The CO2 emissions released during the combustion of woody biomass from short rotation of plantations were recently captured by some plants during their growth process. Therefore, it is the very standard convention to assume that burning bio­mass generates zero GHG emissions. However, emissions from fertilizers use (NO) and management activities represent a net contribution to the stock of GHG in the atmosphere on a wide range. While considering the emissions from long-distance transport, it is not possible to count all the emissions from fertilizers or from other local management activities, because of the lack of reliable data and also the exact
information is not estimated yet. In this way, the biomass is exempted from any carbon-related taxes. This implies that a power plant that generates BECCS electricity receives a financial support which is equal to the value of the tax for capturing and storing CO2 and pays tax only on emissions from the international transport of woody biomass. The price of BECCS electricity is obtained by modifying Eq. 12.5 as follows:

= Jft.,,+JgTCD + sC“- (TCCS>

+ — + -(r + S)(p — ew — T + — gXD. T. (12.6)

Z h P P

BECCS power generation firms are eagerly willing to demand biomass subject to the optimality condition obligatory to Eq. 12.6. This states that, for a given price of electricity, the higher the tax is, the higher will be the price of biomass that they are willing to pay. The price of biomass increases with a proportional rate of carbon tax: dpF jdT = ew + y%D. This suggests that the regional social planner may be willing to pay a price higher than the global marginal cost of biomass production, if the global demand of biomass is exceeding the global maximum endowment. Even if the carbon tax increases the marginal production, the cost of biomass remains the same when there are limitations for production. However, the value of biomass increases with the carbon tax and thus BECCS firms are willing to pay a higher price in the international market as well. A firm in the forestry sector captures all the rent as overall hinders are done to the BECCS firms. This is a peculiar outcome of the non-cooperative interaction in the environment. According to different settings, with strategic coalition formation, a group of importing countries would have the incentive to form and motivate a cartel to extract a part of rents from the forestry sectors of exporting regions (Rose et al. 2012).