Activists in the southeastern U.S. see shifting politics in the United Kingdom as the best chance to curb demand for pellets.

Research for this article was made possible with the support of the Heinrich Boell Foundation’s Transatlantic Media Fellowships.

On a bright September afternoon in Raleigh, North Carolina, when the wide lawn behind the legislative building swelled with protesters calling for action on the climate crisis, forest advocates were there in force.

“Like the Lorax, we speak for the trees,” Rachel Weber, a campaigner for the Asheville-based advocacy group Dogwood Alliance, told the crowd, among millions worldwide who’d left their jobs and classrooms that Friday.

“I’m striking for the climate today,” she said, “because logging and forest destruction in our state is a climate emergency.”

A week later, Weber and a dozen fellow activists drove home the “emergency” point at a climate change panel meeting led by state Gov. Roy Cooper, first with siren sounds, then with song, until they were escorted from the room.

North Carolina has emerged as the epicenter of the region’s fight over wood pellets, a popular substitute for coal in European power plants that critics say is making climate catastrophe worse, not better.

Pressure from activists has garnered rhetorical gestures from Cooper against the international biomass trade, but state officials have continued to grant requests from Enviva, the world’s largest pellet maker, to expand production. North Carolina is now on track to surpass Georgia as the country’s largest exporter of the controversial fuel.

Across the pond, however, the politics are starting to shift. The world’s largest pellet customer, the United Kingdom, plans to phase out the generous subsidies that caused the industry to balloon in the first place. The changes have inspired pellet foes to press for more urgent reforms — and the industry to look for new technology and new markets. The outcomes could determine the future of the industry in the southeastern United States and across the globe.

An Enviva mill in Virginia manufactures wood pellets to export to Europe. (photo by Ted Blanco / Climate Central)

‘There’s good biomass and bad biomass’

Four thousand miles across the Atlantic, a rail line from a North Sea port to Selby, England, transports pellets along the final leg of their global journey to the largest bioenergy station in the world. Here, British power company Drax will burn them to create enough electricity to power more homes than in all of London.

Four bioenergy boilers, originally built to burn fuel from the nearby Selby coalfield, are the centerpiece of Drax’s plans to transition to a “zero-carbon future.” The units, represented in green, are celebrated in posters throughout the complex.

Yet per megawatt-hour of electricity generated last year, these boilers caused more carbon dioxide pollution from the power station than coal: over 13 million metric tons, about the same produced by the U.S. state of Delaware.

The British government all but ignores this figure, and Drax isn’t bothered by it. Trees will be replanted, the company says, reabsorbing carbon dioxide as they grow. The pellets come from trees or parts of trees that would have otherwise rotted on the forest floor, emitting carbon; that wood does more good displacing fossil fuels.

“We use sustainably sourced biomass from working forests, which supply other industries with high grade wood so we can take what’s left,” said Drax spokesperson Matt Willey, during a tour of the facility. Converting the plant to run on biomass instead of coal wouldn’t make sense otherwise, he said. “There’s good biomass and bad biomass.”

This argument is employed by the industry on both sides of the Atlantic and is echoed in many halls of government. And while the science around forest carbon accounting remains the subject of debate, there’s little doubt: Trees do remove carbon from the atmosphere, and some types of wood — such as sawmill waste or underbrush susceptible to burning up in a forest fire — could serve the climate well if they were used to produce electricity.

But the “good biomass” defense belies the core reason British policy marks bioenergy carbon pollution down as zero — a decision that has spurred a global pellet trade from North Carolina to North Yorkshire. In fact, the “carbon neutral” label stems from a simple case of incomplete accounting.

‘We’re not paying Uncle Sam’

As countries around the world began to come together to tackle the problem of climate change in 1990, the United Nations developed a framework for tracking carbon and other planet-warming pollutants in the atmosphere. The accounting system is achingly complex, but when it comes to bioenergy, there are two sides of the ledger: the energy sector, where carbon dioxide is mostly emitted, and the land use sector, where carbon is mostly stored by trees and other plant life.

