AF&PA applauds USDA's BCAP final rule

By AF&PA | October 26, 2010

The USDA’s new Biomass Crop Assistance Program final rule announced last week by Secretary Tom Vilsack adopted an approach on the critical issue of matching payments designed to minimize distortions to the market for wood fiber that is essential for the forest products industry.

“We appreciate USDA’s consideration of industry concerns and the modifications made in the rulemaking process that will minimize market distortions and focus on supply,” said Donna Harman, president and CEO of the American Forest & Paper Association. “USDA’s revised approach on BCAP helps preserve existing jobs while also increasing renewable energy development particularly in rural communities.”

According to the USDA, under its new BCAP final rule, the department will resume making payments to eligible producers of biofuels. This system is designed to ensure that a sufficiently large base of new, nonfood, nonfeed biomass crops is established in anticipation of future demand for renewable energy consumption.

During the rulemaking process, AF&PA had expressed significant concern that USDA’s initial proposal for matching payments could distort the market for wood biomass, diverting fiber supplies away from the forest products industry, thereby unintentionally jeopardizing the significant number of jobs and renewable energy the industry produces. 

AF&PA argued that it would have been unsound policy to divert biomass from its higher value use and greater job-creating capacity in forest products manufacturing into less job-intense stand-alone biomass energy production. In July 2010, a study by RISI found that for a given volume of wood, the forest products industry sustains nine times more jobs than stand-alone biomass energy production. In addition, a forest resource study by Forisk Consulting found that about 50 million dry tons of forest residues and other under-utilized biomass was readily available without major capital investments. 

In a speech announcing the new rule, Vilsack said, “In crafting the final rule we paid attention to the concerns of industry and environmentalists, particularly with respect to woody biomass.”

“Secretary Vilsack and the staff of USDA, took seriously the concerns raised by various stakeholders during the comment process and produced a rule that is a win-win for jobs critical to our rural economy while positioning our country to make greater use of environmentally-friendly renewable energy sources,” Harman concluded. “We look forward to continued collaboration on our shared priorities.”