Winners and Losers in the Climate Rule

Jun 05, 2014

 By Donna Harman
 President & CEO
 National Journal Energy Insiders Blog

 Under EPA’s new climate standards, anyone who purchases
 electricity stands to lose in one way or another.

 As a significant user of purchased electricity, the paper and wood
 products industry stands to lose more than the average consumer. We already spend over $5 billion a year on purchased electricity and face the prospect of steep cost increases passed on from utilities who must comply with other Clean Air Act and Clean Water Act programs.

These are just the indirect effects of the new utility standards; we also face substantial capital investments due to other regulations that EPA is poised to issue, such as ozone National Ambient Air Quality Standards and Prevention of Significant Deterioration / Title V rules. American manufacturers need EPA, the administration, and Congress to consider the implications that large utility rules have in the context of overall regulatory burden. All told, the regulatory pile-on will adversely affect our global competitiveness and the jobs our industry provides, many of which are in rural settings that cannot absorb job losses.

EPA has the opportunity to act on the principles it set forth this week about the role of biomass-derived fuels in energy production as it prepares to issue its Accounting Framework for Biogenic CO2 Emissions. EPA recognized the role that biomass-derived fuels play in greenhouse gas (GHG) reduction strategies and that burning biomass for energy can yield climate benefits as compared to burning fossil fuels, yet it essentially treats biogenic and fossil fuel CO2 the same. The time has come to fully recognize the benefits of biomass-based energy.

Our industry’s commitments to renewable biomass energy and energy efficiency, which include our use of highly-efficient combined heat and power technology, have led to a dramatic decrease in fossil fuel use and GHG emissions, and we have a goal in place to reduce GHG emissions even more. Since 1990, AF&PA members decreased fossil fuel use in their pulp and paper mills by 30 percent, helping to reduce our greenhouse GHG emissions by 19 percent since 2000. We have also voluntarily committed to a reduction of at least 15 percent by 2020, from a 2005 baseline.

Sustainability is a huge priority for our industry, as evidenced by our history of continuous improvement, and we are committed to working with EPA and others to meet rigorous environmental standards. However, we are rapidly approaching a point where the sheer volume of these regulations will harm our industry’s ability to compete in the global marketplace, forcing jobs and business to other countries where people and the environment are not as closely guarded.