicable to a very narrow category of sources. In particular, the Policy will only be potentially relevant for facilities that: (1) are CO2 budget sources required to comply with Part 242; and (2) choose to burn some type of forest-based woody biomass, or unadulterated wood and wood residues, as a compliance mechanism under Part 242.

The Policy will not prohibit the burning of any kind of biomass in New York State. In fact, even within the narrow category of facilities described above, the Policy does not prohibit the burning of any kind of biomass. In other words, even if the Department determines that a particular fuel source does not qualify as "sustainably harvested" pursuant to the Policy, a CO2 budget source may still burn that fuel as long as the source meets all other applicable regulatory requirements.

The Policy will only be relevant to the Department's determination regarding whether, pursuant to 6 NYCRR § 242-6.5(b), a CO2 budget source may deduct CO2 emissions attributable to the burning of biomass from its overall compliance obligation under Part 242. The proposed Policy informs the Department in its determination of whether a particular fuel source is "sustainably harvested," but only for purposes of determining whether it is "eligible biomass" under Part 242. As stated in the Policy, regardless of whether a particular biomass fuel source is considered "sustainably harvested" for any other State program or purpose, that biomass may or may not be considered "sustainably harvested" by the Department for purposes of Part 242 under the Policy.

Partially because of the very narrow context of this Policy, the Department does not anticipate that the Policy will have a substantial impact on the biomass industry in New York State. The fact that CO2 allowance prices in the Regional Greenhouse Gas Initiative (RGGI) market are currently at relatively low levels also means that any financial incentive to burn biomass under Part 242 is, at least at the present time, somewhat minimal. In other words, regardless of the details of the Policy, it is unlikely to have a significant negative impact on the biomass industry as a whole, or on the Upstate New York economy.

Likewise, the Department recognizes that the Policy itself will not necessarily serve to meaningfully promote the use of biomass for energy in New York State. This Policy and Part 242 are not the proper mechanisms by which to serve such a policy goal. Part 242 is a program intended to stabilize and reduce CO2 emissions from power plants; it is intended to be a fuel-neutral program.

Why doesn't the Policy just assume biomass combustion is "carbon neutral" or has zero net CO2 emissions?

The premise of biomass "carbon neutrality" and carbon accounting to understand the greenhouse gas (GHG) impacts is complicated and currently is the subject of intense scientific research. For example, in May of this year, a group of 90 scientists sent a letter to Congressional leaders urging them to consider "the importance of accurately accounting for carbon dioxide (CO2) emissions from bioenergy in any law or regulation designed to reduce greenhouse gas emissions from energy use."1 Moreover, EPA has solicited information on approaches to accounting for GHG emissions from bioenergy and other biogenic sources. See 75 FR 41173 (July 15, 2010).

Part 242 is a program intended to stabilize and reduce CO2 emissions from power plants. Especially given this context, at least for Part 242, the Department does not consider the implicit carbon sequestration of renewable plant growth assumed for biomass to be a sufficient claim of carbon neutrality. While some biomass production methods may produce low carbon intensity or possibly "carbon neutral" biomass, many do not, especially when taking into account the emissions associated with the growing, harvesting, processing, and combusting of the biomass. In some cases, such as in the generation of electricity alone, biomass may actually be more carbon intense than fossil fuels, resulting in greater GHG impacts, at least in the short term. The premise of biomass carbon neutrality, or low carbon intensity, cannot hold true over time without adequate future re-growth and attendant carbon sequestration to offset the CO2 emissions from biomass combustion. For further consideration, a recent study in the scientific literature emphasized the need for carbon uptake from additional plant growth or reduction of other biomass decomposition to properly account for and offset the GHG emissions associated with bioenergy.2

It is important to emphasize that this Policy does not constitute a full lifecycle or carbon accounting analysis of forest-based woody biomass as an alternative to fossil fuels. Nor does this Policy constitute a formal offset program in which sources are required to demonstrate additionality. However, this Policy is similar to afforestation offsets under Part 242, in that it considers sustainable forestry and a long-term commitment or conservation easement, in order to provide some degree of assurance that forest carbon stocks will not be lost through land conversion, and that an appropriate amount of the carbon emitted from the combustion of the biomass will be re-sequestered. The Policy sets forth the criteria by which the Department will make individual, case-by-case determinations regarding whether particular fuel sources are considered "sustainably harvested," and thus qualify as "eligible biomass" under Part 242. The Policy does not guarantee "carbon neutrality," or account for all GHG emissions associated with biomass production and land use change.

Why is this guidance more stringent than the New York State Renewable Portfolio Standard (RPS) Biomass Guidebook requirements for eligible biomass?

Under Part 242, regulated entities are generally required to obtain an amount of CO2 allowances sufficient to cover their total amount of CO2 emissions. The only exception, however, is for CO2 emissions attributable to the burning of "eligible biomass." In other words, regulated entities are not required to obtain allowances for each ton of CO2 emissions attributable to the combustion of "eligible biomass."

