So Far, So Good

Initial perspectives on BCAP final rule seem positive.
By | November 23, 2010

While it’s likely that many are still sifting through the 170-plus pages of the Biomass Crop Assistance Program final rule, the initial consensus is that most relevant industry groups are satisfied with changes made to the program since it was implemented early this year.

The final rule comes eight months after USDA froze the program to correct several oversights that were realized after initial implementation, including the inclusion of wood scraps, sawdust, chips and shavings as eligible materials for the matching payments portion of BCAP. As a result, material prices for already-established markets, such as particleboard, fiberboard and composite panel sectors, were artificially inflated.

Tom Julia, president of the Composite Panel Association—the industry umbrella group that heavily advocated for the suspension of payments from BCAP until the issue was resolved—says BCAP has “morphed from a job killing welfare program to one that now makes economic and environmental sense. It’s now rightly targeted to the production of new sources of woody biomass, rather than raiding established, viable markets for the wood fiber upon which a wide range of American industries rely,” he says.

The CPA also endorses the decision that in order to qualify for matching payments, eligible materials must be collected or harvested directly from the land before transport and delivery, as opposed to being separated from higher value material after harvest and transport. In addition, all eligible material must be harvested in accordance with an approved conservation, forest stewardship or equivalent plan.

Bob Cleaves, president and CEO of the Biomass Power Association, describes the rule as “incredibly confusing. But we’re cautiously optimistic that there is an opportunity for us in these rules,” he says. “We understand why the USDA did what they did because of concerns the CPA had, but we want to make darn sure that residues and byproducts that don’t have higher value actually do qualify. Our initial read is that they would. We’re still studying them though, and have more questions than answers at this point.”

Steve Flick, board chairman of Centerview, Mo.-based Show Me Energy Cooperative, the first farmer-owned co-op in the U.S. to apply and qualify for BCAP collection, harvest, storage and transport (CHST) payments, says the co-op is glad to see the USDA narrowly define the intent and spirit of the BCAP. “We’ve been reading it like kids studying for a final exam in college,” he says. “We’re still evaluating what we like, but what we do know is that we favor that it defines ‘higher and better use,’ and that they made sure that the spirit was to create an industry that builds biorefineries that utilize bioenergy crops at the producer level, mostly on a regional basis, because what we do in the Midwest won’t work with what the people do in Florida or California.”

Flick says he thinks getting the program fully operational will be a slow process, but from the experience, USDA will learn what to do and what not to do in the next Farm Bill. “The success in the program will be making sure the farmers can generate the same wealth growing these [energy] crops, because at the end of the day they still have to make the same land payments.”