Biomass Crop Assistance Program (BCAP):
Status and Issues
Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy
June 22, 2010
Congressional Research Service
7-5700
www.crs.gov
R41296
CRS Report for Congress
P
repared for Members and Committees of Congress
Biomass Crop Assistance Program (BCAP): Status and Issues
Summary
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, 2008 farm bill) created the
Biomass Crop Assistance Program (BCAP). The two main purposes of BCAP are (1) to support
the establishment and production of eligible crops for conversion to bioenergy in selected areas,
and (2) to assist agricultural and forest land owners and operators with collection, harvest,
storage, and transportation of eligible material for use in a biomass conversion facility. BCAP is
intended to assist with the bioenergy industry’s hurdle of continuous biomass availability.
The U.S. Department of Agriculture’s (USDA’s) Farm Service Agency (FSA) implemented one
portion of BCAP—the Collection, Harvest, Storage, and Transportation (CHST) matching
payment program—on June 11, 2009, through a Notice of Funds Availability in the Federal
Register. The partial implementation created a possible unintended consequence of market
competition for wood shavings, wood chips, sawdust, and other wood “scraps” between
traditional purchasers—namely landscapers and particleboard manufactures—and facilities that
convert biomass to energy. The issuance of the BCAP proposed rule on February 8, 2010,
suspended CHST program enrollment and proposed rules for the implementation of the remainder
of the BCAP program.
According to USDA’s proposed rule, the two main components of BCAP are split into two forms
of payments: annual and establishment payments, which share in the cost of establishing eligible
biomass crops and maintaining production; and matching payments, which share in the cost of the
collection, harvest, storage, and transportation of biomass to an eligible biomass conversion
facility. The payments have different eligibility and sign-up requirements, payment rates, and
contract lengths. Funding for the program is mandatory through the Commodity Credit
Corporation (CCC) at “such sums as necessary” through FY2012.
While BCAP remains to be fully implemented, concerns regarding eligibility, sustainability, and
funding continue to be discussed. These issues could shape future congressional action on the
program in the context of budgetary measures and possible reauthorization in the next farm bill.
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Biomass Crop Assistance Program (BCAP): Status and Issues
Contents
Program Overview ...................................................................................................................... 1
Annual and Establishment Payments ..................................................................................... 3
Project Areas................................................................................................................... 3
Land ............................................................................................................................... 4
Eligible Producer ............................................................................................................ 4
Eligible Crop .................................................................................................................. 4
Contract .......................................................................................................................... 5
Agreement ...................................................................................................................... 5
Payment .......................................................................................................................... 5
Matching Payments............................................................................................................... 6
Conversion Facilities....................................................................................................... 6
Land ............................................................................................................................... 6
Material Owner ............................................................................................................... 6
Material .......................................................................................................................... 6
Agreement ...................................................................................................................... 7
Payment .......................................................................................................................... 7
Selected Issues ............................................................................................................................ 8
Eligible Crops and Material................................................................................................... 8
Wood Residue Competition............................................................................................. 8
Invasive and Noxious Species ....................................................................................... 10
“Black Liquor” ............................................................................................................. 11
Sustainability ...................................................................................................................... 11
Two Programs in One.......................................................................................................... 12
Budget Concerns................................................................................................................. 12
Tables
Table 1. Differences Between Annual and Establishment Payments
and Matching Payments in the BCAP....................................................................................... 3
Contacts
Author Contact Information ...................................................................................................... 14
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Biomass Crop Assistance Program (BCAP): Status and Issues
he Food, Conservation, and Energy Act of 2008 (P.L. 110-246, 2008 farm bill) created,
eliminated, and amended various agriculture-based energy programs.1 One of the
T potentially largest programs created under the energy title was the Biomass Crop
Assistance Program (BCAP).2 Congress authorized BCAP to support the establishment and
production of eligible crops for conversion to bioenergy in selected areas, and to assist
agricultural and forest land owners and operators with collection, harvest, storage, and
transportation of eligible material for use in a biomass conversion facility.
