Tag Archives: Enviva

Mongabay: Enviva bankruptcy fallout ripples through biomass industry, U.S. and EU

Tractor-trailers each loaded with 40 tons of wood chips waiting at Enviva’s pellet mill in Ahoskie, North Carolina, which opened in 2011. “There’s no way Enviva is coming out of Chapter 11, [bankruptcy]” a former Enviva employee and whistleblower told Mongabay. “Their manufacturing equipment is not fit for the service it’s required to deliver. Only two of its 10 plants (one in Florida, one in Georgia, neither built by Enviva) are hitting their maximum achievable targets for pellet production.” Image courtesy of Bobby Amoroso.

In this story, I continue my coverage of Enviva, the Maryland-based company that claims to be the world’s largest producer of wood pellets for industrial-scale energy. The pellet maker has been a dominant force in the industry in the Southeastern United States, especially my home state of North Carolina, since it opened its first pellet mill more than a decade ago. A couple of years ago, it topped $1 billion in annual revenue, its stock price rising above $87 a share. Enviva boldly planned major expansions in the Deep South and predicted pellet production to go from 6 million metric tons annually to 13 million metric tons by 2027.

That was then.

In the spring of 2024, Enviva found itself in Chapter 11 bankruptcy, having lost hundreds of millions of dollars in 2023 from a variety of circumstances — some beyond its control, many of its own making. It’s stock price is below 50 cents a share and Wall Street analysts, once bullish on forest biomass energy, are now warning investors away. This story continues my explanation of why Enviva is failing, with additional insight from an exclusive source who continues to provide an invaluable look beyond Enviva’s public statements and required disclosures as a public company.

A new angle to my coverage is how forest advocates have been shifting their attention to Washington, D.C., because of the Biden Administration’s Inflation Reduction Act and the billions provided to incentivize renewable energy. Enviva, in desperation, is eager to convince the Environmental Protection Agency and other government offices, that is produces an legit renewable energy source and climate mitigation strategy amid the climate crisis. No rigorous, independent research supports that claim in the timeframes needed to slow the rate of global warming. But Enviva is angling for millions in US tax subsidies to help it pay for new plants in Alabama and Mississippi.

As my story explains, there is a lot at stake not only in Enviva’s future as a major supplier of wood pellets to the UK and EU, but also the future of forests desperately needed to remain standing as yet our best and most effective defense against erratic weather and accelerating global warming.

Mongabay: Study — Burning wood pellets for energy endangers local communities’ health

This wood pellet manufacturing plant in Ahoskie, North Carolina was Enviva’s first in the state, opening in 2011. Wood feedstock – pine and hardwood – arrives at the plant already chipped from native forests within a 50-mile radius of the plant. The chips are dried and then pressed into pellets. According to a new study in Renewable Energy, wood pellet production emits more than 55 hazardous air pollutants, along with tons of volatile organic compounds and particulate matter. Many of the pollutants can be harmful to human health. Image by Justin Catanoso.

The interesting thing about the facts that are the heart of this story of mine: it all sounds so familiar. Burning forest biomass causes enormous amount of emissions and hazardous pollutants from both the manufacturing process and the burning-for-energy process? Don’t we know this already?

Well, yes and no. Forest and public health advocates have been decrying for as long as I’ve been covering this issue the harmful impacts from every process that is the wood pellet industry — from clearcutting native forests that reduce carbon sinks and degrade biodiversity, to emissions from drying wood before its pressed into pellets, to pollution from the transportation sector to move pellets from one place to another, and finally, enormous emissions from burning these pellets instead of coal.

Because so much is assumed — and obvious (like the obvious health hazards of smoking cigarettes for years) — we assume, too, that there are rigorous scientific studies that prove what so many assume. This may be true in Europe, but it has not been true in the United States — until the 2023 publication of the study that is focus of my story.

This research is enormously important given the growth of the wood pellet industry and the growing interest across the United States to start burning wood for energy and claim — erroneously — that it’s a legitimate climate solution. There is no legitimate science that supports that industry claim. I am glad Mongabay continues to cover this issue closely. Sadly, this important study was not covered by any other news media.

Mongabay: Enviva, the world’s largest biomass energy company, is near collapse. Here’s why.

