Waste Wood, Wasted Opportunity: The Value of Carbon in British Columbia

Transcription

1 Waste Wood, Wasted Opportunity: The Value of Carbon in British Columbia A Report by the Forest Fibre Alliance of British Columbia Prepared for FRST 523, Winter Term 1,

2 Project Report: UBC FRST 523, Forest and Environmental Policy Authors: Judah Melton and Magnus Gunn Date: November, 2014 Word Count: 1884 Executive Summary The Forest Fibre Alliance of British Columbia (FFABC) was formed to provide a voice for the users of non-sawlog fibre. The three founding companies are Pacific BioEnergy based in Prince George, Ainsworth Engineered based in Vancouver, and Pinnacle Pellet Inc. based in Williams Lake [1]. The goal of FFABC is to help our members grow through: 1) promoting the use of non-sawlog fiber for bioenergy and other applications, 2) encouraging market and science based research into bioenergy, and 3) encouraging fair and open energy trade. The development of a forest bioenergy industry offers considerable environmental, economic and social benefits to all British Columbians. Sustainable forest bioenergy uses the wood that others don t want and turns it into essentially carbon neutral power. This displaces fossil fuels from BC s energy mix and directly reduces provincial emissions of GHG. Our industry creates new jobs and investment across the province and provides green energy solutions for many of BC s off-grid communities. Our vision is to see BC to become a world leader in carbon neutral bioenergy technology from forest biomass and increase the use of engineered wood products. The regulation of carbon as a formal forest value is central to creating more sustainable use of our forests. We strongly support an inquiry into including carbon as a regulated forest value under FRPA and want BC to live the environmental values it is famous for. 2

3 Background and purpose In the past quarter century global temperatures have risen [2] and atmospheric carbon levels have risen [2]. One paper, from 2007, estimates that nearly 4.7 percent of BC s roughly 67 million tonnes of GHG emissions come from forest-related land-use changes [3]. The changes brought about by increased GHG emissions are accelerating and becoming ever more destructive on BC s forest ecosystems, BC s forest economy, and BC s communities. These changes on forested lands in BC will take the form of both biotic and abiotic effects. For example, estimates indicate that the length of the fire season in British Columbia will increase by one to two weeks in the next thirty years. But not only will the length of the fire season increase, it is likely that the size and severity of wildland fires will increase as well [2]. Beyond fire, floods, surges of water during spring thaw, high intensity precipitation events, and flows of debris are also likely to increase [2]. BC s forests have been converted from a carbon sink to a carbon source [4] due to climate change induced epidemics such as the mountain pine beetle [2] and management practises and regulations that have been largely ignorant of role of forests in carbon sequestration. The problem is getting worse due to a lack of regulatory and policy recognition of carbon as a key forest value. As carbon is not yet viewed as a regulated value to manage for in BC s forests there is no motivation for forest managers to change practises. For example, according to BioCap Canada nearly of 50% of wood harvested is left on site and about 55% of this waste could be used to generate potentially carbon neutral bioenergy, directly reducing consumption of GHG producing fossil fuels [5]. 3

4 Policy options i. Status quo Do not regulate carbon as a forest value Do not legislate targets for use of bioenergy Do not actively support economics behind using waste wood Continue to export BC wood pellets 20,000km around the world Continue to omit carbon as a forest value to be managed for under FRPA. The current downward spiral will accelerate. Expect more frequent and devastating disease and pest outbreaks and associated disruption to BC s forest economy, forest dependent communities and downside to provincial tax revenue. FFABC believes it is a missed opportunity for the province to improve forest utilisation through using waste wood in the form of sawmill residue, logging debris and MPB damaged wood to generate potentially carbon neutral bioenergy in BC. This could displace GHG producing fossil fuels use in BC and thereby reduce BC s overall emissions of GHG. It is also a missed opportunity to leverage off BC natural energy advantage and develop a leading bioenergy industry with associated new jobs, investment and technology. Keeping with the status-quo will equate to a failure to deliver on the 2020 target to reduce GHG by 33% as set out in the Greenhouse Gas Reduction Targets Act. ii. Alternative 1 Inclusion of carbon as a value under FRPA, and FULL legislated effort to grow bioenergy industry Make carbon a forest value under FRPA Extend the carbon tax to forest emissions Legislate targets for bioenergy consumption in BC Provide incentives to help economics of start-up bioenergy Restructure AAC to underpin more bioenergy investment Make carbon a forest value under FRPA - Tenure holders would be required to manage for carbon sequestration consistent with Government objectives. Extend the carbon tax to include emissions from forest management activities - This would give the forest licensees a direct financial incentive to reduce emissions. 4