Part 242 does not allow for the prorating of CO2 emissions based upon how much less the CO2 emissions from the combustion of biomass are in relation to the CO2 emissions from the combustion of fossil fuels. Instead, Part 242 allows for all of the CO2 emissions resulting from the combustion of "eligible biomass" to be deducted from a regulated entity's overall compliance obligation. Because of this, and because "eligible biomass" is the only exception of this sort under Part 242, there is a need to provide some assurance that an appropriate amount of carbon from combustion is re-sequestered.

The "eligible biomass" definition in 6 NYCRR § 242-1.2(b)(43) requires that biomass be sustainably harvested and available on a renewable or recurring basis. Sustainable harvesting, as outlined in the Certification Criterion sub-section of the Policy, like the RPS, promotes sound forest management through forest certification and forest stewardship and harvest plans. This aspect of sustainable harvesting does not, however, provide adequate assurance that the harvested land will remain in a forested condition. Thus, an additional Carbon Re-sequestration Criterion is necessary to demonstrate that the carbon emissions released from the combustion of "eligible biomass" under Part 242 will be re-sequestered through forest re-growth.

The Renewable Portfolio Standard (RPS) Biomass Guidebook outlines the procedures required to ensure eligible biomass is managed to provide a sustainable feedstock. The RPS does not, however, address the need under Part 242 to provide some assurance that an appropriate amount of carbon is re-sequestered through forest re-growth. In other words, the RPS eligibility of wood biomass resources for energy production is conditioned upon promoting long-term forest health and sustainability of the biomass resource, but does not necessarily require carbon re-sequestration. Because the purpose of Part 242 is to stabilize and reduce CO2 emissions from power plants, there is an additional need to provide some assurance that the combustion of "eligible biomass" under Part 242 will result in lower carbon intensity as compared to the CO2 emissions that would result from the combustion of fossil fuels.

How were the certification options arrived at and why are they different from those in the Renewable Portfolio Standard Biomass Guidebook?

Similar to the RPS, the Policy recognizes non-governmental forest certification as a proxy for sustainable forest management. Unlike the RPS, the Policy does not specifically require the regulated entity or facility to have a facility procurement plan. The responsibility to avoid forest land conversion, and ensure an appropriate amount of forest re-growth and carbon re-sequestration, lies with the landowners and/or biomass suppliers. This is accomplished through entering into a conservation easement, or providing another demonstration to the Department regarding carbon re-sequestration. As described above, this additional criterion under the Policy, as compared to the RPS, is necessary in order to provide some assurance of an appropriate amount of carbon re-sequestration.

What is the basis for the requirement for "permanence?"

In response to public comments, the Department has clarified the second criterion in the Policy. In particular, the term "permanence" has been removed from the Policy, because it may have been misleading to the regulated community. The Department has replaced the "Permanence" criterion with the "Carbon Re-Sequestration" Criterion. Moreover, the Department has revised this criterion, in order to clarify alternative methods for demonstrating that there will be an appropriate amount of carbon re-sequestration.

As described above, "eligible biomass" combustion constitutes the only exception under Part 242, in that regulated entities are not required to obtain allowances for each ton of CO2 emissions attributable to the combustion of "eligible biomass." Thus, the Department interprets "sustainably harvested" to include a demonstration that an appropriate amount of CO2 emissions attributable to the combustion of the "eligible biomass" will be re-sequestered. The Policy provides flexibility to regulated entities that choose to burn "eligible biomass" as a compliance mechanism under Part 242 in the form of two options to make such a demonstration.

An entity may demonstrate carbon re-sequestration through a permanent conservation easement for a period of 100 years. This option would not require any additional submittals to the Department, and is based upon estimates of the time for a hardwood forest located in the Northeast to reestablish if a clear cut harvest was undertaken on that forest. An entity may also demonstrate carbon re-sequestration through a conservation easement in effect for a shorter period of time. In this situation, an entity should also demonstrate that the conservation easement would be in effect for a period of time necessary to allow for the re-sequestration of the carbon released through the combustion of the "eligible biomass" removed from the land that is under that conservation easement. To arrive at the appropriate time period for the conservation easement, a baseline carbon inventory may be calculated and modeled, or an actual third party carbon inventory measurement may be submitted, to demonstrate that the time period of the conservation easement would be sufficient to allow for the re-sequestration of the carbon released from the combustion of the "eligible biomass." As described in the Policy, an entity may also make the carbon re-sequestration demonstration using an alternative method.

Why aren't clearer guidelines and/or examples of acceptable demonstrations of carbon re-sequestration provided?

