BILL ANALYSIS Ó SB 804 Page 1 Date of Hearing: August 13, 2013 ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS Luis Alejo, Chair SB 804 (Lara) - As Amended: August 5, 2013 SENATE VOTE : 32-7 SUBJECT : Biomass and Composting SUMMARY : Provides expanded authority for biomass and composting facilities. Specifically, this bill : 1) Includes conversion technologies that use specified biomass feedstock in the definition of "biomass conversion" for purposes of the Integrated Waste Management Act (IWMA). 2) Defines composting under the IWMA to include aerobic decomposition and anaerobic decomposition of organic waste. EXISTING LAW : 1)Requires cities and counties to divert 50% of the solid waste disposed of within their jurisdiction through source reduction, recycling, and composting, but authorizes a city or county to comply with up to 10% of the 50% diversion requirement through biomass conversion. This requirement is contained in the IWMA. 2)Defines "biomass conversion" as the controlled combustion of agricultural waste, yard and garden clippings, leaves and forestry residue, wood chips, wood waste and non-recyclable pulp or non-recyclable paper materials when these substances are separated from other solid waste. The combustion of these materials is used for producing electricity or heat. 3)Excludes from the definition of "biomass conversion" the controlled combustion of pulp or paper materials, sewage or industrial sludge, medical, hazardous, or radioactive wastes. 4)Defines "composting" to mean the controlled or uncontrolled biological decomposition of organic wastes. FISCAL EFFECT : Unknown. SB 804 Page 2 COMMENTS : 1)Need for the bill . According to the author, existing California law defines "biomass conversion" as the direct combustion of certain listed types of biomass materials. This definition excludes conversion technologies that can more efficiently generate electricity from biomass with lower air emissions. Additionally, existing law is unclear regarding how anaerobic digestion facilities should be permitted. This hampers the state's goals of diverting additional organic materials from disposal". 2)Biomass in California According to the State Energy Commission, at present biomass in California is converted to electric power though one of two processes based on the characteristics of the biomass. Two-thirds of California's biomass power capacity is generated by the direct combustion of solid biomass in boiler-steam turbine plants, ranging in size from about 5 to 50 MW. The remainder is generated by the combustion of landfill gas and biogas in a range of power generating equipment including boiler-steam turbine systems, reciprocating engines, and gas turbines. According to information from the California Biomass Collaborative, there are 22 biomass conversion facilities in commercial operation in California. These plants are located throughout the state, often near timber harvest or agricultural operations. Most of these facilities were built in the 1980s or early 1990s, after the federal Public Utilities Regulatory Policy Act (PURPA) of 1978 required utilities to purchase power provided by qualifying independent power producers at relatively attractive rates. However, California's regulatory policies were restructured in 1996, decreasing the financial incentives available for biomass conversion facilities. Biomass facilities are generally subject to local air quality district regulations and permit requirements. For new or modified facilities, "New Source Review" (NSR) regulations may require the use of "best available control technology" (BACT) for PM, NOx, SOx, or other emissions. NSR may also require the use of emission reduction credits (ERCs). In addition, SB 804 Page 3 federal rules that govern the permitting of new or modified facilities may apply. The primary GHG emitted from biomass conversion plants is carbon dioxide, which is not controlled. Pending Biomass Projects: The County of Los Angles (a sponsor of the proposed legislation) has undertaken a Conversion Technology Demonstration Project and has approved three conversion technology demonstration projects designed to address the dwindling landfill space in Los Angeles. To date, none of the proposed projects would rely on a biomass conversion technology include in this bill. According to the California's Department of Resources Recycling and Recovery (CalRecycle), one potential project that may be affected by his change in facility definition is the Cabin Creek Biomass Facility Project Truckee, Placer County. Placer County is proposing to construct a two-megawatt (MW) wood-to-energy biomass facility at the Eastern Regional Materials Recovery Facility (MRF) and Transfer Station that would use a gasification technology. 3)Biomass Projects Problems in California: Some biomass facilities in California a have a history of environmental issues including Clear Air act violations. In 2011, the U.S. Environmental Protection Agency and the San Joaquin Valley Air Pollution Control District lodged consent decrees against two biomass power plants in Chowchilla and El Nido, California. The two companies have agreed to pay a combined civil penalty of $835,000 to resolve alleged violations of the federal Clean Air Act and District rules, including excess emissions of air pollutants such as nitrogen oxides, a precursor to ozone, and fine particulates. 4)Aerobic and Anaerobic Composting : Aerobic composting is the principle at work in aboveground composting environment, whether it takes place in a freestanding pile or in a container that provides air circulation, such as a bin with open sides or a tumbler with aeration holes. In an anaerobic system there is an absence of gaseous oxygen. SB 804 Page 4 Oxygen is prevented from entering the system through physical containment in sealed tanks. Anaerobes access oxygen from sources other than the surrounding air. The oxygen source for these microorganisms can be the organic material itself or alternatively may be supplied by inorganic oxides from within the input material. When the oxygen source in an anaerobic system is derived from the organic material itself, then the 'intermediate' end products are primarily alcohols, aldehydes, and organic acids plus carbon dioxide. In the presence of specialized methanogens, the intermediates are converted to the 'final' end products of methane, carbon dioxide with trace levels of hydrogen sulfide. CalRecycle's regulation relating to anaerobic digestion requires that it be conducted "in vessel. Regulating Anaerobic Digestion and Composting : CalRecycle regulates solid waste handling, processing and disposal, including the operation of landfills, transfer-processing stations, material recovery facilities, compost facilities and waste-to-energy facilities, or conversion facilities (transformation). CalRecycle's regulatory structure is designed to provide a level of regulatory oversight commensurate with the impacts associated with a solid waste handling or disposal activity. Transformation facilities, including incineration and pyrolysis, use municipal solid waste (MSW) as their feedstock, and are required to obtain a full solid waste facility permit, which entails the greatest level of review and oversight due to the potential hazards associated with processing MSW. Because of the extensive permitting requirements, full solid waste facility permits are much more costly and time consuming to obtain for the owner or operator. The definition for transformation includes "other biological conversion other than composting" and because current law lacks a definition for anaerobic digesters, concerns have been raised that anaerobic digestion could fall under the definition of high-heat technologies commonly identified with transformation, making such facilities more difficult to permit in the state. 