Course: BFM 101 Biofuels Fundamentals

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Agriculture-based Biofuels Policy
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Biomass Crop Assistance Program (BCAP)
Biomass Crop Assistance Program (BCAP)

The Renewable Fuel Standard (RFS) has mandated minimum volumes of biofuels in the national transportation fuel supply, of which cellulose-based fuels will be a component after 2016, and a major component by 2021. These projections imply that cellulose-based fuels will be commercially available at competitive prices. Expectations may be lowered over time. In either case, a reliable supply of cellulosic biomass will be needed in the future. Policy is being implemented to provide this.

The Farm Service Agency (FSA) Energy Program, the Biomass Crop Assistance Program (BCAP), works to provide financial support to private landowners. Owners and operators of agricultural and non-industrial private forestland are eligible for assistance if their objective is to establish, produce, and deliver biomass feedstocks.

Assistance from BCAP is divided into two authorized funding categories:

- Certain landowners who participate in contracts with the Commodity Credit Corporation (CCC) to generate eligible biomass crops on contract acres within BCAP projects areas may qualify for both establishment payments and annual payments.
- Matching payments may be obtainable for the distribution of eligible material to qualified biomass conversion facilities by eligible material owners. Qualified biomass conversion facilities produce heat, power, bio-based products, or advanced biofuels from biomass feedstocks.

Program Objectives

BCAP works to support the establishment and production of crops, including woody biomass, for conversion to bioenergy; this part of BCAP is called “establishment of annual payments.” The program also works to assist with the collection, harvest, storage and transportation of eligible material for use in biomass conversion facilities; this is called “matching payments.” In response to a presidential directive to accelerate the development of advanced biofuels, the BCAP, as a partner to the U.S. Department of Agriculture (USDA), works to meet such need.

“Additionally, BCAP will provide funding for producers of eligible renewable crops within a select geographical area to receive payments up to 75 percent of the cost of establishing the crop and annual payments for up to 15 years for crop production,” [2]. Once a geographical area within the U.S. is approved by the USDA as a project area, producers are eligible for establishment payments—to help get biomass crops planted.

FSA news release, dated 3 Feb 2010 and titled, Biomass Crop Assistance Program to Spur Production of Renewable Energy, Job Creation — A Vermont Elementary School that will replace 100% of its fossil fuel consumption with biomass is one of the early beneficiaries of the BCAP program. Two additional examples of early BCAP beneficiaries include, “a start-up pellet company that uses locally-grown agriculture residues from Iowa farms, and a rural electric cooperative that displaces fossil fuels with woodchips to generate low-cost electricity in northeastern Georgia,” [2].

Program History

The BCAP was created through the 2008 Farm Bill. In May of 2009, a Presidential initiative launched aBiofuels Interagency Working Group to build a foundation for accelerated deployment of advanced biofuels. One month later, the USDA issued the Notice of Funds Availability (NOFA) for “matching payments” for the collection, harvest, storage and transportation component of BCAP. In February of 2010, the USDA suspended NOFA due to issues with proposed BCAP rules—later that year in October, the USDA issued the final BCAP rules and regulations, [3].

The intention of BCAP is to shrink the financial risk that farmers, ranchers and forest landowners may face. Therefore, the assistance program provides incentive payments to those who invest in the “production, havest, storage and transportation of new first-generation energy crops that displace hydrocarbon-based materials now used for heat, power and vehicle fuel.” Matching payments are available for each participant but payments are discontinued after two years of start-up.

In Brief: How BCAP Works

BCAP provides assistance to support the production of eligible biomass crops on land within approved BCAP project areas.  In exchange for growing eligible crops, the Farm Service Agency will provide annual and establishment payments.

FSA will also provide matching payments to eligible material owners at a rate of $1 for each $1 per dry ton paid by a qualified biomass conversion facility up to $45 per dry ton delivered to the biomass conversion facility.

BCAP Eligible Crops

Eligible crops include renewable biomass, with the exception of crops eligible to receive a payment under the Commodity Title of the 2008 Farm Bill and plants that are invasive or noxious, or have the potential to become invasive or noxious, [4]. Such crops as hard and softwood chips, bark, legumes, non-yard waste grasses and vines, corn cobs and stover, sugarcane bagasse, rice straw, and wheat straw. Download a complete and detailed list ofBCAP Eligible Materials as of December 21, 2010.

Applying for and Qualifying as a Biomass Conversion Facility

A biomass conversion facility may apply for qualification online at http://www.fsa.usda.gov/bcap.  Online applications will be forwarded to FSA’s State offices for processing which will culminate with assignment of a unique facility identification number.

Applying for Matching Payments by Eligible Material Owners

An eligible material owner may apply for a matching payment at their county FSA office. FSA will only approve matching payments for deliveries to a qualified biomass conversion facility, [5].

Resources provided by the eXtension Farm Energy Community of Practice at http://www.extension.org/ag+energy

Agriculture-based Biofuels Policy
Conclusions