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Active Energy selling Lumberton wood pellet site

CoalSwitch pellets (Photo: Allenby Capital)

Active Energy Group is selling its failed wood pellet facility in Lumberton to Phoenix Investors, a Wisconsin-based commercial real estate firm, according to a press release issued today.

Proceeds from the sale will be used for the development of Active Energy’s commercial production facility in Ashland, Maine. Phoenix Investors is a commercial real estate firm focused on the revitalization of former manufacturing facilities throughout the United States.

Active Energy had purchased the former Alamac American Knits factory in 2019. The company had been awarded a $500,000 building reuse grant from the NC Department of Commerce. However, that money has not been disbursed. The funds will revert to the department’s Rural Economic Development Division.

Active Energy planned to manufacture CoalSwitch wood pellets, heralded as a “game changer” for utilities. The technology creates a wood pellet — made from timber largely cut in southeastern North Carolina — that can be burned alongside coal or as a standalone fuel in traditional power plants with no loss of heat.  Utilities that use CoalSwitch pellets wouldn’t have to spend millions of dollars to retrofit their facilities. And because the manufacturing process uses steam to explode the pellets to remove some contaminants, they burn cleaner at the power plant than coal.

However, the manufacturing process for wood pellets emits significant air pollution. Those emissions prompted many Lumberton residents to oppose the plant, which is located in a predominantly Native American community.

So far, the plant has never made a single pellet for sale in North Carolina. In 2021, the company altered its engineering plans and emissions estimates without permission from the state, in violation of its air permit. The company never refiled its application.

Facing a deadline to fulfill a contract for the pellets, Active Energy moved some of its pellet operations to Maine. But that plant shut down last fall because of an irreparable equipment failure.

The company also closed its sawmill business at the Lumberton site.

Active Energy has faced other legal action. The Southern Environmental Law Center threatened to sue the company earlier this year for allegedly discharging high levels of toxic PFAS into the Lumber River, a drinking water supply for 25,000 people in Robeson County. The company is also allegedly discharging the compounds into Jacob Branch, a tributary of the Lumber River. 

Active Energy did not produce the PFAS, also known as perfluorinated and polyfluoroalkyl compounds, but SELC alleges that the company has run afoul of the Clean Water Act, since 2019, when it purchased the property on Alamac Road in Lumberton. The Clean Water Act prohibits facility owners from discharging any pollutants — including PFAS — from their property into rivers and streams without a federal permit. Active Energy’s outdated permit does not include PFAS in the list of pollutants that can be discharged.

“AEG has a singular focus right now on accelerating commercial production to meet the increasing interest in and demand for CoalSwitch,” said Michael Rowan, CEO of Active Energy Group. “We are completing engineering and design activities and have initiated permitting for the Ashland Facility. Bringing that facility online offers us not only the chance to produce and sell CoalSwitch, but also to obtain the critical operational data that will further demonstrate the fuel’s benefits and accelerate the permitting process in other locations across the U.S.”

“We appreciate the support we have received from the community and its leaders in Lumberton and Robeson County,” said Rowan. “We still believe there is significant opportunity for CoalSwitch in the region and look forward to future collaboration with the state.”

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Active Energy selling Lumberton wood pellet site