Maine legislators urged to reject subsidies for polluting biomass energy

Industry has received over $250 million in recent years, but still can’t compete

Pelham, MA.  A review of subsidies, tax credits and grants to the Maine biomass industry reveals that ratepayers and taxpayers have shelled out over a quarter billion dollars in the last ten years – and the industry is still tanking.

The report, “Maine Biomass at the Crossroads” was prepared by the nonprofit Partnership for Policy Integrity (PFPI) and is available here.

The report documents that in addition to the recent $13.4 million bailout which preserved jobs at four wood-burning power plants at a yearly cost of $77,000 each.

  • Ratepayer-funded Renewable Energy Credits (RECS) to aging biomass power plants in Maine totaled more than $68 million since 2008.  Subsides from other states may have been as high as $60 million per year.
  • $25 million in federal subsidies for biomass deliveries went to 150 logging companies operating in Maine, with just 15 recipients (10 percent) receiving over half the payments. Some of the biggest recipients were companies based in other states.
  • Other federal and state grants totaling tens of millions of dollars were made to bioenergy ventures that almost immediately folded.

A 2016 state-appointed commission to study the “benefits’ of the biomass industry recommended increasing subsidies for biomass by extending Maine’s renewable energy mandate, which the Maine Legislature is considering now. The commission was dominated by forestry and biomass industry insiders, including some who had received subsidies under the federal fuel delivery program.

However, the PFPI report concludes that Maine could be footing the bill for much larger subsidies than previously, because Massachusetts ended subsidies to Maine biomass plants as too greenhouse-gas intensive, and Connecticut is reducing subsidies to old, polluting Maine plants to make room for zero emissions wind and solar.

“Maine should be investing in the emerging and booming clean energy economy instead of irresponsibly giving away taxpayer and ratepayer dollars to prop up the failing and polluting biomass industry,” said Glen Brand, Sierra Club Maine Chapter Director.  “This report also reveals the hypocrisy of Governor LePage and others who support direct biomass subsidies while denouncing net-positive investments in solar, wind and efficiency.”

The report notes that the costs of the biomass industry also include air pollution.  Maine’s biomass facilities, including some receiving renewable energy subsidies worth millions of dollars a year, emit smog-forming chemicals, particulate matter, and greenhouse gases. Meanwhile, asthma in Maine exceeds the national average, incurring costs over $173 million each year.

Mary Booth, director of PFPI and author of the report, said, “People pay extra on their electricity bill to support clean energy, but with biomass they’re actually paying to pollute.  The Maine biomass industry is a bottomless pit not just for subsidies, but will gobble up public goodwill about renewable energy, too.”

The report concludes that Maine biomass electricity is unlikely to be competitive in the foreseeable future because it costs plants more to produce power than they can sell it for on the wholesale market.  Alternative schemes to harvest “energy wood” from Maine’s forests, such as exporting chips to Europe or making biofuels, also rely on subsidies underpinned by assumed greenhouse gas benefits. However, scientists challenge the idea that burning forest wood benefits the climate.

“Maine policymakers now have a chance to recognize what other states know – that biomass isn’t providing the clean and ‘carbon neutral’ energy for which renewable energy subsidies are supposed to pay,” said Mary Booth. “It’s time to move beyond consulting biomass industry insiders and find other ways to value Maine’s woods, including as way to soak up more carbon dioxide, which is vital to avoid the most damaging effects of global warming.”

Partnership for Policy Integrity