[greenyes] Energy Bill - Renewable energy tax credits undermine recycling, sustainable production

["Doug Koplow" <koplow@no.address>]

Dear Colleagues,

Although the Energy Bill has not yet resurfaced, all indications are that it will be brought before the Senate again soon.  Although much of the debate is now focused on the ethanol and MBTE issues, it is important to remember that there are poorly thought out and very expensive provisions in virtually every section of the bill.

Section 1302, granting tax credits to certain "renewable" energy resources is no exception, as the language goes far beyond what is normally considered a renewable resource.  To access the full review and supporting data tables, follow this link:

http://earthtrack.net/earthtrack/index.asp?page_id=167&catid=76


Among the key findings:

* A vast array of combustible materials are now eligible for a tax credit if they are burned for electricity.  This includes old growth timber, virtually any residue from agricultural operations, and most organic fractions within the waste stream.  

* The bill misdefines "municipal solid waste" using the much broader definition for "solid waste," opening up the tax credits to any "solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities."  This would include hazardous waste.

*Current estimates of for the cost of this provision ($3.1-$4.7 billion) are likely much too low.  More than half of this amount supports existing biomass facilities that add nothing to energy independence; and landfills and waste-combustion plants, both which have important environmental detriments.

*The ability to receive subsidies for burning or landfilling materials, but not for composting or recycling them, will further weaken the economics for municipal recycling programs around the country.  Subsidies to landfills and waste-to-energy plants alone are estimated between $900 million and $1.4 billion.

*The bill allows existing biomass plants to obtain 5 years of tax credits, regardless of how long they have been operating.  Under the most likely interpretations of legislative language, this would primarily benefit paper mills, and could be worth up to $1.1 billion to the sector.  Were all biomass cofiring to be eligible for the tax credit, more than $400 million of this amount would flow to a single company  - International Paper.  

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_______________________________
Doug Koplow
Earth Track, Inc.
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Cambridge, MA  02140
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