A scientists’ panel advising the United Nations on the framework made two crucial decisions that sparked the global pellet trade that followed. It chose to track carbon dioxide emissions from bioenergy in the land use sector, not the energy sector. And it chose to track those emissions by fluctuations in forest cover, not by molecules measured at the biomass smokestack.

This tracking system is imperfect, many scientists say. But its flaws are irrelevant compared to the mistake that came next: creating a regulatory system that focused on only one side of the climate ledger.

That’s exactly what the European Union did to comply with the Kyoto Protocol, the world’s first international climate treaty. In 2009, it set a goal of 20% renewable energy by 2020 and deemed biomass as emissions-free as solar or wind. To meet the energy-focused Kyoto targets, coal-dependent member nations like Britain began offering financial incentives to coal plants to convert to bioenergy.

Those inducements spurred a massive pellet trade with southeastern U.S. forests as its foundation. Last year Drax imported about 4.5 million tons of its pellets from the United States, the majority of the 7.5 million it burned. A second coal-to-biomass plant near the Scottish border, Lynemouth, only runs on American imports of 1.5 million tons of pellets each year, most from Enviva’s mills in the southeastern United States. A third plant called MGT Teesside is under construction; starting next year it will burn another 1 million tons of American pellets every year and nothing else.

Using annual filings and government data, the British nonprofit Biofuelwatch estimates the British government spends about £1.3 billion each year to allow these plants to operate, or about $1.7 billion.

“Bioenergy only exists at the scale it is because we’re subsidizing it,” said Duncan Brack, a senior research fellow at the London-based think tank Chatham House.

The problems with this scheme aren’t hard to spot. Manufacturing wood pellets and shipping them across the Atlantic creates carbon pollution. The additional pollution created by burning pellets is supposed to be tracked in the land use sector, but that sector is only loosely regulated in the Kyoto Protocol, and the United States isn’t a party to it. And while the Paris Agreement, Kyoto’s replacement, has tighter land-use requirements, the United States is poised to withdraw from that climate treaty, too.

“We’re not paying Uncle Sam, Donald Trump, the Americans, for the privilege of nicking your sequestration capacity,” said James Hewitt, who volunteers with Biofuelwatch and has partnered with Brack on Chatham House research.“We’re also not paying anything to shove our CO2 into the air — and the air is full of the bloody stuff.”

Eight of Drax’s iconic cooling towers are paired with boilers that burn biomass instead of coal. (photo by Elizabeth Ouzts / Energy News Network)

The worsening economic case for bioenergy

While smokestack pollution from bioenergy is a fraction of Britain’s overall greenhouse gas releases, analysts say every bit counts in the race against dangerous global warming. Drax and Enviva also face increasing pressure from U.S. activists who have questioned their claims of sustainability, in some cases documenting whole forests being clear-cut to supply pellet mills.

Yet none of these factors fully account for the British government’s decision to curtail future incentives for bioenergy, observers say. Instead, the shift is probably best explained by economics: While bioenergy costs stay the same or increase, true renewable power prices are tumbling.

Britain’s “contracts for difference” program illustrates these dynamics. Through the scheme, the government fills in the gap between the actual cost, or strike price, of a qualified renewable energy source and the average market price of electricity. The contracts are crucial for the country’s three bioenergy plants: While the market electricity price is about £45 ($58) per megawatt-hour, the current strike prices for Lynemouth, MGT Teesside, and one bioenergy unit at Drax are all above £100 ($128).

These economics aren’t likely to improve. “Coal-to-biomass conversions are a mature technology,” said Sasha Stashwick, a senior advocate at the Natural Resources Defense Council based in New York. “It’s not like they have a big runway for significant cost reductions.”

