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VEIC Report Identifies Policies to Advance Sustainable Use of Biomass Heat in the Northeast U.S.

Adam Sherman -

As the Northeast region of the United States looks to decrease its reliance on imported fossil fuels used for heating, local biomass energy has emerged as a resource with notable promise. When obtained locally from well-managed forests and farms, biomass resources have the potential to significantly reduce our dependence on heating oil, propane, and natural gas. Greater use of these resources can also provide a wide range of economic and environmental benefits. State policy makers and regulators should consider biomass thermal energy as part of their overall energy policies and strategies, to address all sources of energy.

The Northern Forest Center commissioned the Biomass Energy Resource Center (BERC), a program of the Vermont Energy Investment Corporation, to analyze policies related to the use of Northern Forest Region biomass resources for heating. This region, rich in biomass resources, encompasses the northern reaches of the states of Maine, New Hampshire, Vermont, and New York.

The analysis was designed to answer four key questions for policy makers and regulators:

  • What policies and regulations are currently in effect in the Northern Forest region that affect development and use of biomass thermal energy and where are there gaps?
  • How have existing policies and/or regulations helped to advance or to hinder the use of biomass thermal energy in the region?
  • What new policies are needed to advance the adoption of biomass thermal energy? Has legislation been developed that can serve as a model for other states?
  • What are key next steps for advancing biomass thermal energy policy in the Northern Forest region?

In addressing these questions, VEIC’s report identified a number of hurdles standing in the way of increased adoption of biomass thermal energy:

  • The relatively high capital costs of modern efficient biomass systems compared to typical fossil fuel systems;
  • Access to capital and market friendly financing;
  • Public misconceptions about wood heating, and
  • A lack of regulatory and policy framework to support advancement of biomass thermal energy.

Addressing these hurdles will require a combination of policies – regulatory, legislative, and financial. One recommendation of the report is the implementation of “low-hanging fruit” policies that can effectively help incentivize the biomass thermal market. Simple policies like state sales tax exemptions and income tax credits for biomass heating equipment could provide quick-win opportunities for greater regional adoption of this energy source.

The report also recommends that state and local policy makers “lead by example” by installing thermal renewable energy systems in the thousands of buildings that they themselves own and operate. While lowering energy costs and carbon emissions, such action would also demonstrate to the private sector and the general public that biomass thermal energy is a practical, affordable, mainstream heating option.

The report also finds that policy makers and regulators will need a programmatic structure for actually implementing these policies in order to achieve the goal of increasing the use of biomass heating in the Northeast region. Putting policies such as a sales tax exemption in place will be of limited success unless accompanied by programmatic support such as consumer education and outreach to overcome perceptions about cost and system usability.

Unlike the electricity market, the biomass thermal market is not subject to significant state or federal regulatory oversight. In this context, each Northeastern state is unique, and will necessarily design its own package of policies. That said, greater regulatory policy consistency (air emissions, boiler safety, etc.) across the region would help to support adoption of biomass thermal energy at a significantly higher scale.

Download the full report
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