World’s largest biomass wood pellet producer files for bankruptcy

Enviva, which operates polluting pellet plants across the South, made the announcement after months of financial problems.

CHAPEL HILL, N.C. — This week, Enviva, the world’s largest producer of biomass wood pellets, declared Chapter 11 bankruptcy. The move comes after a months-long financial crisis that saw Enviva’s stock price fall by more than 90 percent, leading to warnings that the company could soon be delisted from the New York Stock Exchange.

“Enviva’s financial collapse demonstrates what we have argued for years: the biomass energy industry is not financially viable,” Heather Hillaker, a senior attorney at the Southern Environmental Law Center, said. “Enviva’s bankruptcy wasn’t caused by just one or two bad contracts, it’s because of a failing industry model that pollutes communities, hurts the climate, and is dependent on government handouts.”

Enviva and other wood pellet manufacturers, use trees from Southern forests, turn them into pellets, and ship them overseas where they are burned for power at utility scale. Biomass energy companies falsely claim burning trees for electricity is a clean energy source – in reality, the process emits more climate-warming carbon than burning coal.

Enviva operates ten pellet plants in the southeastern U.S. and has proposed two more. Wood pellet facilities release huge amounts of air pollution, dust, and fine particulates that can cause asthma and respiratory illnesses in nearby communities. Often times, these are communities of color that are already overburdened with industrial pollution. Enviva’s facilities have frequently violated regulations, making them even more dangerous for nearby communities. The company has been assessed tens of thousands of dollars in fines in recent years for violating permits. 

The bankruptcy announcement comes as Enviva is attempting to get millions of dollars of public money through clean energy tax breaks created by recent federal climate legislation.

“Enviva’s bankruptcy makes it even more clear that the U.S. should not waste taxpayer dollars on the polluting and failing biomass industry,” Hillaker said. “Betting on biomass is a bad investment, plain and simple.”

The financial crisis is due in part to Enviva being forced to internalize the environmental costs of its dirty operations, rather than pushing them off onto nearby communities. SELC, along with community partners across the region, have scored major victories against Enviva and other pellet companies, forcing them to install pollution controls and better protect people living close by.