5)Arguments in Support : Support for this bill comes from local government including Ventura County who stated: "SB 804 redefines the term "biomass SB 804 Page 5 conversion" to include other conversion technologies in and clarifies that "composting" includes aerobic and anaerobic decomposition of organic wastes. Such technologies promote the highest and best use of resources while supporting the state's key environmental goals. Ventura County supports the vision of solid waste as a potential local resource rather than material destined for disposal within our local landfills. Further, by including conversion technology as a viable option for solid waste management, we can address the state's Bioenergy Plan, which has identified municipal solid waste as a substantially underutilized resource for biomass feedstock; not only can this feedstock produce renewable fuels and energy but it can also help achieve the environmental goals established by AB 32, including the Renewable Portfolio Standard, Low Carbon Fuel Standard and reducing Green House Gas (GHG) emissions. California can benefit from conversion technologies through their potential to create green jobs, reduce greenhouse gas emissions and other pollutants, reduce groundwater contamination, produce green fuels and electricity, and improve recycling rates while diverting trash from our state's landfills." 6)Arguments in Opposition : Opposition to this bill from environmentalists raised concerns about the safety of conversion technologies. According to the Sierra Club California, "Conversion technologies using high-heat processes like pyrolysis and gasification bear substantial similarities to incineration. Combustion for energy production is responsible for air, water and land pollution. These pollutants, including smog, acid rain, and persistent bioaccumulative toxics, threaten human health and the environment. Since burning produces CO2, biomass conversion technologies can aggravate global warming. The EPA now suggests "It is not safe to assume biomass power plants are carbon neutral." 7)Recommended Amendments: The purpose of this measure is to parse the definition of biomass conversion that would allow cities and counties to send increased material to a biomass facility and receive a credit against the 50% diversion requirement applicable to local agencies under the Integrated Waste Management Act. SB 804 Page 6 The broadened definition of biomass may allow applicants to avoid solid waste incineration rules. Much of the materials allowed to be burned under the Biomass permits are classified as solid waste under California solid waste laws. Yet, the project is able to avoid solid waste incinerator facility siting laws by calling itself a renewable energy "biomass" project. Across the country, biomass facilities often avoid siting laws that would require comprehensive environmental reviews and more community input. a) The bill as drafted provides no definition of conversion technologies. The Committee may wish to provide a definition of what constitutes these non-combustion technologies by identifying the goals or outcome form the conversion process. b) Expanded definition of biomass "conversion" does not require net environmental benefits from such technologies. While the information supplied to the committee by the sponsors suggests that conversion technologies are environmentally beneficial and preferable to incineration or controlled combustion for waste solid waste or wood products, nothing in this measure suggests that a test should be applied to these technologies prior to endorsing their widespread use. The Committee may wish to include a standard that new conversion technologies be more protective of the environment than the currently authorized combustion facilities. c) With the expanded definition of biomass projects and the ability of waste processed as biomass the waste will no longer be subject to the current 50% waste reduction and recycling requirements. The committee may wish to include requirements that the new conversion technology biomass projects certify that they both removed recyclable materials from the waste stream and that local agencies are meeting their waste reduction requirements prior to sending material to new biomass facilities. d) CalRecycle lacks clear enforcement authority to determine if biomass facilities are processioning non-authorized waste material. The reduced regulatory oversight for biomass facilities is based in part on the limited organic feed stock that is processed by the facilities. The current law lack specific authority for SB 804 Page 7 CalRecycle or the local enforcement agency to inspect and insure that the feed stock is, in fact, the limited material. The Committee may wish to include authority for inspection of these feed stocks to ensure that unauthorized municipal solid waste is not stored or used at these facilities. 8)Related legislation : a) AB 997 (Chesbro) of 2013 defines anaerobic digestion in the Integrated Waste Management Act and amends the definition of composting to include anaerobic digestion processes. AB 997 is currently on the Assembly floor. b) AB 1126 (Gordon) of 2013 adds thermal conversion to the definition of biomass conversion, clarifies that composting includes anaerobic digestion, and makes other changes related to municipal solid waste conversion. AB 1126 is currently in Assembly Natural Resources Committee. 9)Double Referral . SB 804 was heard in the Assembly Natural Resources Committee on July 1, 2013 and passed on a 9 to 0 vote. REGISTERED SUPPORT / OPPOSITION : Support County of Los Angeles (sponsor) California State Association of Counties (sponsor) City of Torrance County of Santa Barbra County of Santa Clara County of Ventura Environmental Problem Solving Enterprise North Valley Coalition of Concerned Citizens, Inc. Salinas Valley Solid Waste Authority Opposition Global Alliance for Incinerator Alternatives Greenaction for Health and Environmental Justice Sierra Club California SB 804 Page 8 Analysis Prepared by : Bob Fredenburg / E.S. & T.M. / (916) 319-3965