Forest biomass protestors outside Enviva’s Raleigh, North Carolina, offices. Across the UK, EU and Japan, forest campaigners have consistently protested the local and global impact of the world’s largest producer of forest biomass — wood pellets — for industrial-scale burning in former coal-fired power plants. Ultimately, the company’s own grave operational problem at its plants appear to be behind its financial collapse. Image by Kimala Luna courtesy of the Dogwood Alliance.

I was in the air on a Delta flight to Bozeman, Montana, on November 9, 2023, when I received a text message from a source: Enviva‘s stock was collapsing and the company had warned in a financial disclosure what it “may not be able to continue as a going concern.” I didn’t exactly see this coming, but ultimately, having written in May about Enviva’s unexpected financial tanking in the first quarter, I wasn’t fully surprised.

As I read the breaking news coverage from the environmental and business press about the near fall of the world’s largest producer of wood pellets for industrial-scale burning for energy instead of coal, I saw an enormous gap — even in The Wall Street Journal. All the stories recited the staggering losses and the new, interim CEO’s positive spin on a desperate situation. But none of the stories could explain why a billion-dollar company with long-term contracts around the world, and where demand for pellets is at a record high, had lost more than $250 million this year and exhausted a $570 million line of credit.

That’s the only story I wanted to write, and it’s linked here. Enviva’s travails are acknowledged — in carefully shrouded accounting language — in its public filings with the Securities and Exchange Commission. But I am fortunate to have as a source a former Enviva maintenance manager at two of its 10 Southeastern US mills. I interviewed him once I got settled in Montana and again when I returned to North Carolina. Based solely on his experience at Enviva over two years — 2020-20222 — he was able to explain the plausible whys and hows behind the staggering losses. This source, still unnamed for reasons of privacy and security, was my whistleblower in December 2022 in a story that reverberated globally.

This story quickly attracted international attention, too. In fact, it ranked as the No. 1 best-read story on the Mongabay website in November with more than 85,000 readers; that’s a lot. Better still, by year-end, my report made the list of 10 Most Read Stories of 2023, ranking sixth. As yet, though, it’s not clear yet what the ultimate ramifications of this downfall will be on the highly subsidized global market for forest biomass and the countries that have come to rely on this scientifically denounced form of energy in a climate crisis.

Enviva’s stock collapse this year: The company’s stock was trading above $51 per share on January 13, 2023, and gradually slid to half that until the May 3 plunge. It dived again on November 9, bottoming out at 62 cents per share that day, and has not recovered much value since. It is now trading as a penny stock. Source: November 16 end of day trading screenshot from Google.com.

Coastline on WHQR: Justin Catanoso on the Enviva crisis, wood pellet industry, and why environmental reporting doesn’t always have two equal sides

In the spring of 2019, investigators tracked logging trucks coming from a mature hardwood forest and going to Enviva’s Northampton, NC, facility. The clear-cut, seen here, was located in the Tar-Pamlico River Basin, alongside Sandy Creek, feeding into the Pamlico Sound of North Carolina. Photo: the Dogwood Alliance

Radio journalist Rachel Lewis Hilburn, host of Coastline, a weekly program on WHQR public radio in Wilmington, North Carolina, had been following my coverage of the wood pellet industry over the past year. Of particular interest were the stories that focused on Enviva, the world’s largest producer of wood pellets, which has four manufacturing plants in eastern North Carolina.

When we spoke by phone to discuss her program, she was not only interested in my coverage, but also my reporting process, my working with a key anonymous whistleblower who once worked for Enviva, the distinction between environmental journalism and environmental advocacy, and what lessons I share with my journalism students at Wake Forest University.

Here’s the result, a wide-ranging, live-to-tape 50-minute discussion in three segments in which Rachel’s innate curiosity and enthusiastic interviewing style directed me through all of those issues and a few more. I really appreciated the opportunity to talk with her and her listeners. Thanks also to producer George Newman at WFDD on the Wake Forest campus for preparing the studio in which I spoke remotely with Rachel.

Mongabay: Financial downturn at Enviva could mean trouble for biomass energy

2023 is shaping up to be an all-time worst financially for the world’s largest maker of wood pellets for bioenergy, Enviva. In this photo, taken in December 2022 at Enviva’s smallest plant in Ahoskie, NC., trucks pull into the mill all day long, every day, to unload 40 tons of chipped wood from nearby forests to be pressed into wood pellets for export. Photo by Justin Catanoso

In this story, I write an unusual piece for Mongabay, but historically, a pretty common one for me — an analysis of a company in financial trouble. Mongabay doesn’t do many business stories. But when it is the business of the world’s largest maker of wood pellets for bioenergy serving the United Kingdom, European Union and Japan, this former business editor was eager to do the reporting.