On June 11, 2009, the U.S. Department of Agriculture (USDA) implemented one portion of
BCAP, the Collection, Harvest, Storage, and Transportation (CHST) matching payment (now
known as the BCAP matching payment).3 The partial implementation was in response to a May 5,
2009, presidential memorandum requesting the Secretary of Agriculture to accelerate investment
in and production of biofuels. That memorandum specifically listed energy programs in the 2008
farm bill, including “guidance and support for collection, harvest, storage, and transportation
assistance for eligible materials for use in biomass conversion facilities.”4 USDA’s notice
eventually raised concern about possible market competition between the matching payments
program and existing wood manufacturing industries.5 On February 8, 2010, USDA issued the
BCAP proposed rule,6 suspending CHST program enrollment and proposing rules to implement
the remainder of the BCAP program. The BCAP proposed rule alters matching payments,
possibly addressing previous concerns from wood manufacturing industries. Over 24,000
comments were received on the proposed rule, which is now under consideration at USDA.7
Program Overview
Federal policy plays a key role in the development of the bioenergy sector. Through the Energy
Independence and Security Act of 2007 (EISA, P.L. 110-140), Congress established a goal of 36
billion gallons of biofuel production by 2022, including 16 billion gallons of cellulosic biofuels.
One ongoing hurdle for cellulosic biofuels development and manufacturing is the need for a
constant supply of available biomass.8 Investors are reluctant to invest in an as-yet unproven
1 For more information on the 2008 farm bill energy title, see CRS Report RL34130, Renewable Energy Programs in
the 2008 Farm Bill.
2 BCAP is authorized by Sec. 9001 of the Food, Conservation, and Energy Act of 2008, which created a new Sec. 9011
within the Farm Security and Rural Investment Act of 2002 (P.L. 107-171; 7 U.S.C. §8111, et seq.).
3 USDA, Commodity Credit Corporation, “Notice of Funds Availability (NOFA) for the Collection, Harvest, Storage,
and Transportation of Eligible Material,” 74 Federal Register 27767-27772, June 11, 2009.
4 U.S. President (Obama), “Memorandum on Biofuels and Rural Economic Development,” Daily Compilation of
Presidential Documents, vol. DCPD200900328 (May 5, 2009).
5 “CPA says USDA Biomass Program a Threat to Wood Products Industry,” Wood and Wood Products, Trends and
News, December 2009.
6 USDA, Commodity Credit Corporation, “Biomass Crop Assistance Program,” 75 Federal Register 6264, February 8,
2010.
7 U.S. Congress, House Committee on Agriculture, Subcommittee on Conservation, Credit, Energy, and Research,
testimony of Cheryl Cook, Deputy Under Secretary, Rural Development; Jonathan Coppess, Administrator, Farm
Service Agency; Carmela Bailey, National Program Leader for Biobased Products and Bioenergy, National Institute of
Food and Agriculture, hearing, To review the implementation of the 2008 Farm Bill energy title, 111th Cong., 2nd sess.,
June 9, 2010.
8 Biomass is organic matter that can be turned into energy. For further discussion on biomass as defined in the 2008
farm bill, see the text box below or CRS Report R40529, Biomass: Comparison of Definitions in Legislation.
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technology—the conversion of cellulosic biomass to biofuels. Meanwhile, producers are
unwilling to devote land and resources to planting a crop without a market. The development of a
cellulosic biofuels industry hinges on effective use and availability of new feedstocks. While
BCAP does not provide the initial investment funding for production facilities, it is intended to
assist with some of the biomass supply challenges.
BCAP has two main statutory purposes:
• to support the establishment and production of eligible crops for conversion to
bioenergy in selected areas, and
• to assist agricultural and forest land owners and operators with collection,
harvest, storage, and transportation of eligible material for use in a biomass
conversation facility.
The first purpose of BCAP is intended to assist the biomass industry with establishing the
production of eligible crops for conversion (e.g., dedicated biomass crops), thus encouraging
longer-term investment though multi-year contracts and annual payments. The second purpose of
BCAP is to assist with additional supply challenges, including the collection, harvest, storage, and
transportation of biomass, through temporary measures (two-year contracts and matching
payments). Funding for BCAP is mandatory through the Commodity Credit Corporation (CCC) at
“such sums as necessary” through FY2012.9 BCAP is administered by USDA’s Farm Service
Agency (FSA).10
As outlined in USDA’s proposed rule, the two main components of BCAP are split into two forms
of payment: annual and establishment payments, and matching payments.11 The purpose of the
annual and establishment payments would be to assist producers with establishing new dedicated
biomass crops for bioenergy production and to cover possible income forgone and additional risk
associated with shifting away from traditional crop production. Annual payments would be made
to eligible producers of biomass crops within a specific project area. Establishment payments
would cover the cost associated with “establishing” these crops (i.e., clearing, planting, and
seeding) within a project area. The purpose of the matching payment would be to provide
incentives for collecting underutilized biomass for bioenergy production. This would remove
existing biomass where it might not currently be profitable to do so (e.g., crop residue or forest
undergrowth). Through a matching payment, USDA would pay dollar-for-dollar, up to $45 per
ton, of the price to collect, harvest, store, and transport eligible material to biomass conversion
facilities. These payments include different eligibility and sign-up requirements, payment rates,
and contract lengths. Table 1 highlights some of the main differences between the payment types,
which is further explained in the following sections.