By contrast, prices for energy sources with relatively high upfront costs but no fuel charges are plummeting. At the most recent auction for contracts for difference last month, offshore wind came in at its lowest strike price yet, 30% lower than two years prior and roughly the same as the market price — in other words, subsidy-free. In light of the alternative, Brack said, “it doesn’t make sense to pay for more biomass.”

“More” is the operative word. A new standard for contracts for difference will prohibit new subsidies for large bioenergy plants, but existing contracts will remain intact. Drax and Lynemouth will burn imported pellets through 2027, and MGT Teesside will burn them through 2034.

“They rolled out a policy that is forward-looking,” Stashwick said, “and quite conspicuously leaves out all of the bioenergy currently being produced in the country.”

North Carolina climate activists demonstrate in Raleigh in September. (photo by Elizabeth Ouzts / Energy News Network)

‘A fantastic victory’

Still, Stashwick and other campaigners view the new standard as a critical step forward. For one, it has prevented at least one 299-megawatt plant in Wales from qualifying for subsidies. The facility hasn’t found other financing and hasn’t been built, said Almuth Ernsting, Biofuelwatch’s founder and co-director. “I’m pretty confident it never will be,” she said over email.

The standard also provides a template for penalizing bioenergy without subverting the previous government conclusion that the resource is “carbon neutral” — an important consideration, many observers said.

“Governments, particularly British governments — they hate changing their minds,” said Kelvin Hopkins, a veteran Independent lawmaker from Luton, about an hour north of London. “It looks like they’re losing face. They hate losing face.”

As ever, smokestack emissions are deemed “zero” under the new standard, but significantly fewer emissions from pellet manufacturing and shipping are allowed. Last year, Drax reported these life-cycle emissions as 130 kilograms per megawatt-hour, compared to a limit of 285. The standard for fuel contracts starting in October 2020 is 29 kilograms — currently an unachievable bar for imported pellets. Plus, plants must be more efficient by reusing their waste heat.

“‘Scrap subsidies’ has been our campaign slogan,” said Pete Deane, another Biofuelwatch volunteer. The change, he beamed, “was a fantastic victory from our point of view.”

Now, Deane and his colleagues are pushing for the same standard to apply to existing subsidies. Current contracts for difference can’t be renegotiated under British law — leaving Lynemouth and MGT Teesside locked in to burn 2.5 million tons of American pellets each year. But campaigners are honing on a different program, the Renewables Obligation, which allows Drax to sell renewable energy credits from three of its four bioenergy boilers.

If the government adjusted the sustainability criteria for these credits to match those under the contracts for difference, Drax’s bioenergy would no longer be deemed renewable — and almost certainly wouldn’t pencil out. Some £981 million (about $1.2 billion) in subsidies each year, advocates say, could instead be devoted to sources like wind, solar, and batteries.

Roger Godsiff, a longtime Labour Party lawmaker from Birmingham, is the lead author of a resolution supporting such a change, which wouldn’t require an act of Parliament. But he and many others struggle to imagine significant new policy until the political crisis swirling over Brexit is resolved. “British politics is on hold,” he said in an interview at his Westminster office. “There is a total stalemate on Brexit.”

If conservatives keep control, some campaigners see an opportunity. “If we attack now — and explain that spending a billion dollars a year for burning wood is not climate friendly,” said Richard Wainwright, the Birmingham-based communications manager for the nonprofit Fern, “that could work in our newly, sadly, right-wing country.”

A carbon capture project at Drax absorbs one ton of carbon dioxide each day. (photo by Elizabeth Ouzts / Energy News Network)

The future of bioenergy

To be sure, Benedict McAleenan, the head of the trade group Biomass UK, is no fan of the tighter standard on life-cycle emissions. That’s in part, he says, because it doesn’t give bioenergy credit for being a 24-7 source of power.

“The really important thing to remember,” he said during an interview at the offices of the Renewable Energy Association, “is it isn’t simply another renewable. It’s a dispatchable renewable.”

