B. A New Tax Regime
The second solution requires the development and implementation of a new federal tax regime surrounding turbine construction and waste management.
In the first stage, a “recycling tax” would be imposed on blade purchases. Revenue from the tax would be directed to the DOE’s National Renewable Energy Laboratory (NREL) to collaborate with industry actors on materials research. Research and innovation efforts are already underway at the NREL, where engineers are experimenting with a recyclable thermoplastic resin material. Additional resources could serve an important role in accelerating this research, or to assist the NREL in adopting and replicating the composite recycling technology recently unveiled by turbine manufacturer Vestas.
The proposed tax would also serve the important role of funding technology and market development for the handling of conventional wind blades. The use of recycling technologies is cost effective only if the value of the reclaimed material is greater than the cost of the recycling process. Therefore, research and innovation focus is needed not only to develop these technologies on a commercial scale, but also to identify suitable markets for the recycled material.
Finally, the tax revenue would fund research to determine where waste material is concentrated to ensure a steady stream of composite feedstock. Facility location is particularly critical to reducing transportation distances, which currently stand as the highest cost in blade processing and handling. Moreover, transportation distance can also affect the environmental suitability of recycling, as transportation over shorter distances will reduce fuel consumption.
In the second stage, once recycling or recovery facilities are available on a commercial scale, the tax code could be used again to provide incentives for wind farm owners to choose blade recovery over disposal. Since the 1970s, policy makers have used the tax code to support diverse energy policy objectives with incentives like the production tax credit (PTC). Similar to the PTC, which rewards a per-kilowatt-hour tax credit for electricity generated from renewable sources, the second stage of the proposed tax regime could reward credits to operators based on the amount of blade waste recycled rather than landfilled. These tax credits would act as a subsidy to make recycling and recovery preferable to solid waste disposal.