9 The CCC is the funding mechanism for the mandatory payments administered by various agencies of USDA. It is a
wholly owned government corporation that has the legal authority to borrow up to $30 billion at any one time from the
U.S. Treasury (15 U.S.C. §714 et seq.). It repays most of the funds it borrows with appropriations within the annual
Agriculture appropriations law, usually as an indefinite “such sums as necessary” appropriation. Under Sec. 9001 of the
2008 farm bill, BCAP is funded with CCC funds using “such sums as are necessary for each of fiscal years 2008
through 2012.”
10 For additional BCAP information, see the Farm Service Agency’s website, http://www.fsa.usda.gov/FSA/webapp?
area=home&subject=ener&topic=bcap.
11 Because annual payments and establishment payments have similar eligibility requirements and limitations they are
discussed together and referred throughout this report as “annual and establishment payments.”
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Table 1. Differences Between Annual and Establishment Payments
and Matching Payments in the BCAP
Annual and Establishment Payments Matching Payments
Location Project
areas
only Nationwide
Eligible Lands
Private lands
Federal, state, tribal, and private lands
Who participates
Eligible producers
Eligible biomass material owners
Eligible for payments
Eligible biomass crop
Eligible biomass material
Contract vs. Agreement
Contract with producers; agreement with
Agreement with biomass conversion
project area sponsors
facilities
Contract or agreement period
5-15 years
2 years
Payment type
Annual payments and payments for
Matching payment for the col ection,
establishing the initial crop
harvest, storage, and transportation of
eligible material
Payment limit
75% of the cost to establish the crop
Up to $45 per ton matching payment
Source: CRS and USDA, Commodity Credit Corporation, “Biomass Crop Assistance Program,” 75 Federal
Register 6264, February 8, 2010.
Following is a brief description and overview of the program as outlined in USDA’s proposed
rule.
Annual and Establishment Payments
Producer eligibility under BCAP’s annual and establishment payments is limited to approved
project areas. Project areas are to be proposed by project sponsors and are limited to a specific
geographic region if determined eligible. Under USDA’s proposed rule, project proposals would
be accepted by FSA on a continuous basis and, if the project is approved, producers within the
project area would be eligible for annual payments and establishment payments. Establishment
payments could cover up to 75% of the cost to establish eligible non-woody and woody perennial
biomass crops. These costs could include, but are not limited to, seed and perennial stock
purchase, site preparation, and planting. Annual payments would support up to 15 years of
eligible woody crop production and five years of non-woody crop production. These payments
would assist with the additional risk and possible forgone income associated with shifting away
from traditional crop production.
Project Areas
Project areas are proposed by project sponsors, likely a group of producers or a biomass
conversion facility. The USDA proposed rule makes no restrictions on who may sponsor a
project. Sponsors could include biomass conversion facility owners, such as federal entities,
private entities, state or local government agencies, schools, or nongovernment organizations. The
statute authority requires project area sponsors to include the following as part of the proposal:12
12 Sec. 9011(c)(2) of the Food Security and Rural Investment Act of 2002 (7 U.S.C. 8111 et seq.), as amended.
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• a description of the eligible land and eligible crops of each producer that will
participate in the proposed project area;
• a letter of commitment from a biomass conversion facility that the facility will
use the eligible crops intended to be produced in the project area;
• evidence that the biomass conversion facility has sufficient equity available, if
the facility is not operational at the time the proposal is submitted; and
• any other appropriate information about the biomass conversion facility that
gives reasonable assurance that the plant will be in operation by the time eligible
crops are ready for harvest.
Proposals are evaluated on a set of statutorily defined criteria, including the volume of crops
proposed to be produced; the volume of biomass from sources other than those grown on contract
acres; the anticipated economic impact to the project area; the opportunity for local producers to
participate in ownership of the facility; the impact on soil, water, and related resources; the
variety of biomass production approaches within the project area; and the range of eligible crops
among project areas. According to the USDA proposed rule, all proposals meeting these criteria
would be considered eligible for BCAP as project areas.
