Enabling a New Industry
The Biomass Crop Assistance Program was established in the 2008 Farm Bill, but experienced some delays on the road to implementation. With the release of the USDA’s final rules, BCAP is now ready and able to help expedite the development of second-generation biobased technologies.
The program essentially provides incentives to interested farmers, ranchers and forest landowners to establish and cultivate biomass crops as feedstock in approved biorefineries for conversion into heat, power, biobased products or biofuels. According to the USDA, many biomass crops will take several years to become fully established, while the majority of bioenergy facilities will need several years to reach commercial production. “BCAP serves as a catalyst to unite these multiple dynamics by reducing financial risk for landowners who switch from familiar, revenue-generating crops to new, unconventional crops in preparation for these emerging markets,” the agency states.
To participate in the program, crop producers can team up with bioenergy producers and submit applications to the USDA. Accepted applications will be selected as BCAP project areas. If selected, crop producers are eligible for reimbursements totaling up to 75 percent of the cost to establish a bioenergy perennial crop. Qualified producers can also receive up to five years of annual payments for grassy crops, both annual and perennial; while producers of annual or perennial woody crops can receive up to 15 years of annual payments. Assistance is also available for the collection, harvest, storage and transport of biomass to qualified biomass conversion facilities. Farmers participating in that component of the program can receive a dollar-for-dollar matching payment, up to $45 per ton, for the delivery cost for a period of two years.
Poet LLC expects to see immediate positive impacts due to the impact of BCAP, says Jim Sturdevant, director of Poet’s cellulosic ethanol initiative, Project Liberty. “It’s a fantastic boost for farmers to get in the game of biomass harvesting,” he says. “Sometimes, when you are asking someone to do something they’ve never done before, a little extra incentive goes a long way. BCAP is that incentive to help these early adopters.”
Project Liberty is designed to use corn residues as feedstock for cellulosic ethanol production. All 85 farmers that Poet currently has contracted to supply feedstock to Project Liberty are expected to participate in the dollar-for-dollar matching component, Sturdevant says. “[This component of] BCAP is a two-year program, so these farmers can take advantage of it for another year as well,” he continues. “For new farmers that might be getting into it for the first time next year, they will also have a chance to stay in the program for two years. We happen to be paying farmers about $40 a bone-dry ton this fall, and BCAP means that farmers can double their money this fall. They’ll get a match for the full amount. It’s a very attractive program to get these farmers into the game and get them to invest in equipment that maybe they didn’t have before. It just helps the economics to clear this hurdle.”
According to Sturdevant, Poet was very pleased with the components of the final BCAP rule. The only alteration to the current program that it would like to see is to have it continue on through the next Farm Bill, he says. A new Farm Bill is drafted every five years, which means time is ticking on the 2008 version that originally established BCAP. Without an extension, the program will expire. “We would like to see it continue to grow our biofuels industry, and an absolutely essential component of that industry is feedstock,” Sturdevant says.