But McAleenan didn’t reveal any plans to try to fight the standard, nor did any others in the industry contacted for this article. Instead, they have their sights set on a new technology. “There’s still the opportunity for bioenergy with carbon capture and storage,” he said.

Best known among insiders by the acronym BECCS, bioenergy with carbon capture and storage is billed as carbon negative — unlike carbon capture for coal or natural gas, generally thought to be carbon neutral. Smokestack emissions are still marked down as zero, and more carbon is captured than is emitted in the making and transporting of pellets.

Drax is currently experimenting with its own BECCS unit, which now captures just one ton of carbon dioxide a day — the first of its kind on the continent and one of a few such projects in the world. The company hopes the unit can be perfected and scaled up to capture enough carbon for its bioenergy to meet the new contracts for difference standard.

Enviva also views BECCS as integral to its future. In an email, the company pointed to an August report from the United Nations that included the technology in many scenarios for keeping temperature increases below 1.5 degrees Celsius. Matched with carbon capture, spokesperson Maria Moreno said, “biomass could deliver negative emissions by helping to remove carbon dioxide and helping reverse climate change.”

But many who are skeptical of bioenergy are equally skeptical of BECCS. It still ignores the carbon dioxide released from the smokestack, the source of the vast bulk of bioenergy’s pollution. Experts also caution that vast tracts of land would be needed to produce fuel for BECCS at a large scale — crowding out land needed for food production.

“It’s not leading to negative emissions at all,” said Linde Zuidema, a Fern campaigner based in Brussels. “It’s leading to increasing land use, but it’s also bad for nature and bad for people.”

‘Five, 10 years to really turn things around’

No matter what happens with British policy, Enviva is looking beyond the nation that started it all. Last year, the company sent nearly all of its 3 million tons of pellets to Lynemouth and Drax. By 2025, it’s contracted to double production and deliver more than half of its output to Japan, according to recent filings with the U.S. Securities and Exchange Commission. In addition to those customers already identified, the company said in an emailed statement, “Enviva will seek to support the transition away from fossil fuels to renewable clean energy in other countries such as Japan, South Korea, Taiwan, Denmark, Germany, and Poland, to name a few.”

Such plans have alarmed researchers like Jo Alexander, whose group ShareAction is encouraging banks to divest from energy companies that burn imported pellets. In the campaigning community, she said, “there is currently a European focus, but we need to anticipate more and shift our focus to the Far East as well.”

Curbing the industry through policy outside Britain looks difficult. Few believe the underlying United Nations accounting framework — in which bioenergy emissions are counted in the land use sector — is likely to change anytime soon. A lawsuit filed against the European Union’s latest renewable energy directive — which still counts biomass as carbon neutral — is generally considered a long shot, and the next renewable energy policy isn’t scheduled to take effect until 2030.

“By that time, if we haven’t improved the situation,” said Alex Mason, senior policy officer for the World Wildlife Fund in Brussels, “we could have totally screwed the climate, and biomass could have played a big part in that.”

That’s why back in the United States, many wood pellet foes still see changing British subsidies as their best opportunity in the short term to drive down international demand.

“We’re focused on the U.K. because they’re still receiving approximately 80% of southeastern U.S. pellets,” said Heather Hillaker, an associate attorney with the Southern Environmental Law Center, based in Chapel Hill. If advocates can succeed in Britain, she said, “the hope is that that will have an effect on other countries that have been looking to the U.K. as a leader on climate change.”

Despite setbacks in North Carolina, many still view the state as their best bet within the region of curbing the production of pellets on the supply side. The Cooper administration gave advocates fresh hope with a clean energy plan that cast doubt on the biomass industry.

“It has to be a both/and,” said Rita Frost, campaigns director with the Dogwood Alliance. “We have to match the campaigning in the places where we have the political opportunities.”

And as growing numbers of scientific reports detailing the urgency around climate action make clear, the clock is ticking.

“We’ve got about five, 10 years to really turn things around,” Mason said. “That’s what counts.”