Land
As defined in statute, only private agricultural and nonindustrial private forest lands are
considered eligible under the annual and establishment payment portion of BCAP. Federal and
state-owned lands are ineligible. Lands enrolled in existing land retirement programs for
conservation purposes—the Conservation Reserve Program, the Wetlands Reserve Program, and
the Grassland Reserve Program—are also ineligible. To address the concern of native grassland
conversion, any land considered “native sod” as of the date of enactment (June 18, 2008) is also
considered ineligible.13
Eligible Producer
Producers within the selected BCAP project area would be eligible to receive annual and
establishment payments after entering into a BCAP contract. According to the USDA proposed
rule, producers with established eligible crops would be unable to collect an establishment
payment but would remain eligible for annual payments. The project sponsor would also be
eligible to collect annual and establishment payments, so long as the land is eligible and not state-
owned.
Eligible Crop
The 2008 farm bill defines the term “eligible crop” under the annual and establishment payment
portion of BCAP as a crop of renewable biomass (see text box below).14 This is different from the
13 Sec. 9011(a)(5)(B)(ii) of the Farm Security and Rural Investment Act of 2002, (7 U.S.C. 8111 et seq.) as amended by
Sec. 9001 the Food, Conservation, and Energy Act of 2008 (P.L. 110-246).
14 For additional discussion about biomass definitions, see CRS Report R40529, Biomass: Comparison of Definitions in
Legislation.
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matching payment portion of BCAP, which includes a separate definition for “eligible material.”
Although both eligible crops and eligible material are defined as renewable biomass, exclusions
for the two differ. Eligible crops under the annual and establishment payment portion of BCAP
may not include crops eligible for payments under Title I of the 2008 farm bill15 or any plant that
is invasive or noxious or has the potential to become invasive or noxious.
Contract
BCAP contracts for annual and establishment payments vary in length: five years for non-woody
perennial crops and 15 years for woody perennial crops. All contracts are required to have an
active and current conservation plan or forest stewardship plan, depending on the type of crop
grown. These plans seek to address environmental concerns of potential impact on soil, water,
and related resources. Participants must also be in compliance with highly erodible and wetland
conservation requirements.16
Agreement
Agreements for annual and establishment payments may be made between USDA and a project
area sponsor. According to USDA’s proposed rule, these agreements specify the qualified project
area sponsor’s plans and how the sponsor will support the establishment and production of
eligible crops for conversion to bioenergy in the BCAP project areas. This could include the type
of biomass that will be used for the project, the intended use of the biomass and type of energy
produced, and any new or proposed uses for the biomass.
Payment
Establishment payments may cover up to 75% of the cost of establishing a perennial crop,
including woody biomass. These costs may include the cost of seeds and stock for perennials; the
cost of planting the perennial crop; and, for nonindustrial private forestlands, the cost of site
preparation and tree planting.
According to USDA’s proposed rule, BCAP annual payments are on a per-acre basis and would
use market-based rental rates determined by FSA. By law, these payments could be reduced for
several reasons:
• if an eligible crop is used for purposes other than the production of energy at the
biomass conversion facility (the proposed rule would reduce payments on a
dollar-for-dollar basis);
• if an eligible crop is delivered to the biomass conversion facility (the proposed
rule would reduce payments by 25%);
15 As defined in the USDA proposed rule, these include whole grain derived from a crop of wheat, corn, grain sorghum,
barley, oats, or rice; honey; mohair; oilseeds such as sunflower seed, rapeseed, canola, safflower, flaxseed, mustard
seed, crambe, soybeans, and sesame seed; pulse crops such as dry peas, lentils, or small chickpeas; peanuts; sugar;
dairy products; wool; and cotton boll fiber.
16 Highly erodible lands compliance may be found under Subtitle B of Title XII of the Food Security Act of 1985 (16
U.S.C. 3811 et seq.) and wetlands compliance may be found under Subtitle C of Title XII of the Food Security Act of
1985 (16 U.S.C. 3821 et seq.).
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• if the producer receives a BCAP matching payment (the proposed rule would
reduce payments on a dollar-for-dollar basis);
• if the producer violates a term of the contract (the proposed rule would reduce
payments on a dollar-for-dollar basis); or
• under other circumstances determined by USDA.
