Maryland-based Enviva LP will qualify for up to $1.7 million in state tax incentives for the 160 jobs to be created at two new wood pellet mills in Richmond and Sampson counties, Gov. Pat McCrory announced Tuesday.
Enviva is investing $214 million in the two mills to make wood pellets that will be shipped to customers in Europe from the state port at Wilmington. The company is expected this fall to start construction on a $35 million export facility at the port to handle 1 million tons of pellets per year.
The pellets are made from pulverized chips, using wood that Enviva characterizes as low-value leftovers from the harvest of sawmill timber. The United Kingdom and other European countries have created new markets for pellets from forests in the southeastern United States with subsidies aimed at replacing coal with other fuels for generating electric power.
Enviva “turns byproducts of saw timber harvests into renewable fuel that is in great demand around the world,” McCrory said in a news release. “By developing these projects, it plans to double the size of its operating footprint in North Carolina, and in doing so, will be creating good, sustainable jobs.”
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Enviva now has mills at Ahoskie and Garysburg in northeastern North Carolina, producing pellets that are loaded onto ships at Chesapeake, Va. The company is considering a new mill in South Carolina that also would use the Wilmington port.
Environmental activists have lobbied the U.K. government to end pellet subsidies, which are based on policies classifying pellets as renewable fuels that reduce greenhouse emissions.
Critics contend the opposite is true. By some measures, they say, burning wood is worse than burning coal. The Southern Environmental Law Center and the Dogwood Alliance have accused Enviva of using whole trees cut from wetland forests.
“If those subsidies no longer exist, it’s not going to be economically viable to export the wood pellets to Europe,” said Derb Carter of the Southern Environmental Law Center in Chapel Hill. “The industry has been a boom in the Southeast. We believe it’s going to be a bust. We think the state is making a bad investment on a short-term industry that really has no future.”
The state Job Development Investment Grant program will give Enviva up to 12 annual grants worth 59 percent of the state personal income tax withholdings from the new pellet mill jobs, worth up to $1.7 million. Local tax incentives also have been promised.
A second company, Raleigh-based Woodfuels North Carolina, is building an export facility at the state port in Morehead City to handle up to 600,000 tons of pellets per year.