Federal Trade Commission Bioenergy Report

“Green” claims appear to violate consumer protection standards

Pelham, MA, July 29, 2014 – Biomass power companies appear to routinely violate consumer protection standards and make misleading claims in advertising and promotional materials that their wood-burning power plants are “clean” and “carbon neutral,” according to a report submitted to the Federal Trade Commission by the Massachusetts based Partnership for Policy Integrity.

The report, Climate of Deception: Why Electricity Consumers Who Care About Global Warming and Air Pollution Need FTC Protection From Biomass Industry Greenwashing,” was accompanied by a letter to the FTC asking the Commission to investigate the biomass power industry.  The complaint is based on an examination of marketing claims by 17 biomass energy companies that biomass power is “clean” and “carbon neutral,” comparing such claims to standards set in the FTC “Green Guides,” the Commission’s guidance on how companies must substantiate advertising claims of environmental benefit.

The PFPI report identifies multiple instances of biomass companies portraying their facilities as having negligible or even no emissions, although biomass power plants emit as much or more air pollution and greenhouse gases as coal and gas plants.  According to the Environmental Protection Agency and other authoritative sources, net lifecycle carbon dioxide emissions of biomass power plants can exceed those from fossil fuels, and converting coal plants to biomass can decrease power output while increasing carbon dioxide emissions.  Electricity consumers persuaded by biopower company marketing claims may voluntarily pay extra for “green” power sourced from biomass plants, even though such power has clear environmental impacts.

“Advertising of biomass as producing little or no pollution could mislead consumers into thinking that when they join a green power program selling biomass power, they’re helping to reduce emissions and address the threat of climate change,” said Kelly Bitov, PFPI’s attorney and the lead author on the report. “While the FTC is clear that electric power companies must back up such environmental claims, we found that many biomass power companies appear to violate consumer protection standards.”

The report examines claims made by 17 companies about existing or proposed wood-burning power plants in the United States, finding that all companies made at least one unsubstantiated claim about low emissions or environmental benefits:

  • American Renewables (FL)
  • Beaver Wood Energy LLC (VT)
  • Covanta Energy Corporation (CA, ME)
  • Dominion Resources Inc. (VA)
  • ecoPower Generation LLC (KY)
  • Enova Energy Group (CT)
  • Georgia Biomass LLC (GA)
  • Greenleaf Power LLC (CA)
  • Laidlaw Energy Group, Inc. (NH, NY)
  • MacPherson Energy Corporation (CA)
  • Novo Power LLC (AZ)
  • NRG Energy, Inc. (CT)
  • ReEnergy Holdings LLC (CT, ME, NC, NY)
  • Rollcast Energy (GA, MI, SC)
  • Sierra Pacific Industries (CA, WA)
  • Southern Company and Subsidiaries (GA, TX)
  • United Corrstack/Evergreen Community Power LLC (PA)

Claims that biomass power is carbon neutral are usually based on the idea that greenhouse gas emissions from burning wood are offset, but the PFPI report found that companies are almost never able to verify such claims.  Current science recognizes that net carbon dioxide emissions from wood-fueled power plants can exceed emissions from fossil-fueled plants for decades.

“Building truly green and emissions-free energy is vital if we’re serious about addressing climate change,” said Mary Booth, Director of PFPI. “From some of the marketing done by biomass energy companies, you’d think the electricity they produce is as clean as wind power, but in reality, burning wood for energy is notoriously polluting and a significant source of greenhouse gas emissions.  Consumers need that information to make the best energy purchasing decisions, and the FTC needs to hold these companies to the truth-in-advertising rules they have established for companies that sell us power.”

The report is available here.

Partnership for Policy Integrity