BCAP Final Rule Released: Overview

From the November 2010 Forest2Mill newsletter.

On October 22, the final rule describing the long-term implementation of the Biomass Crop Assistance Program, including both the Collection, Harvest, Storage and Transportation (CHST) matching payment program and the Establishment and Annual Payments Program (EAP), were released.

Under the new rules, program costs are expected to total $461 million from 2011-2026. The financial arm of the USDA, the Commodity Credit Corporation (CCC), expects to spend $61 million on establishment payments, $4 million on annual payments, $132 million on matching payments and $3 million on technical assistance, for a total of $200 million in 2011. In 2012, the CCC expects to spend $61 million on establishment payments, $6 million on annual payments, $132 million on matching payments and $3 million on technical assistance, for a total of $202 million. An additional $61 million will be spent on annual payments from 2013-2026.

The final rule leaves many questions unanswered, especially those surrounding how the new rules will be administered and implemented. Here are a few of the most pressing:

• When will the eligible materials list be published?
• When will the application materials be available?
• When will payments begin?

As the supporting documents are released by the FSA, we will continue to report further clarifications and developments.

Framework for New Rules

The final rule sets out a list of goals and principles governing the program going forward. These goals focus on new markets while protecting established markets:

• New Energy Crop Feedstocks: BCAP will reduce the financial risk of producers who support emerging biofuels markets. Crops include, but are not limited to, switchgrass, miscanthus, fast-growing woody poplar, jatropha, algae, energy cane, and pongamia. 
  
• Ensures additional production:
  • Promotes the cultivation of new biomass for new purposes.
  • Doesn't penalize existing users of biomass for heat and power.
  • Disallows windfalls or undue financial gains for producers seeking payment for using their own waste products in existing conversion practices.
    
• Kick-starts liquid cellulosic biofuels to meet Renewable Fuel Standard targets:
  BCAP provides bonus incentives for the cultivation of cellulosic biofuels that have 60 percent lower lifecycle greenhouse gas emissions.
  
• Protects existing markets:
  The USDA will determine if a local market exists for specific materials, and if so, will disqualify that material to protect existing markets.