The U.S. Department of Agriculture has fully established the Biomass Crop Assistance Program (BCAP) to encourage the conversion of new biomass materials into energy without diverting biomass from existing markets.
Previously run as a pilot program, BCAP seeks to pay incentives to owners and operators of agricultural and forest lands to produce new sources of biomass materials for energy production without diverting biomass materials from existing markets. To read the final rule implementing the program, published in the Federal Register on October 27, 2010, click here.
BCAP contains two components:
1. Matching Payments. Producers of certain eligible biomass materials—or entities with the right to collect or harvest such materials—may qualify to receive $1 for each $1 per dry ton (up to $45 per dry ton) paid over a two-year period by a qualified biomass conversion facility (i.e., a facility that converts renewable biomass into heat, power, biobased products, or advanced biofuels).
Matching payments are designed to provide a financial incentive for agricultural and forest land owners and operators to sell certain biomass materials for energy usage that otherwise would have gone unused. Generally speaking, biomass materials eligible for matching payments must be collected or harvested directly from the land or separated from a higher-value product before delivery to a biomass conversion facility and cannot have a higher-value use in the local market.
BCAP does not require the producer to sell the material at arm’s length to the biomass conversion facility. Thus, in some situations, the biomass conversion facility or its affiliate may receive matching payments.
2. Establishment Payments and Annual Payments. Agricultural and forest land owners and operators may qualify to receive up to 75 percent of the cost of establishing or switching to eligible woody and non-woody perennial crops (annual crops are not eligible), plus one of the following:
- Annual payments for up to five years for the production of eligible annual and non-woody perennial renewable biomass crops
- Annual payments for up to 15 years for the production of eligible woody perennial renewable biomass crops