The Virginia Forestry Association (VFA) appreciates the opportunity presented by the Virginia Department of Environmental Quality (DEQ) and the State Air Pollution Control Board to comment on the re-proposed regulations governing the Commonwealth’s potential admission to the Regional Greenhouse Gas Initiative (“RGGI”), with its stated action to “Reduce and Cap Carbon Dioxide from Fossil Fuel Fired Electric Power Generating Facilities.”  VFA previously co-filed comments with the National Alliance of Forest Owners on April 9, 2018 in response to the Department’s original proposed regulations published January 8, 2018.

VFA represents Virginia’s diverse forestry community and promotes the sustainable use and conservation of forest resources to ensure their long term social benefits for all Virginians. Our 1200 members include a vast array of forest product businesses, woodland owners, and forestry professionals. We believe that conservation and sustainable use of forest resources drive ecological, economic, and social prosperity in Virginia.  

Regarding 9 VAC 5-140, we are certain the revised proposed regulation would provide unfavorable outcomes that significantly differ from the intent of the original version. These results, in fact, would be detrimental for forest products industry operations and important biomass markets for forest landowners. The revised regulation would apply to biomass-fueled utilities that co-fire with 5 percent or more fossil fuel. Also, biomass-based CO2 emissions from those facilities are not recognized as carbon neutral. In addition, it does not clearly exempt all existing and potential new industrial facilities from the program, erroneously regulating new industrial boilers that burn carbon neutral biomass.

We urge DEQ to revise the regulation to clarify:

1. That it only applies to greenhouse gas (GHG) emissions from fossil fuel combustion and not emissions from biomass combustion, officially recognizing biogenic carbon dioxide emissions as carbon neutral irrespective of whether other fuels are co-fired.
2. That new and existing industrial facilities and boilers are clearly exempt from any allowance obligations. 

Because of the confusion created by the changing policy in the process of developing this regulation and the potential for detrimental outcomes to the forestry community, VFA is also now opposing Virginia’s participation in RGGI at this time.      

Forestry is the Commonwealth’s third largest industry. According to the May 2017 publication, The Economic Impact of Virginia’s Agriculture and Forest Industries, produced by the University of Virginia’s Weldon Cooper Center for Public Service, “the forestry sector had a total impact of over $21 billion in total output, approximately 107,900 jobs, and 9.3 billion in value-added.” This annual economic contribution depends on our 15.72 million acres of forestland of which more than 13 million are privately owned working forests. Timber sales in Virginia result in more than 5,000 logging operations each year, resulting in $388 million in stumpage (the sales value of standing timber to landowners) in FY2015, a new state record. At the same time, our Virginia foresters and forest resource professionals serve as stewards of our land, managing lands in a sustainable manner by reforesting and implementing best management practices (BMPs).

According to the Virginia Department of Forestry’s (DOF) 2018 State of the Forest publication, the ratio of the forest’s annual growth compared to harvest volume (on private and state lands) is more than 2.3 to 1 for softwood species and 2.6 to 1 for hardwood species. This amounts to an annual surplus of 10.5 million tons of softwood and 17.6 million tons of hardwood statewide on commercial timberland. Also, DOF’s most recent statewide audit system of BMP implementation and effectiveness shows that the BMP harvest median implementation rate on 240 randomly selected tracts is 95 percent statewide. The audit results also showed that 100 percent of the sites visited had no active sedimentation present after the close-out of the operation.

Generating and selling biomass fuel is a vital segment of forest product marketing and operations chain, and biomass is a carbon-neutral fuel source needed to support private forestland owners. Harvest residuals such as tops, limbs, and undersized stems, are often chipped in the field to generate “mixed chips,” which are then sold to power generation facilities to produce heat or electricity. These mixed chips are supplements to mill residues, such as black liquor, and other used wood materials that can be burned to generate power. According to forest tax receipt data provided by the DOF, mixed chips produced in fiscal years 2015 and 2016 represented approximately 19 percent of the total cubic feet of Virginia forest products generated in those years, with the remainder being the actual logs harvested for pulp, lumber, and other wood product manufacturing. While mixed chips are the lowest-value forest products, they represent a critically important source of income for woodland owners in the Commonwealth. (Publicly available Virginia Forest Product Tax Receipts as collected and reported by the Virginia Department of Taxation and DOF)

In summary, we urge DEQ and the Air Pollution Control Board to:

1. Resist joining RGGI at this time.
2. Maintain industrial exemption for boilers.
3. Recognize biogenic carbon emissions as carbon neutral and exempt from the regulation.

Thank you once again for considering our sincere comments based on our best analysis. Please contact me if you have any further questions.