Enviva is not only in financial trouble, with its once high-flying stock price in freefall, it is also facing legal jeopardy. In April, a class-action lawsuit was filed in the company’s home state of Maryland alleging Enviva has harmed its investors by mispresenting its sustainability credentials and long-term business viability. Reporting from my whistleblower story in December 2022 is cited in the lawsuit; the suit notes that Enviva’s stock dropped more than 9% after my Mongabay story posted.

Enviva has predicted that it intends to increase production from its 10+ pellet mills in the US Southeast from 6 million tons annually to 13 million tons by 2027. That growth — which will dramatically add to deforestation in a region prone to climate-related weather impacts where intact forests help cushion the blows — is now in question.

WFAE-Charlotte/Charlotte Talks: Inside North Carolina’s wood pellet industry

*Enviva’s smallest wood-pellet mill of four in North Carolina, this one in Ahoskie near the coast. Photo courtesy the Dogwood Alliance.*

David Boraks, a talented environmental reporter for WFAE-Charlotte, the second-largest public radio station in North Carolina (reaching lots of South Carolina), contacted me in December after my Mongabay story regarding the Enviva whistleblower. He, too, has covered Enviva and its impact on communities and the environment in the poor counties where it operates, four out of 10 of which are in North Carolina.

David invited me to join him in a detailed discussion on the popular noontime news program Charlotte Talks. We discussed the wood pellet industry, its impact on the Southeastern US and the policies overseas that enable this controversial energy source to keep proliferating.

As Derb Carter, a lawyer with the Southern Environmental Law Center, told Boraks: “What’s happening in North Carolina is the forests are being cut and exported to Europe. None of that is used to produce anything benefiting North Carolina in any way. And you’re losing that carbon storage in the forest.”

Mongabay: The EU banned Russian wood pellet imports; South Korea took them all

The Samcheonpo power plant in South Korea co-fires with coal and woody biomass, allowing it to claim it is reducing emissions under a carbon accounting loophole. Image courtesy of Solutions for Our Climate.

This story, my first of 2023, came from NGO sources I developed in Spring 2022 when writing about the explosive growth of woody biomass for energy in Japan and South Korea. At the time, Russia’s unprovoked and devastating war with Ukraine was just starting and Europe was still importing tons of wood pellets from Russia, providing billions of dollars to the Russian war effort.

NATO countries decided in July to ban Russian imports as part of escalating sanctions. Little known at the time, but revealed in late December by three different organizations, South Korea — ignoring its Western allies — took advantage of the Russian surplus and allegedly took all the pellets Russia would ship. NGOs is South Korea, Europe and the United States are livid, as my story explains. Moreover, it appears Russia has figured out how to get around the European ban by laundering its pellets through neighboring countries. All to help pay for the most egregious war crimes in Europe since World War II.

As my source in South Korea told me: “We are deeply ashamed that our government is allowing the purchase of products associated with both a humanitarian and climate crisis…”

Sea Change Radio: Wood Pellets – The New Coal

My December stories on the wood pellets industry, from the Enviva whistleblower to the policy changes in The Netherlands and Australia, have attracted attention from other journalists, including those working in Denmark, Germany, and the U.S. My colleague Erik Hoffner knows radio host Alex Wise, with Sea Change Radio in the Bay Area of California. Wise was eager to talk with me about my December coverage on his program, which focuses on issues related to climate change and sustainability.

Here’s our interview. Included midway is a fabulous Hank Williams song Settin’ the Wood s on Fire, which adds a little levity to an otherwise serious set of issues. Sea Change Radio is carried weekly on more than 80 radio stations coast to coast in the U.S. and up into Alaska.

Mongabay: The Netherlands to stop paying subsidies to ‘untruthful’ biomass firms

A view of an Edenton North Carolina forest clear-cut photographed in November 2022. A logger on site told Mongabay that roughly half of the trees cut there and chipped were destined for a nearby Enviva wood pellet plant. Enviva exports large amounts of wood pellets to the UK, EU and elsewhere. The firm makes extensive green claims. Image courtesy of Bobby Amoroso.

