Suppliers of Pulp and Paper Companies Eligible for Matching Payments through BCAP

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When the Biomass Crop Assistance Program's qualified facility list was last updated on October 19, a trend became clear. Over two dozen pulp and paper mills showed up on the list.

Web Site: http://www.forest2market.com/f2m/us/f2m1/free/forest2fuel-archive/story/2009-Oct-Suppliers-BCAP

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Description

When the Biomass Crop Assistance Program's qualified facility list was last updated on October 19, a trend became clear. Over two dozen pulp and paper mills showed up on the list. The fact that pulp and paper companies have qualified as biomass conversion facilities may come as a surprise to those who thought the program was intended to benefit bioenergy companies and their suppliers and build a stable biomass market. The terms of the program make it clear, though, that a facility using biomass to create heat and electricity for its own operations qualifies.

Some of these companies burn black liquor instead of biomass, however. Right now, they are trying to determine what percentage of their feedstock goes to making the black liquor they feed into their boilers.

While we can't say for certain whether applying for matching payments for the material used to create black liquor is acceptable under the program, it appears the FSA is qualifying pulp and paper companies that are burning black liquor in their boilers. If this is the case, the program's funding could be consumed very quickly by pulp and paper companies, before it has a substantial impact on the development of bioenergy capacity.

One hurdle for these companies in areas like the Pacific Northwest may be that some of their raw materials come from public lands. The BCAP eligible material list specifically precludes matching payments for black liquor created from biomass harvested on Federal land. The same black liquor exclusion does not appear to apply to biomass from privately held lands, however. Because chips are nearly always mixed in a wood yard when a large percentage of the forests in the area are public, proving the chain of custody may be difficult.

The wait to find out whether suppliers of pulp and paper companies that burn black liquor qualify may be a short one. The Farm Service Agency (FSA) is scheduled to release the regulations that will govern the BCAP program matching payments in the next week or two. A 60-day comment period will follow. We encourage our readers to get involved in this process.

Additional Information

Web Site: http://www.forest2market.com/f2m/us/f2m1/free/forest2fuel-archive/story/2009-Oct-Suppliers-BCAP

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