USW Opposes End of Maryland Tax Credits for Carbon-Neutral Renewable Biofuel

Contact: Keith Romig, USW, 615-831-6786, kromig@usw.org
             Lynne Hancock, USW, 615-828-6169, lhancock@usw.org
               
Pittsburgh—The United Steelworkers Union (USW) says that proposed state legislation to end Maryland’s biofuel credit could increase pollution and fuel costs, suppress development of renewable fuels and lead to massive job loss.

Maryland House Bill 1102 and Senate Bill 684, if passed, would redefine renewable energy to exclude “black liquor”—a byproduct of the pulping process in the manufacture of paper—as a biofuel. This would eliminate the payments that paper companies currently receive from Maryland utilities for selling renewable-energy credits to them. Maryland adopted a renewable energy law in 2005 that requires utilities to buy certain minimum percentages of their electricity from renewable sources. Washington, D.C. has a virtually identical law known as the renewable portfolio standard law.

Paper companies use the spent pulping liquor, which includes bark and unused wood chips leftover from the pulping process, as fuel so that the material does not go into landfills or water. This biomass fuel is carbon-neutral because the trees that are planted for every tree brought into a mill absorb more carbon dioxide than the mill emits when it uses this biofuel.

Unlike other industries, the paper sector relies more on renewable fuel to reduce its dependency on fossil fuels, and this helps the U.S. in its overall goal to reduce its carbon imprint and dependence on other nations for fuel.

“If the fuel credit is taken away, it will change the economics of fuel use at our mill,” said USW Local 676 President Greg Harvey, who is a recovery boiler operator at the NewPage paper mill in Luke, Maryland.

“It will make the use of coal more economical and the use of carbon-neutral biofuel less attractive. What this would mean is more use of coal and less use of biofuel—a renewable resource—at our mill, which would increase net carbon emissions in Maryland,” Harvey added.

Currently, wind energy is getting the majority of Maryland’s renewable fuel credits, and keeping biomass-based sources in Tier 1 works to keep prices of renewable fuel low. But if this legislation passes and biofuels are moved to Tier II, there will be fewer renewable energy credits available and they will likely cost more. The end result is higher renewable fuel costs for consumers.

Moving biofuels to Tier II also would suppress the development of renewable fuels since it would reduce the likelihood that Maryland companies would work to increase the state’s reliance on this renewable resource.

“In addition to sending a bad message about carbon-neutral, renewable biofuel, HB 1102 and SB 684 send a bad message about jobs in western Maryland,” Harvey said. “Right now there are close to 800 union members working at my mill and about 1,000 people total work there. This is 1,000 people, in a part of our state where the overall economy is not in good shape right now, who can support their families and local businesses.

“Eliminating the payments to paper companies for their renewable fuel would likely harm my mill. Unfair imports from Asia caused two of our paper machines to close and more than 500 employees to lose their jobs. The trade pressure was eased because our union, along with my company’s help, was able to get the federal government to intervene, but trade and market pressures continue to be severe.

“Our area cannot withstand more layoffs,” Harvey added.

Harvey will be testifying on March 5 before the Maryland Senate Finance Committee about SB 684. His testimony can be read HERE.  On March 7 he will testify before the Maryland House Economic Matters Committee on HB 1102. His testimony can be read HERE.

The USW is the largest industrial union in North America and has 850,000 members in the U.S., Canada, and the Caribbean. It represents workers employed in the metals, rubber, chemicals, paper, oil, energy, government and service sectors.

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