What is biomass? The latest fuel source to get clean tech tax credits – National | Globalnews.ca

Ottawa plans to expand its clean technology and electricity tax credits to include heat and electricity produced by burning biomass, as outlined in its fall economic statement.

Biomass is a very broad term, but in this context, it primarily refers to pellets that are created by pressurizing leftover wood or agricultural materials from wood or crop processing.

Ajay Dalai, Canadian research chair in bioenergy at the University of Saskatchewan, said Canada is “on a gold mine in terms of availability of biomass products.”

“The amount of bioenergy we produce domestically, as I looked at the data, is about seven terawatt hours compared to a thousand terawatt hours worldwide coming from biomass, a very small fraction coming from Canadian biomass.”

In 2018, Canada generated more than 647 million terawatt hours of electricity. One terawatt is equivalent to one trillion watts. For a basic watt-hour calculation, a 100-watt light bulb consumes 100 watts of power at any given time, so using it for one hour is equivalent to 100 watt-hours of energy used.

The fall economic statement proposes expanding eligibility for the 30 percent Clean Technology investment tax credit to include “systems that produce electricity, heat, or both electricity and heat from waste biomass.”

It also proposes making available the 15 percent Clean Electricity Investment tax credit for systems “that produce electricity or electricity and heat from waste biomass, which would be available from the 2024 Budget date for projects that did not begin be built before March 28. , 2023.”

The government estimates the tax credit would cost $853 million between fiscal years 2023-24 and 2028-29, and an additional $1.2 billion from fiscal years 2029-30 to 2034-35.

This is good news for the Forest Products Association of Canada, whose vice-president Eric Johnson describes the previous lack of a biomass tax credit as “a mistake.”

“Biomass is a net zero energy source and its use certainly gives manufacturers the opportunity to produce cleaner heat and power and then also communities to move away from fossil fuels such as diesel, particularly in the north and around our factories. and be powered by a cleaner source of electricity,” Johnson said.

In the forestry sector, Johnson says much of the biomass used in its processes involves wood such as sawdust, bark, branches and other tree parts that would otherwise be left to decompose in the wood processing process.

Many sawmills have their own power generation, which Johnson said has shifted to cogeneration with biomass and coal or natural gas. He says this planned tax credit would help many generators transition to pure biomass.

“What is necessary to do this at that full biomass scale is to renew the technologies that exist in the plants to be able to produce, making them more efficient, so that they do not have to be cogenerated with other sources. of power,” he stated.

However, some environmental groups argue that biomass is not as green as it seems, including Stand Earth.

Richard Robertson, a forestry activist with the organization, says they recently started a campaign asking Ottawa to stop subsidizing biomass, focusing on wood pellet exports to the United Kingdom and Japan.

“Millions of tons are going overseas and devouring old-growth forests,” Robertson said. “They are not only accepting waste, but also many subsidies from the United Kingdom”

Being trending now

The wood pellet industry has been under scrutiny for years. Research published by the Canadian Center for Policy Alternatives (CCPA) in 2021 found that 12 per cent of the material recorded in British Columbia is eventually broken down to produce biofuel.

Then a BBC investigation last October reported that Drax Group, a UK-based renewable energy company, sources some of its biomass from whole trees in British Columbia’s old-growth forests, not just sawdust and wood waste. , as the company claims.

Drax operates the world’s largest wood-fired thermoelectric plant in Yorkshire, UK, and has a growing monopoly in Canada’s wood pellet industry. Several groups, including Unifor, want Canada’s Competition Bureau to investigate Drax’s dominant position in British Columbia, which they say could have negative consequences for both forest ecosystems and forestry industry employment in the province.

Seven months after the BBC investigation broke, the UK’s energy regulator launched a formal investigation into Drax to determine whether the company is breaching sustainability standards.

In response to the BBC, Drax maintains that they only use sawdust and other wood waste that the logging industry does not want.

Natural Resources Canada says forest biomass is a “renewable source of feedstock for energy production” as long as it comes from a sustainably managed forest and regrows over time.

Still, Roberston says there are concerns.

“This really is not clean technology. And I think that’s really what I want to emphasize here. It is also not carbon neutral,” he stated.

The autumn economic statement describes biomass as a carbon-neutral energy solution and says it could be carbon negative when combined with carbon capture and storage.

Dalai argues that biomass is carbon neutral, since plants use carbon dioxide as part of photosynthesis.

“So this CO2 from the environment goes through the biomass to grow, and when you burn it, we produce that carbon dioxide. go back to [the] atmosphere. “We are basically recycling carbon dioxide through this process,” he explained.

However, he acknowledged that it is not a completely individualized process, since energy is needed to condense organic material into biopellets.

The 30 percent clean technology tax credit became available Tuesday and the 15 percent clean electricity tax credit expansion will be available when Budget 2024 is released.

Complementary legislation is expected to be introduced in the fall of 2024.

– with files from The Canadian Press.