How Europe's CO2 Cap and Trade Means Georgia Jobs

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WAYCROSS, Ga.—Pawn shops, diners, churches and pine trees. Hundreds of thousands of pine trees.

This is the view from U.S. Route 85, which runs from the coast across the Southern ridge of Georgia. In recent years, though, something else has sprouted up: billboards advertising upcoming wood pellet plants. They carry the promise of steady jobs in a recession-racked economy.

In 2008, then-Georgia Gov. Sonny Perdue called this region the "bioenergy corridor of the nation." To date, 13 wood pellet plants have opened throughout the southeastern United States. Twelve more are in the planning stage.

While the local pulp and paper industry has been on the wane for years, the demand for wood pellets has recently shot up. These are the result of a process that turns wood chips into pencil-sized cylinders that are chopped up into roughly inch-long pieces.

The resulting product is lighter, drier, more compact and easier to transport than chips or sawdust -- a better option for shipping to Europe, where the demand for them has been created by the European Union's renewable energy mandates. It stems from a 2003 law setting up the E.U. Emissions Trading System and a 2009 renewable energy directive that called for E.U. member states to collectively generate 20 percent of energy from clean energy sources by 2020.

For power plants that burn coal, the quickest way to lower emissions, meet renewable energy goals and get emissions trading benefits is to burn a rising percentage of wood pellets along with the coal. As a result, demand for wood energy in Europe is set to soar by 44 percent in the next decade, according to forests research group RISI.

Waycross, one of the gateways to the Okefenokee swamp, became the home of Georgia Biomass LLC in May. It is the largest wood pellet factory in North America and, arguably, the world. Owned by European utility RWE Energy, the company is ramping up to export up to 750,000 metric tons of wood pellets per year to generate electricity in the United Kingdom and the Netherlands.

http://www.scientificamerican.com/article.cfm?id=how-europes-co2-cap-and-trade