Property Types

Biomass Plants

Biomass is renewable organic material that comes from plants and animals. A biomass plant converts biomass to energy through various processes, which include direct combustion to produce heat, controlled heating or oxidation to produce fuels in various forms, chemical conversion to produce liquid fuels, and biological conversion to produce liquid and gaseous fuels. Biomass plants face many environmental risks through their daily operations, use, and storage of chemicals and wastes generated. They may store materials and wastes that could contaminate the environment if spilled or released. They also may generate wastewater and stormwater run-off that can contain pollutants, which could impact the environment. Furthermore, these facilities can generate significant air emissions, which can pollute the environment and affect the health of third parties.

Download PDF

Environmental Exposures May Include:

Bulk Tanks
Chemicals, Lubricants, and Waste Hazards
Equipment Operations and Fluid Leaks
Stormwater Run-off
Air Emissions and Regulatory Compliance
Flammable Gas Releases and Explosion Hazards
Wastewater Management and Disposal
Hazardous Waste Generation and Disposal
Ash-Based Byproducts
Fire Hazards and Fire Water Run-off
Odor Emissions
Liquid and Gaseous Fuel

Bulk Tanks

Chemicals, oils, and fuels may be present in biomass plants. These will likely be stored in bulk tanks, such as aboveground or underground storage tanks. Tanks present an elevated risk for a release during storage, loading, or unloading operations. Releases associated with tanks can impact soil or groundwater, migrate to adjacent properties, or enter storm or sewer drains. Cleanup, natural resource damage, or third-party bodily injury or property damage claims can result.

Chemicals, Lubricants, and Waste Hazards

Chemicals, lubricants, oils, fuels, and wastes may also be stored in smaller containers such as totes or drums. Spills or releases during storage, use, loading, or unloading can occur, resulting in cleanup, natural resource damage, or third-party bodily injury or property damage claims.

Equipment Operations and Fluid Leaks

Equipment present at biomass plants to process, handle and move incoming wastes may include shredding equipment, forklifts, conveyors, trucks, etc. Petroleum-based fluids, including diesel fuels, hydraulic fluids, cleaners, and coolants, may leak or spill from equipment and vehicles during use, maintenance, or fueling. A release can contaminate soil or groundwater or migrate to storm or sewer drains.

Stormwater Run-off

Sources of biomass materials, including wood, wood processing wastes, crops, etc., may be stockpiled outside. Additionally, chemicals, debris, fueling areas, wastes, and other outside storage of materials may occur at biomass plants. Stormwater can come into contact with these outside areas and collect contaminants. If stormwater run-off is not properly controlled, contained, or pre-treated before discharge to surface water, sanitary systems, or storm drains, it can pollute soil, groundwater, or surface water. Human health, wildlife, and the environment can be adversely impacted.

Air Emissions and Regulatory Compliance

Biomass facilities produce air emissions, including particulates, nitrogen oxides, carbon monoxide, and other hazardous air pollutants. These constituents can contribute to acid rain and climate change. Improper controls or malfunctioning equipment can cause emissions to exceed permit limits and cause regulatory violations. Air emissions can pose health hazards to third parties.

Flammable Gas Releases and Explosion Hazards

Depending on the biomass conversion process at a facility, gaseous fuels, such as hydrogen, methane, renewable natural gas, or synthesis gas, may be produced. If these gaseous fuels are accidentally released into confined spaces, they can act as an asphyxiant to occupants. Also, since these gases are flammable, leaks increase the possibility of a fire or explosion. Accidental releases could injure third parties.

Wastewater Management and Disposal

Wastewater may be generated from biomass processes or cleaning equipment, or trucks. Wastewater may be discharged to a sanitary sewer, treated with an on-site treatment system, or collected for treatment off-site. Exceedances of sewer discharge criteria may result in regulatory violations and fines. Leaks and spills could occur during storage, treatment, or loading/unloading of wastewater, resulting in environmental impacts. Improper disposal of wastewater could also lead to tort liability.

Hazardous Waste Generation and Disposal

Wastes are generated from biomass facilities. Combustion plants generate ash and slag containing metals such as copper, chromium, and arsenic from preservatives in treated wood and dioxins. Additionally, waste oils and other regulated or hazardous wastes may be generated from these facilities. Improper disposal or handling of wastes could lead to environmental liability, civil fines, or legal consequences. Additionally, biomass facilities can have tort liability for releases at third-party disposal facilities where they send their wastes.

Ash-Based Byproducts

Ash generated from biomass facilities may be utilized in landfill cover, in road construction, as a soil amendment, or for concrete. Using the ash in these sources could create a product’s pollution liability exposure.