Matching Payments
Matching payments under BCAP are intended to assist agricultural and forest land owners and
operators with collection, harvest, storage, and transportation of eligible material for use in a
biomass conversion facility. Unlike the annual and establishment payments discussed above, the
matching payments would not necessarily define eligible facilities by project areas. BCAP
matching payments could be made at the rate of $1 for each $1 per ton of biomass provided by
the eligible biomass conversion facility. Payments could not exceed $45 per ton for a two-year
period. The exact payment structure under this portion of BCAP remains unclear. USDA’s
proposed rule offered three options, which were open to public comment.
Conversion Facilities
A biomass conversion facility is defined in statute as a facility that converts or proposes to
convert renewable biomass into heat, power, biobased products, or advanced biofuels.
Land
Unlike under the BCAP annual and establishment payments, land is not a limiting factor. If the
material is determined to be eligible, then the land from which it comes is not an issue. According
to the USDA proposed rule, eligible material may be harvested or collected from certain National
Forest System and Bureau of Land Management lands, from nonfederal lands, including state and
locally held government lands, and from tribal lands held in trust by the federal government.17
Material Owner
According to USDA’s proposed rule, only an eligible material owner may sell to a biomass
conversion facility and be considered eligible to receive a matching payment. For materials
collected on private lands, this could be the landowner, the operator or producer of the farming
operation, a biomass conversion facility that owns or operates eligible land, or a person
designated by the landowner. For public lands, material owners must have the right to harvest or
collect material through a permit, contract, or agreement with the appropriate agency or
government entity. Federal government entities are not eligible.
Material
Similar to eligible crops under the annual and establishment payments, eligible material is also
defined as renewable biomass. However, the exclusions to renewable biomass differ for eligible
17 Some restrictions do apply to the harvesting times, methods, and levels from nonprivate land.
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materials as compared with eligible crops. Eligible material does not include crops eligible to
receive payments under Title I of the 2008 farm bill; animal waste and byproducts (including fats,
oils, greases, and manure); food waste and yard waste; and algae. According to the proposed rule,
this definition allows for invasive and noxious species to be considered as eligible material.
Agreement
Agreements for matching payments may be made between USDA and an eligible biomass
conversion facility. According to USDA’s proposed rule, these agreements include items such as
the obligation of the facility to provide a purchase list, receipts, and scale tickets for the eligible
material owners, and the agreement to make the facility’s address and contact information
publicly available.
Payment
BCAP matching payments are limited to $1 for each $1 per ton provided by the biomass
conversion facility, not to exceed $45 per ton. The exact payment structure is unclear, as the
proposed rule provides three options for public comment.
Option 1
USDA’s proposed rule would offer two-year agreements for BCAP matching payments. Payments
would be made at a rate of $1 for each $1 per ton received at an eligible conversion facility, up to
$45 per ton for a facility that produces cellulosic ethanol and up to $16 per ton for a facility that
produces anything other than cellulosic ethanol. Non-cellulosic ethanol may include heat, power,
or biobased products. The statutory maximum for BCAP matching payments is $45 per ton.18
Option 2
USDA’s proposed rule would offer two-year agreements for BCAP matching payments. Payments
would be made at a rate of $1 for each $1 received at an eligible conversion facility, up to $45 per
ton. No payments would be made to facilities that convert vegetative waste materials, such as
wood waste and wood residues, to heat or power for the facility. Payments would only be made
for materials delivered to these facilities that generate heat or power above a historic baseline.
The baseline is not defined in USDA’s proposed rule.
Option 3
USDA’s proposed rule would offer two-year agreements for BCAP matching payments made at a
rate of $1 for each $1 received at an eligible conversion facility. Payments would be made for up
to $45 per ton if the facility:
1. fully converted from fossil fuel consumption to renewable biomass feedstock;
2. shows exceptional promise for producing innovative advanced biofuels,
renewable energy, or biobased products; or
18 Sec. 9011(d)(2)(B) of the Farm Security and Rural Investment Act of 2002, (7 U.S.C. §8111, et seq.) as amended.
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3. uses an increased amount of renewable biomass material above the facility’s
historic baseline.
Facilities that do not increase renewable biomass consumption above a historic baseline would
only be eligible for up to $16 per ton matching payment.