Cause and effect. That’s something journalists covering controversial topics hope for — that our dogged reporting will come to more than praise or complaints from readers, that it might actually have a more tangible impact. About two weeks after my exclusive whistleblower story was published, this story illustrates a clear cause and effect, a tangible impact from my reporting.

On December 14, a liberal Dutch politician from Amsterdam cited specific details from the Enviva whistleblower story as the motivation behind a motion, approved 150-114, to compel the Dutch government to stop paying subsidies to wood-pellet manufacturers found to be untruthful in their wood-harvesting practices. Accountability journalism is a large part of what has motivated me throughout my career, and here at the end of 2022, it is bearing fruit in a way that happens all too rarely.

What this all means for wood pellet producers and energy companies that depend on wood pellets to generate energy as they phase out coal (not an environmentally or climate-friendly swap, scientists tell me) should become clearer in 2023. It is a story I will continue to cover.

Meanwhile, in what amounted to a fabulous gift on Christmas Eve, Bill McKibben, writer, author, educator and one of the leading and loudest US voices in global environmentalism, devoted his last Substack newsletter of the year to my reporting in December 2022. McKibben also promoted my stories out to his vast audience on Twitter, which resulted in an additional enormous response and engagement beyond what we were already seeing with Mongabay’s coordinated social media postings by colleague Erik Hoffner.

*Illustration with Bill McKibben’s newsletter under the headline: A little Xmas cheer for trees/ Biomass burning has a bad week*

Mongabay exclusive — Whistleblower: Enviva claim of ‘being good for the planet… all nonsense’

Two weeks before this photo was taken in Edenton, North Carolina, a small town in the state’s coastal plain, this 52-acre site was a densely wooded, biodiverse forest. It was clear cut in part to feed Enviva’s nonstop, bottomless demand for trees for wood pellets in the US Southeast. Enviva says this is a climate-friendly solution to energy production; the world’s top forest ecologists argue otherwise.

This story — the first of its kind ever written about the global biomass industry — started with an email in spring 2022 forwarded to me through the Mongabay web site. A well-placed source at Enviva, the world’s largest producer of wood pellets for industral-scale energy, wanted to talk. “I’m sick of the lies,” he wrote.

Over the course of the next several months, the source and I spoke many times at length. He shared with me his unique and powerful insider view of a company that claims one set of principles and priorities to the public, to regulators and to investors when it comes to wood harvests, and by all appearances, largely does the opposite.

To verify much of what this source was telling me over the summer and fall, I traveled to Edenton in eastern North Carolina in November 2022 with my friend and colleague Bobby Amoroso to observe a clear cut taking place on 52 acres of city-owned land. There I witnessed illustrations of Enviva’s apparent double talk about sustainable wood harvesting.

With the expert production work of Sandy Watt in London, we produced this YouTube video to summarize and complement my exclusive report for Mongabay.

The reporting for this story was extensive. It was also full, fair and thorough. I spent nearly 30 minutes on the phone with an Enviva communications staffer and explained to her, in detail, the story I was preparing and the reporting I had completed. Enviva chose to respond in writing. But I went further. I researched Enviva’s web site to show the message it puts out to the public. I interviewed an independent forester who believes, on balance, that Enviva is replacing demand for wood in eastern North Carolina, not increasing demand. I ignored allegations made against the company that I could not adequately verify to my own professionals standards. And I also made compelling use of a new study by the Southern Environmental Law Center that for the first time quantifies Enviva’s growing impact on forest cover within the wide harvest area of three wood-pellet mills in eastern NC and southern Virginia.

Why is this story important? Intact forests are the best and most effective planetary means we have of slowing the rate of global warming and mitigating the impact of climate change. The second-most important thing we can do is reduce carbon emissions from energy production. Science shows that the global biomass industry undermines both of these vital goals, and it will only get worse as pellet demand continues to grow in the UK, EU and Asia.

If you are new to the issue of biomass for energy and the controversy that has surrounded this growing industry for a decade, I encourage you to read this story and watch the video. A special thanks to Gizmodo for reporting on my story and Yahoo News for spreading it farther and wider. And thanks also to the Pulitzer Center in Washington, D.C., which has sponsored some previous wood pellet reporting of mine, for including this story and others in its December newsletter.

Mongabay also had my story translated into German. That link is here.