Biomass Crop Subsidy Carries Hefty U. S. Price Tag

Anew U. S. program that subsidizes biomass crops for energy use may cost $263 million this year – nearly four times its expected cost – with an opening emphasis on forest and sugar scrap.

The Obama administration cited the Biomass Crop Assistance Program (BCAP) Feb. 3 in steps to encourage clean energy production. It would broaden the geographic base of a bioenergy industry now dominated by corn ethanol production mainly in the Midwest.

BCAP went into operation last summer on an interim basis. A more permanent regulation was opened for comment by the Agriculture Department Feb. 3.

Two types of activities are covered by BCAP. It provides matching payments to landowners and operators for materials used for production of heat, power, advanced biofuels and bio-based products. The payments, of up to $45 a dry ton for two years, would help cover the cost of gathering, storing and transporting the materials.

It also would share up to 75 per cent of the cost to farmers to establish biomass crops, so the new-generation feedstocks will be available when advanced biorefineries or power plants are built. Annual payments can be made for five to 15 years.

When BCAP became available last summer, it was aimed at the collection and transportation of biomass. Some 400 businesses are listed by USDA as par ticipants. The list is peppered with paper, lumber and wood pellet makers, sugar mills and electric utilities.

Farm activists have worried for months that BCAP would be dominated by businesses that are longtime recyclers of scrap materials to power their operations, rather than newcomers.

When BCAP was created, it was forecast to $70 million over five years. The administration has since estimated the cost at $263 million this fiscal year and $479 million in fiscal 2011, which opens Oct. 1.

“Beginning in 2010, the program will provide financial assistance for the establishment and maintenance of crops for bioenergy production, once regulations are completed,” said USDA in a budget document on the Internet.

The American Forest & Paper Association, a trade group, said its supports development of additional renewable energy. AFPA president Donna Harman urged USDA to “minimize BCAP’s distortions to existing markets for biomass.”



Stories from our other publications