The Policy is intended to provide guidance to regulated entities under Part 242 regarding the Department's interpretation of the phrase "sustainably harvested." In all cases, the Department will make individual, case-by-case determinations, regarding whether particular sources of fuel qualify as "eligible biomass" under Part 242. These case-by-case determinations by the Department will be guided by the criteria set forth in the Policy.

To date, detailed guidelines for the management of carbon have not been included in forestry certification programs or biomass harvesting best management practices (BMPs). There is guidance on forest growth yield models and carbon inventory tools currently available from the U.S. Forest Service to help regulated entities with carbon re-sequestration demonstrations.3 In addition, Forest Guild publication "Forest Guild Retention and Harvesting Guideline for the Northeast" outlines essential elements to determine the carbon impact of a biomass harvest.4 The Department wants to provide some flexibility for a regulated entity to propose an approach to a carbon re-sequestration demonstration. Eligibility evaluations are most appropriately assessed on a case-by-case basis given site specific data of the forests from which the biomass is managed and harvested, the fossil fuel being replaced, and combustion technology. It is difficult to define guidance and appropriate time-frames for adequate carbon re-sequestration that would cover all scenarios.5 Based upon scientific literature and average estimates of carbon stock in the northeast, 100 years is a conservative estimate of an approximate period of adequate re-growth for a clear-cut northern hardwood forest.6 The Policy also provides an option to demonstrate that a period of less than 100 years is sufficient.

As stated in the Policy, the Department will be revisiting the Policy on a regular basis, in order to make any necessary revisions based on scientific developments, and include future guidance for other "eligible biomass" fuel sources.

Why isn't the guidance written to allow the use of low grade wood waste without the associated stringent certification and "permanence" requirements?

A conservative approach for forest-based woody biomass use, including low grade wood waste, is necessary. A comprehensive biofuels sustainability framework does not yet exist for New York. Development of ecologically sustainable practices for producing biofuel feedstock is a crucial first step.7 Once developed, these sustainable practices should provide New York with specific biomass retention and harvesting guidelines that balance ecological protection, on-site carbon storage, and renewable fuel use with modeling of carbon flows over time. As described above and in the Policy, the Department may revise guidelines as appropriate, based on updated technical or scientific information.

Why doesn't the accounting approach consider how carbon is cycled across an entire landscape and not just one stand that is harvested on a particular day?

As described above, this Policy is only relevant to "eligible biomass" determinations under Part 242. Part 242 is a cap-and-trade program that generally requires an allowance (equal to one ton of CO2 emissions) for each ton of CO2 emissions released by a regulated entity. For Part 242 to be successful and maintain integrity, each ton of CO2 emissions (whether an allowance, compliance mechanism, or offset) must be capable of being tracked back to a responsible party such as the landowners and/or biomass suppliers. If each ton of CO2 emissions cannot be accounted for, there is no integrity to the cap, and Part 242 is jeopardized. The revisions to the Carbon Re-sequestration criterion in the Policy make clear that accounting for re-sequestration may include parcels beyond the particular one that is harvested on a particular day. Regardless, the Carbon Re-sequestration demonstration should include a conservation easement that is held by a responsible party. As described above, this is to provide for some assurance that there will indeed be an appropriate amount of carbon re-sequestration.

__________

1 Letter to: U.S. House Speaker Nancy Pelosi, U.S. Majority Leader Harry Reid, and key Obama Administration officials, May 17, 2010. For the full list of the 90 scientists and the text of the joint letter, go to http://216.250.243.12/90scientistsletter.pdf.
2 Searchinger, T.D. Biofuels and the need for additional carbon. April-June 2010. Environ. Res. Lett. 5, http://iopscience.iop.org/1748-9326/5/2/024007/fulltext
3 United States Department of Agriculture Forest Service, "Tools for Carbon Inventory and Management, and Reporting," http://nrs.fs.fed.us/carbon/tools/
4 Forest Guild Biomass Working Group, "Forest Guild Retention and Harvesting Guideline for the Northeast," May 2010. 12. http://www.forestguild.org/publications/research/2010/FG_Biomass_Guidelines_NE.pdf
5 Schlamadinger B. and Marland G. 1999. Net effect of forest harvest on CO2 emissions to the atmosphere: a sensitivity analysis on the influence of time. Tellus 51B, 314-325.
6 Smith, J.E., Heath, L.S., Skog, K.E., and Birdsey, R.A. 2006. Methods for calculating forest ecosystem and harvested carbon with standard estimates for forest types of the United States. Gen. Tech. Rep. NE-343. Newtown Square, PA: U.S. Department of Agriculture, Forest Service, Northeastern Research Station
7 Renewable Fuels Roadmap and Sustainable Biomass Feedstock Supply for New York. April 2010. New York State Energy Research and Development Authority (NYSERDA) Report 10-05. http://www.nyserda.org/publications/renewablefuelsroadmap/default.asp


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