5 Legislate bioenergy targets that escalate over time - Ambitious goals set in the 2008 BC Bioenergy Strategy called for 50% or more of the provinces renewable fuel requirement to come from biofuels by Without specifically mandating usage targets these goals are not going to be achieved. In 2011 wood-based bioenergy supplied approximately 10% of BC energy demands in 2011 [6]. Many European countries have begun to successfully transition to more bio-focused sources of energy. Finland and Sweden, for example, get 18 and 22 percent of their energy from bio-energy sources, respectively. In British Columbia, a province that is about 60% forest land, these levels would be easy to attain. 20 percent of the province s energy needs should come from bio-energy sources. There is already much of the needed infrastructure in place. According to the Ministry of Energy and Mines, over 800 megawatts of biomass electricity capacity is installed [7]. If BC can already provide electricity from bio-fuels to 640,000 people [7], nearly 14 percent of the province s population, then it is entirely possible to build on that current infrastructure and provide it to 20 percent of the province, businesses included. In order to ensure the need is there, it will be necessary for the BC government to mandate BC Hydro to enter into long-term off-take agreements with the bioenergy sector. Provide incentives to grow the bioenergy industry - Follow the successful template used in Europe whereby policy tools such as tax breaks, minimum price and guaranteed offtake agreements helped propel the domestic industry to a become world leader in bioenergy technology and overcome challenging start-up economics. Changes to AAC to underpin long term investment - Extend the recent changes in the forest tenure to provide more secure long term supply of fibre to bioenergy companies. The recent creation of two new forest tenures, the Fibre Forestry License to Cut (FFLTC) and the Fibre Supply License to Cut (FSLTC) [8] are a welcomed development. However these are issued on active cutting areas to enhance the utilisation of waste. To underpin meaningful investments and deliver on the environmental and economic benefits, a more fundamental restructuring of the AAC is necessary. One possible solution is splitting tenure licenses upon renewal into two categories: saw-log and non sawlog, for the same area of land and for the same duration. The idea is that holders of a sawlog license cannot hold the companion (non-sawlog) license. In addition to utilising waste wood from cutting, this would allow bioenergy companies to harvest wood that is never going to be commercialised by the saw log companies. Only this form of tenure reform can bolster meaningful investment in bioenergy that can help BC meet its ambitious GHG reduction targets. 5

6 iii. Alternative 2 Regulation of forest fibre and PARTIAL legislated effort to grow bioenergy industry (As per Alternative 1 but without tenure reform) Make carbon a forest value under FRPA Extend the carbon tax to forest emissions Legislate targets for bioenergy consumption in BC Provide incentives to help economics of start-up bioenergy As stated in the previous alternative, this option would utilise some of the efforts to help promote the use and security of supply of wasted biomass and other underutilised material, but without the changes to forest tenure. This alternative could be used as an interim arrangement while the details of a split-tenure are agreed upon. This alternative would necessitate the use of the FFLTC and FSLTC upon renewal, exchange, transfer, or newly issued tenures in order to ensure security of supply for forest fibre companies and infrastructure. Evaluation Criteria As the development of the forest bioenergy industry offers considerable environmental, economic and social benefits to all British Columbians, FFABC considers 1) new jobs gained, 2) increased utilisation of bush wood waste, 3) reductions in BC s overall GHG emissions and 4) the ease and costs of implementation as the most relevant criteria when evaluating policies linked to including carbon as a forest value. 6

