BILL ANALYSIS Ó SB 498 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Jerry Hill, Chair 2013-2014 Regular Session BILL NO: SB 498 AUTHOR: Lara AMENDED: January 7, 2014 FISCAL: Yes HEARING DATE: January 15, 2014 URGENCY: No CONSULTANT: Rebecca Newhouse SUBJECT : BIOMASS: CONVERSION TECHNOLOGY SUMMARY : Existing law , under the California Integrated Waste Management Act (Act): 1) Requires each city or county source reduction and recycling element to include an implementation schedule that shows a city or county must divert 50% of solid waste from landfill disposal or transformation by January 1, 2000, through source reduction, recycling, and composting activities (Public Resources Code §41780). 2) Establishes a state policy goal that 75% of solid waste generated be diverted from landfill disposal through source reduction, recycling, or composting by 2020 (PRC §41780.01). 3) Defines "transformation" to mean incineration, pyrolysis, distillation, or biological conversion other than composting and specifies that "transformation" does not include composting, gasification, or biomass conversion (PRC §40201). 4) Defines "biomass conversion" to mean the controlled combustion, when separated from other solid waste and used for producing electricity or heat of specified biomass, including, agricultural crop residues, bark, lawn, yard, garden clippings, leaves, silvicultural residue, tree and brush pruning, wood, wood chips, and wood waste and nonrecyclable pulp or nonrecyclable paper materials (PRC SB 498 Page 2 §40106). 5) Specifies that "biomass conversion" does not include the controlled combustion of recyclable pulp or recyclable paper materials, or materials that contain sewage sludge, industrial sludge, medical waste, hazardous waste, or either high-level or low-level radioactive waste (PRC §40106). This bill : 1) Includes conversion technologies in the definition of "biomass conversion." 2) Defines "conversion technology" as a method capable of converting biomass into marketable products and fuels through a noncombustion thermal, chemical, or biological process. COMMENTS : 1) Purpose of Bill . According to the author, "Existing California law defines "biomass conversion" as the direct combustion of certain listed types of biomass materials such as yard clippings, wood waste, and agricultural residues. This definition excludes conversion technologies that can more efficiently generate electricity from those same biomass materials with lower air emissions. SB 498 will help facilitate cleaner and more efficient technologies to develop in California for converting organic waste to electricity and help the state reach its 75% waste reduction goal. Specifically, SB 498 includes conversion technologies (CT) within the definition of biomass conversion. While CT could potentially have positive environmental impacts in California, our ability to use CTs as a potential "tool in our tool box" of waste diversion technologies is hindered by a lack of inclusion of CT in current conversion definitions." 2)Conversion technologies . According to CalRecycle, conversion technologies are processes that can convert organic materials into usable forms of energy including heat, steam, electricity, natural gas, and liquid fuels. SB 498 Page 3 Thermochemical conversion processes are characterized by higher temperatures and faster conversion rates and include combustion, gasification, and pyrolysis. Pyrolysis is the thermal decomposition of feedstock at high temperatures (greater than 400?F) in the absence of air, whereas gasification is a process that uses air or oxygen and high heat, (typically above 1300?F) to convert feedstock into a synthetic gas or fuel gas. Gasification uses less air or oxygen than incineration processes. Thermochemical conversion is best suited for lower moisture feedstocks. Biochemical conversion processes include aerobic conversion (i.e., composting), anaerobic digestion (which occurs in landfills and controlled reactors or digesters), and anaerobic fermentation (for example, the conversion of sugars from cellulose to ethanol). Biochemical conversion proceeds at lower temperatures and lower reaction rates. Higher moisture feedstocks are generally good candidates for biochemical processes. Physiochemical conversion involves the physical and chemical synthesis of products from feedstocks (for example, biodiesel from waste fats, oils, and grease--known as FOG) and is primarily associated with the transformation of fresh or used vegetable oils, animal fats, greases, tallow, and other suitable feedstocks into liquid fuels or biodiesel. The definition of transformation in current law captures many thermochemical and biochemical conversion technologies, but some processes that would technically qualify as conversion are specifically excluded by statute, namely composting, gasification and biomass conversion (i.e., combustion of greenwaste). 