An energy company that uses poultry waste for fuel can't qualify as a green energy resource under North Carolina's law.

The ruling by the N.C. Utilities Commission means that Peregrine Biomass Development will have to scrap plans to build several industrial boilers that burn chicken droppings as an energy source to make steam and hot water for factories and other industrial applications.

The development is a major setback to the use of farm animal waste as a green energy resource, some believe.

"We just haven't had other viable proposals for poultry waste," said James McLawhorn, director of the electric division at the Public Staff, the state's consumer advocacy agency.