Fire Hazards and Fire Water Run-off

Biomass plants face the risk of fire from several sources. Fuel sources such as wood products, sawdust, and other biomass plant fuel sources may be stored in piles, waiting for transport or use, and fires can occur due to oxidation and spontaneous combustion within the piles. Wood pellets, chips, or other refuse can also break into combustible dust. Handling and storing flammable or combustible gases and liquids can also increase the fire risk. Extinguishing fires can produce fire water run-off contaminated with pollutants that can impact soils, groundwater, or surface waters. Additionally, smoke and dust can be generated from firefighting that can be a nuisance or irritant to neighboring properties and result in claims for third-party bodily injury.

Odor Emissions

Biomass plants may generate odors from the burning of wastes or other processes. Third-party nuisance claims can result from odors, considered “pollutants,” in many cases in the courts.

Liquid and Gaseous Fuel

Some biomass facilities generate liquid and gaseous fuels. Use, failure, or defects associated with these products may result in product pollution liability, including bodily injury, property damage, or cleanup liability.

Contractors Pollution Liability Can Provide Coverage For

Integrated GL/site pollution and options to include excess, auto, and workers’ comp may be available

Monoline site pollution liability

Third-party claims for bodily injury and property damage

First-party and third-party cleanup

Both sudden and gradual pollution conditions

Defense of third-party claims

Emergency response costs

Natural resource damage

First and third-party transportation pollution liability

Loading and unloading

Products pollution liability

Business interruption resulting from pollution conditions

Aboveground and underground storage tanks

Non-owned disposal sites

Civil fines and penalties

Mold, legionella, and more

Illicit abandonment

Claims Scenarios & Examples

A biomass plant had numerous violations of its air permit for carbon monoxide, nitrogen oxide, and particulate levels. These violations resulted in settlements, consent decrees, and over $1.4 million in fines. The most recent settlement required the company to install new equipment and repair existing equipment on boilers to reduce emissions, estimated to cost the company $800,000. Approximately 100 residents in the area also sued the company for bodily injury.
A large fire occurred at a biomass plant resulting in clouds of black smoke and ash covering neighboring properties. A group of neighbors sued the biomass plant owner, claiming respiratory difficulties, malodorous smells, and falling debris prevented them from using and enjoying their property, including their outdoor spaces.
A waste-to-energy plant converted biomass to biogas. A malfunction at the facility resulted in 80,000 gallons of biomass overflowing the digesters. An investigation by the Environmental Protection Agency (EPA) also determined that this release resulted in air concentrations of methane at flammable levels and hydrogen sulfide in amounts that were dangerous for humans. The facility paid a $1.1 million civil penalty under a settlement agreement with EPA and the state environmental department for violations found during a subsequent investigation and significant cleanup costs.
A facility produced biodiesel stored in a large aboveground storage tank. A hose detached from the tank, and 30,000 gallons of fuel were released into the tank farm’s secondary containment. The spill occurred during the night and was not discovered until the next morning. The fuel impacted a number of geese that had flown into the spill area, and a wildlife rescue company had to assist with capturing and treating the geese. The biomass plant was responsible for the costs of the fuel cleanup and the treatment of the geese.
A biomass plant that converts wood waste to energy uses wastewater to clean its boilers at the power plant. It had an on-site wastewater treatment tank that failed, spilling an unknown amount of wastewater that migrated to an adjacent creek. Cleanup costs and civil fines due to the discharge exceeded $500,000.
A biomass boiler house had a carbon monoxide buildup but did not have carbon monoxide detector systems. A third-party millwright contractor was setting a new piece of equipment in the boiler house when he was overcome by carbon monoxide poisoning. The family of the millwright contractor sued the owner of the biomass plant.
Several residents in the area of a wood-fired biomass plant complained of odors and dust produced by the plant that gave them respiratory issues. The group filed a class-action lawsuit against the facility for nuisance and bodily injury related to the releases.

Final Consideration

Your business can be faced with the cost to defend itself against allegations or legal action from pollution related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with environmental claims handling expertise.

Download PDF
This environmental risk overview offers a general understanding of potential risks and may not reflect all risks associated with your business. Environmental Risk Professionals has compiled this overview for informational purposes only. This overview does not constitute legal opinion or advice, nor does it establish a consultant-client relationship. This overview is not intended to guide project parties in interpreting specific contracts or resolving disputes; such decisions may require consultation with counsel and depend on various factors. © 2025 Environmental Risk Professionals, LLC