CUMBERLAND — A bill that includes a list of renewable energy sources and makes the Luke paper plant eligible for renewable energy certificates continues to make progress toward passage in the General Assembly.
The subsidy for use of a byproduct of papermaking called black liquor was set to be eliminated, but the legislation now includes a provision to help the plant. The bill now has the support of the Chesapeake Climate Action Network, which said it has been working on the bill more than a year.
“It’s a great bill ... we all care about Maryland jobs,” said Tom Carlson, the Maryland campaign director for the network. Carlson said the bill accomplishes key environmental goals at the same time.
“It’s like taking 250,000 cars off the road,” said Carlson. The bill is also good for consumers, because it stops tax dollars from going to out-of-state companies. In 2011, Carlson said, the certificates were worth $3.8 million, 91 percent of which ended up out of state.
A second reading of the bill passed the Senate on Tuesday.
The energy certificates can be traded and sold. Their value is equal to one megawatt-hour of electricity generated by a renewable energy source. The initial bill would have redefined renewable energy sources to exclude black liquor from eligibility for the certificates.
The United Steelworkers Union, among other groups, opposed the initial bill, which would have ended the subsidy.
“If the fuel credit is taken away, it will change the economics of fuel use at our mill,” said USW Local 676 President Greg Harvey, who is a recovery boiler operator at the NewPage paper mill at Luke. Harvey was cited in a USW press release. The mill recently laid off about 44 employees. The Luke plant is owned by NewPage, a Wisconsin-based company.
“Biomass-based fuel plays a vital role in our country’s renewable energy portfolio by providing low-cost base load energy that complements the use of other renewable fuel sources, enhancing the reliability of renewable energy for Marylanders,” said Jessica McFaul press secretary of the American Forest & Paper Association.
“Biomass is carbon neutral, renewable, clean energy that reduces the state’s dependence on fossil fuels and keeps energy costs down. We believe that any move to eliminate biomass ... would be short-sighted,” McFaul said.
Carlson said the current bill’s certificates for the mill would expire in 2018. The bill, though, directs the governor to find funding for the plant equivalent to what they might lose.
“Amendment three directs the governor to include funding for the Maryland Luke Mill each year post 2018 equivalent to the average yearly renewable subsidy they receive from 2013 through 2018. This ensures support for the Maryland mill in perpetuity,” Carlson said in an email.
Black liquor is used as fuel “so that the material does not go into landfills or water. This biomass fuel is carbon-neutral because the trees that are planted for every tree brought into a mill absorb more carbon dioxide than the mill emits when it uses this biofuel,” according to the USW press release. One major environmental organizations doesn’t agree with that take on the process.
NewPage recently emerged from Chapter 11 bankruptcy.
The bankruptcy case began in September 2011 and ended December 2012.
NewPage has struggled with decreasing demand for paper products and alleged unfair competition by Chinese paper producers. According to a study completed by the Economic Policy Institute, paper production in China has tripled in the last 10 years despite a global market that seems saturated.
The study indicates subsidies by the Chinese government are impacting the U.S. paper market negatively.
New Page Corp., based in Miamisburg, Ohio, is a leading producer of coated paper in North America that operates 10 paper mills with 20 paper machines in the U.S. and Canada.