According to the language of the 2008 Farm Bill, which created BCAP, the purpose of the matching payment program is to support the development of a biomass supply chain by incenting landowners and operators to harvest, collect and deliver material considered “waste” to qualified biomass conversion facilities.

For the last three years, Forest2Market has spoken and written frequently that the largest structural and economic impediment to having a robust biomass supply chain is the logger adoption rate. Because little to no market exists for biomass and because this material has traditionally been left on the forest floor where it boosted soil quality, the majority of loggers do not have the equipment they need to collect and deliver biomass. We estimate that in most wood basins, the adoption rate is less than 10 percent.

In order to support the development of the biomass supply chain, loggers need to invest in expensive equipment, such as chip vans, grinders and balers. As the biomass market will not currently support the loan payments that loggers would have to make on this equipment, logging companies have decided not to make these investments.

Theoretically, BCAP incentives may have helped some operators pull the trigger on this investment earlier than they may have. We did, in fact, see loggers in the Pacific Northwest and the South buy grinders and chip vans. The evidence is anecdotal, however, and we saw no significant trends in this direction.

Mostly, those receiving the payments used them to prop up their bottom lines. (It is a fact universally acknowledged that the timing of the incentives couldn’t have been better, as the state of forest-related industries has been dismal and almost all involved in the forest products supply chain are under pressure.)

There was also an understandable amount of skepticism—for good reason, it turns out—that the incentives wouldn’t last long enough to support payments throughout the life of any loan. It is, and will continue to be, a wise decision not to base business plans on unpredictable government subsidies, incentives and tax credits, especially in this political environment.

In addition, the start-up time for adopting new equipment in the industry is 4-6 months from the time a decision is made to purchase until a crew is trained in the efficient use of the equipment. The BCAP program was in effect exactly 6 months. In many cases, this meant the program was suspended just as the first payments on the equipment loan were due.

In the final assessment of BCAP v1, very little progress was made toward establishing a long-term, robust supply chain for biomass.