A group of environmental activists is calling on state lawmakers to end state subsidies and tax credits for companies that produce wood pellets, arguing that foreign companies are destroying Southern forests while reaping economic benefits.
At a press conference on the steps of the State Capitol earlier today, Dogwood Alliance and the Sierra Club released figures showing several foreign wood pellet producers received incentives from the state totaling nearly $85 million.
“We are subsidizing an industry that is destroying our forests,” says retired Lt. Gen. Russel Honoré, who helped coordinate military disaster relief post-Hurricane Katrina and has since become a self-appointed environmental activist, in a prepared release. “European studies are coming out now that show burning wood pellets is worse than burning coal.”
The companies singled out by Honoré include: British-based electricity producer Drax Group, which has been promised $9.7 million in low-interest loans, grants, capital outlays and property tax breaks; and German Pellets Louisiana, which is building facilities in Urania and has been promised $37.5 million in property tax breaks over five years with the possibility of extending the tax breaks for another five years for a total of $75.4 million over a decade.
Subsidies were not disclosed for Biomass Secure Power Inc., a Canadian pellet maker that is supposedly proceeding with facilities in Port Allen and Port of Natchitoches. The status of its projects is unclear.
In response to the criticisms levied at the press conference, Louisiana Economic Development Secretary Stephen Moret defended the incentives and the wood pellet industry.
“Discretionary state incentives for wood pellet plants in Louisiana have been small, consisting principally of infrastructure improvements, such as access roads,” Moret tells Daily Report. “Of course, these projects also utilize a variety of statutory state incentive programs that are available to all manufacturers doing business in Louisiana. Wood pellets chiefly will be sourced from non-core products that are currently underutilized, such as wood waste. These projects are being developed in rural areas where quality jobs are badly needed, and they are providing much-needed markets for tree farmers in the aftermath of significant paper mill closures.”
—Stephanie Riegel
