FFC Urges SEC To Scrutinize Biomass Energy Claims

January 9, 2014

As part of a group of investors representing over $100 billion in assets under management, FFC urges the Securities and Exchange Commission to review filings by three leading U.S. companies – Dominion Resources, Southern Co. and Covanta, which operate some of the largest wood-burning plants in the United States. FFC is concerned about the biomass industry’s misleading “clean” and “carbon neutral” claims as well as the above companies’ non-disclosure of regulatory concerns, particularly in the context in which investment in biomass competes with investment in non-polluting, renewable energy like wind and solar. As expressed in the letter to the SEC: “Bioenergy should be required by the SEC to compete for investment dollars without materially exaggerating its value to the environment, or concealing its weaknesses and uncertainties.” “Biomass energy” (or bioenergy) refers to the generation of heat and electricity by burning wood and other biological matter as fuel in industrial, commercial, and utility boilers. Biomass energy generation can be carbon neutral if all C02 is offset, yet uncertainties surrounding securing C02 offsets means that “carbon neutral” claims are based on speculation and assumption. Burning biomass also often emits greater “conventional” air pollutants like particulate matter, nitrogen oxides and carbon monoxide per mega-watt hour of electricity produced compared to coal and natural gas. Greenhouse gas emissions from biomass energy are likely to become subject to new regulations and have already seen cuts in renewable energy subsidies on the state level. Dominion, Southern and Convanta have asserted to state and federal regulators that new policies and regulations could make bioenergy uneconomical, yet these concerns were not disclosed to the SEC and investors. FFC believes that misleading and incomplete corporate filings challenge the investor’s ability to make informed decisions and compromise the reputation of the responsible companies, which is bad for business, especially in the long-term. To view the letter sent to the SEC, click here