3) Solid waste diversion credit for biomass at conversion facilities . Current law requires jurisdictions to divert 50% of solid waste from landfill disposal or transformation through source reduction, recycling, and composting activities. Prior to 2008, diversion estimates to determine compliance with the 50% diversion mandate were performed by calculating the quantity of solid waste generation and estimating the amount of diversion. SB 1016 (Wiggins) SB 498 Page 4 Chapter 343, Statutes of 2008, changed the diversion calculation by only considering the quantity of disposal, as reported by disposal facilities (transformation facilities and landfills) and the jurisdiction's population, and comparing that value to a baseline rate of disposal. Biomass conversion, currently defined as the controlled combustion of specified biomass feedstocks when separated from municipal solid waste, is excluded from the definition of transformation, and therefore, biomass that is combusted at a biomass conversion facility is not counted as disposal. SB 498, by adding conversion technologies in the definition of biomass conversion, would exclude those same feedstocks when processed by conversion technologies, from being counted as disposal . 4) Biomass in California . According to data from the California Biomass Collective, there are 28 operational facilities in the state using wood or agriculture biomass with a net generation of 565 megawatts (MW). In addition to these larger scale, biomass combustion facilities, there are a handful of small scale, demonstration and/or research projects in the state that use a noncombustion conversion technology, which generate or plan to generate anywhere from a fraction of an MW to several MWs using biomass. Of these facilities, the Dixon Ridge Farms in Dixon, CA uses a gasification technology to generate 0.1 MW of electricity from woody and agricultural biomass, and the Cabin Creek Biomass Facility Project in Placer County is proposing to construct a two-megawatt wood-to-energy biomass facility that would also use gasification technology. 5) Biomass and RPS . Current law identifies electrical generation facilities that use biomass as renewable electrical generation facilities and can be certified, if they meet fuel specific requirements, by the CEC as RPS-eligible, and therefore may be used by retail sellers of electricity, and POUs to satisfy their RPS procurement goals. The California Energy Commission defines biomass as any organic material not derived from fossil fuels, including SB 498 Page 5 the feedstocks eligible under biomass conversion. Because, for facilities using biomass to generate electricity, the CEC looks at the biomass used, and not the type of technology used to process that biomass, SB 498 does not alter current law regarding RPS credit and biomass conversion technology facilities . 6) SB 804 . SB 498 (Lara) is very similar to the version of SB 804 (Lara) heard in this committee last year, and that passed out on a 6-1 vote. SB 804 was subsequently amended in the Assembly Environmental Safety and Toxic Materials Committee to add a new chapter containing various additional requirements for noncombustion biomass conversion technology facilities, and was ultimately vetoed by the Governor. According to the Governor's veto message, "This bill would expand the existing definition of biomass conversion to include non-combustion thermal, chemical, or biological processes. While I agree with the intent of the bill, last minute amendments made the bill overly complicated and unworkable. Therefore, I am directing the Department of Resources, Recycling and Recovery, in conjunction with stakeholders, to develop a sensible approach that would apply to all biomass facilities irrespective of the technologies used." 7) Definition of conversion technology . SB 498 defines the term conversion technology for the purposes of the amended section. This definition, in addition to including conversion technologies such as gasification-type or pyrolysis technologies, is relatively broad and may also capture anaerobic digestion and composting processes. The committee may wish to suggest that the author commit to working with committee staff, CalRecycle and stakeholders to determine if the definition of conversion technologies needs to be narrowed, and if so, to amend the definition as appropriate. 8) Related legislation . SB 804 (Lara) of 2013 included conversion technologies in the definition of biomass conversion and added requirements for those facilities. SB SB 498 Page 6 804 was vetoed by the Governor. SOURCE : California State Association of Counties County of Los Angeles SUPPORT : Anaergia Services City of Torrance City of Vernon County of Santa Barbara County of Ventura Los Angeles County Solid Waste Management Committee/ Integrated Waste Management Task Force Rural County Representatives of California OPPOSITION : None on file