Selected Issues
Initial BCAP matching payments19 raised questions and concerns about the BCAP program as a
whole. Although BCAP remains to be fully implemented, concerns regarding eligibility,
sustainability, and funding continue to be discussed. These issues could shape future
congressional action on the program in the context of budgetary measures and possible
reauthorization during the next farm bill debate.
Eligible Crops and Material
Defining what is considered an eligible material or eligible crop under BCAP has become
somewhat contentious. Concerns have surfaced about eligible material creating direct competition
with existing uses through the matching payments.20 Others have expressed concerns about
allowing certain fast-growing non-native plants, such as miscanthus, to be included as eligible
crops.21 Below is an expanded discussion on issues related to eligible material and eligible crops.
Wood Residue Competition
In early 2010, after USDA’s 2009 notice on matching payments, some manufacturing and nursery
industries that use wood shavings, wood chips, sawdust, and other wood “scraps” noticed an
increase in price for their raw materials. This increase was linked, by some, to the BCAP
matching payments, which offered a federal payment match for the same materials if delivered to
a qualified biomass conversion facility.22 The matching payment of up to $45 per ton created an
incentive for material owners to sell to biomass facilities rather than to manufacturers that use the
same raw materials for products such as composite panels, particle board, and fiberboard, or to
nurseries and landscaping firms that use bark and wood chips for mulch.
Renewable biomass harvested from the National Forest System and other public land is subject to
a statutory provision that prohibits material that would otherwise be used for higher-value
products.23 This prohibition, however, does not necessarily apply to renewable biomass harvested
19 Formally referred to in USDA’s notice as the CHST matching payment program.
20 U.S. Congress, House Committee on Agriculture, Subcommittee on Conservation, Credit, Energy, and Research,
Representative Minnick’s comments on BCAP, hearing, To review the implementation of the 2008 Farm Bill energy
title, 111th Cong., 2nd sess., June 9, 2010.
21 S. Raghu, R. C. Anderson, and C. C. Daehler et al., “Adding Biofuels to the Invasive Species Fire?,” Science,
September 22, 2006, p. 1742.
22 Juliet Eilperin, “The Unintended Ripples from the Biomass Subsidy Program,” The Washington Post, January 10,
2010, p. A03.
23 Under Sec. 9001(12)(A)(ii) of the Farm Security and Rural Investment Act of 2002 (P.L. 107-171), as amended by
Sec. 9001 of the Food, Conservation, and Energy Act of 2008, the term “renewable biomass” includes material that
would not otherwise be used for higher-value products, if from National Forest System lands and public lands.
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from private land. According to USDA’s proposed rule, because the 2008 farm bill (P.L. 110-246)
did not specifically prohibit biomass that would have otherwise been used for higher-value
products produced on private land, the biomass remained eligible for BCAP matching payments.
Based on the initial reaction to the BCAP matching payments, USDA now proposes to apply the
public land restriction to private land as well. Therefore, all biomass material that would
otherwise be used for higher-value products, from either public or private sources, is considered
ineligible under USDA’s proposed rule.
Defining Renewable Biomass
The 2008 farm bill included a definition for renewable biomass under Title IX. Biomass has separate and distinct
definitions on public and private lands. Biomass on public lands would typical y come from tree and brush removal for
fire prevention purposes, trees unsuitable for commercial harvest, invasive plant removal, and diseased, damaged, or
immature tress culled in accordance with forest management practices. Biomass on private land is more broadly
defined and includes other organic materials such as animal waste and byproducts, food waste, yard waste, and algae.
Federal Lands, including National Forest System land, as defined in Section 11(a) of the Forest and Rangeland
Renewable Resources Planning Act of 1974 (16 U.S.C. § 1609), and public lands managed by the Bureau of Land
Management, as defined in Section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. §1702)—
Renewable biomass includes materials, pre-commercial thinnings, or invasive species that:
(1) are byproducts of preventive treatments that are removed to reduce hazardous fuels, to reduce or contain
disease or insect infestation, or to restore ecosystem health;
(2) would not otherwise be used for higher-value products; and
(3) are harvested in accordance with applicable law and land management plans and the requirements for old-
growth maintenance, restoration, and management direction, and large-tree retention.
Private Lands, including nonfederal land or land belonging to an Indian or Indian tribe that is held in trust by the
United States—Renewable biomass includes any organic matter that is available on a renewable or recurring basis,
including:
(1) renewable plant material such as feed grains, other agricultural commodities, other plants and trees, and
algae;
(2) waste material (crop residue, wood waste, wood residues, and other vegetative waste material);
(3) animal waste and byproducts such as fats, oils, greases, and manure; and
(4) food waste and yard waste.
