EM-2009-01-energy_globe_business.jpgThe U.S. EPA greenhouse gas regulations provided biomass facilities with an important incentive – a unique “deferral” from having to achieve established CO2 emission limits. For certain biomass facilities not being regulated for CO2 emissions had significant benefits from both a capital and operational cost perspective.  There likely are a number of biomass facilities which currently owe their financial viability to the deferral.

Last week, in Center for Biological Diversity v. Environmental Protection Agency, the U.S. Court of Appeals for the D.C. Circuit struck down USEPA’s biomass deferral as arbitrary and capricious, determining that the U.S. EPA did not establish that the Clean Air Act would allow for the regulatory deferral for biomas facilities.

It will be interesting to see what the near-term impacts of this decision are for this segment of the renewable energy industry and whether the U.S. EPA will attempt, via a future rulemaking, to put the deferral back in place. The future viability of a number of biomass facilities may very well hang in the balance.