New Rules Governing the BCAP Matching Payments Program
Posted on November 02, 2010 by Suz-Anne Kinney
In order to control program costs and solidify the supply chain for new and additional sources of biomass, the new rules for the Collection, Harvest, Storage and Transportation (CHST) matching payments program give precedence to biomass crops grown in the project areas as defined in BCAP's Establishment and Annual Payment (EAP) program (see accompanying story for details).
The new rule makes a distinction between “contract land,” or land that is under EAP contract, and “non-contract land.” These new energy crops must meet just two requirements in order to be eligible for matching payments. According to the new provisions, wood or wood waste originating on contract acreage must be:
Harvested and collected directly from the land. If separated from a higher-value product, the material must be separated at the harvest site and prior to being transported and delivered directly from the land to a biomass conversion facility. (This rule is designed to stop matching payments for companies that use their own waste products, such as the bark separated from pulpwood prior to the pulping process and sawmill residues.)
Harvested in compliance with an approved conservation, stewardship or equivalent plan (to be certified by the eligible material owner).
The rules are stricter for non-contract acreage. In addition to the two requirements outlined above, materials originating on non-contract acreage must meet these requirements:
For forest biomass harvested from non-contract acreage, payments will not be authorized if the material has been diverted from local, higher value, markets. Higher value products include, but are not limited to, “mulch, fiberboard, nursery media, lumber, or paper, or a product manufactured from eligible materials from which eligible materials must be separated in order to be used for energy production.” (This will be determined by the Commodity Credit Corporation (CCC), which is the financial arm of the USDA.)
And, if the materials are not crop residues, they must be byproducts of preventive treatments that are removed to reduce hazardous fuels, to reduce or contain disease or insect infestation or to restore ecosystem health (to be certified by the biomass conversion facility).
Biomass from federal lands must meet three criteria. Materials, pre-commercial thinning and invasive species are eligible if they:
Are byproducts of preventive treatments that are removed to reduce hazardous fuels, to reduce or contain disease or insect infestation or to resort ecosystem health.
Would not otherwise be used for higher-value products.
Are harvested in accordance with applicable law and land management plans for old-growth maintenance, restoration and management.
Payments and Time Limits
The rules governing payment rates and time limits remain the same. Matching payments will continue at the $45/dry ton rate. (Biomass conversion facilities will be required, however, to have the technology to measure the moisture content of biomass.) Payments will be available for two years per producer. The time elapsed between the date of the last payment received under the initial rule and the date of the first payment received under the final rule will not be counted against this two-year eligibility period.