7 Summary FFABC has investigated these three policy alternatives, and suggests the following decision matrix to guide policy makers. Continuing to not regulate carbon as a forest value is both a shocking missed opportunity for BC and is ignorant of the existing environmental threats facing both the province and the entire world. Making carbon a regulated value and FULL legislated effort to grow the bioenergy industry can deliver considerable benefits to BC as mentioned above and shown below. Benefits /Alternatives New jobs for BC Improved utilisation of waste wood Reduction emissions of GHG in BC Ease of Implementation Status Quo POOR: losing jobs, weakening forest communities POOR: >50% of waste wood left on ground POOR: Missed opportunity to reduce GHG No change Alternative 1: regulate carbon, and FULL legislated effort to grow bioenergy industry EXCELLENT: potential to develop a strong provincial industry and establish BC as a leader in bioenergy technology EXCELLENT: optimal utilisation of all unwanted wood EXCELLENT: help maximise reduction in BC s GHG GOOD: subsidies necessary to grow industry and mindset change to overcome with tenure change Alternative 2: regulate carbon and PARTIAL effort to grow bioenergy industry GOOD: potential to develop a medium sized provincial industry GOOD: improved utilisation of unwanted wood GOOD: help reduce BC s GHG emissions GOOD: subsidies necessary to grow industry 7

8 Recommendations As a voice for the users of non-saw log fiber and a committed supporter of a greener future, the FFABC fully supports all efforts to regulate carbon as a forest value and all measures that restructure the economy away from dependency on fossil fuels and towards renewable energy. It is because of these reasons that we fully endorse alternative 1, inclusion of carbon as a value under FRPA and full effort to grow bioenergy to be implemented in British Columbia. While developing an OIC, FFABC proposes that the following recommendations be considered: Make carbon a forest value under FRPA Extend the carbon tax to forest emissions Legislate targets for bioenergy consumption in BC Provide incentives to help economics of start-up bioenergy Re-structure tenure licenses to encourage bioenergy investment Any delay on implementing these recommendations will prove costly for BC on both an economic and ecological level. BC can become a world leader in self-sufficient, environmentally friendly energy policy, all while reducing wood waste, promoting job growth, and reducing GHG emissions. 8

9 References and Additional Resources 1 - British Columbia. Parliament. Special Committee on Timber Supply. Report on Proceedings, 39th Parliament, 4th Session, , No. 21, July 9, Vancouver. 2 - Gayton, Donald V. Impacts of Climate Change on British Columbia s Biodiversity: A Literature Review. Forrex Web Parfitt, Ben. Managing BC s Forests for a Cooler Planet: Carbon Storage, Sustainable Jobs, and Conservation. Canadian Centre for Policy Alternatives, Vancouver, BC. January, British Columbia. Ministry of Forests, Lands and Natural Resource Operations. Climate mitigation potential of British Columbian forests: Growing carbon sinks. November BioCap Canada. An Information Guide on Pursuing Biomass Energy Opportunities and Technologies in British Columbia for First Nations, Small Communities, Municipalities and Industry. ENVINT Consulting. February 7, Dymond, Caren C., and Adam Kamp. Fibre Use, net caloric value, and consumption of forest derived bioenergy in British Columbia. Biomass and Bioenergy, Vol. 70, pages , November, British Columbia. Ministry of Energy and Mines. BC Energy Plan: Report on Progress. Vancouver. April, British Columbia. Ministry of Forests, Lands and Natural Resource Operations, Forest Tenures Branch. Fibre Recovery Tenures. Administrative Guide. July Greenhouse Gas Reduction Targets Act. Statutes of British Columbia, c. 42. Canada. November British Columbia. Ministry of Energy, Mines and Petroleum Resources. BC Bioenergy Strategy: Growing Our Natural Energy Advantage. January, British Columbia. Ministry of Energy and Mines. BC Energy Plan: A Vision for Clean Energy Leadership. April,