For additional discussion on the definition of biomass, see CRS Report R40529, Biomass: Comparison of Definitions in
Legislation.
While manufacturing industries that use wood residue offered the greatest opposition to BCAP
matching payments as published under the USDA notice, those in the lumber industry that were
receiving higher prices also questioned the sustainability of the provision. Some in the biomass
industry highlight the temporary nature of the BCAP matching payments (maximum two years),
and hope that implementation will focus on the BCAP annual and establishment payments, which
are longer-term.24 Others question USDA’s ability to distinguish between high-value product
material and renewable biomass material in the future, despite the language in the proposed rule.
Some believe the fungibility of wood could continue to generate competition between wood-
based product output and renewable energy production.25 The BCAP matching payments
24 Conference discussion at the Renewable Energy and Technology Conference, Washington, DC, February 4, 2010.
25 Roger A. Sedjo, The Biomass Crop Assistance Program: Some Implications for the Forestry Industry, Resources for
(continued...)
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implemented through the USDA notice have been suspended because of the publication of
USDA’s proposed rule.26
Invasive and Noxious Species
Some have expressed concern that eligibility criteria for materials and crops under BCAP may
conflict with practices aimed at limiting the introduction of invasive and noxious species. Others,
including USDA, praise invasive and noxious species inclusion in BCAP as a incentive to further
eradication efforts.27 The 2008 farm bill provides separate definitions of eligible material and
eligible crops. Eligible crop criteria apply to the annual and establishment payments portion of
BCAP and eligible material criteria refer to BCAP’s matching payments. Invasive and noxious
species are considered ineligible as crops for BCAP’s annual and establishment payments, but are
not excluded as eligible material under BCAP’s matching payments.
The inclusion of invasive and noxious species as eligible material has generated both concern and
interest in the environmental community.28 Some note that while the incentive for removal is
praiseworthy, such removal could have the unintended consequence of perpetuating the species.
USDA’s proposed rule addresses this concern by excluding removal and transportation during
reproductive periods. It remains unclear whether there would be a penalty for those who, either
purposely or not, spread or establish an invasive or noxious species while carrying out the
activities to receive a matching payment.
Several plant traits of an ideal biomass crop are also commonly found among invasive grasses:
low energy requirements for maintenance; efficient use of light, water, and nutrients; perennial
growth; and high yields. Based on comments received from USDA’s notice, miscanthus is
proposed to be an eligible energy crop under USDA’s proposed rule. Miscanthus is a non-native,
fast-growing, perennial grass that some consider an ideal energy crop for many of the reasons
stated above.29 Others, especially in the prairie region, are concerned that prairie grasslands
would be the primary target for miscanthus production.30 Another concern is that the nonsterile
varieties can become invasive and noxious.31 Some states include varieties of miscanthus on
statewide noxious weed listings. In these states, it would be ineligible as a crop under USDA’s
proposed rule; however, there is continued concern that the plant’s introduction as a crop could
(...continued)
the Future, RFF DP 10-22, Washington, DC, March 2010.
26 USDA, FSA, Payment Authority for Biomass Crop Assistance Program, Notice BCAP-14, Washington, DC, May
12, 2010, http://www.fsa.usda.gov/Internet/FSA_Notice/bcap_14.pdf.
27 USDA, “Biomass Crop Assistance Program to Spur Production of Renewable Energy, Job Creation,” press release,
February 3, 2010, http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true&contentid=2010/02/0046.xml.
28 Letter from Bruce Leopold, President, Wildlife Society, to Director of CEPD, USDA Farm Service Agency, April 9,
2010, http://joomla.wildlife.org/documents/BCAP_rule_comments.pdf.
29 Dan Burden, Miscanthus Profile, Agricultural Marketing Resource Center, August 2009, http://www.agmrc.org/
commodities__products/biomass/miscanthus_profile.cfm.
30 Land that is native sod as of June 18, 2008, is considered ineligible (Sec. 9011(a)(5)(B)(ii) of the Food Security and
Rural Investment Act of 2002, as amended). Missouri Prairie Foundation, “Latest News: USDA Releases Long-
Awaited Biomass Crop Proposal (BCAP) ,” press release, June 2010, http://www.moprairie.org/LatestNews.html#.
31 USDA, NRCS National Plants Database, PLANTS Profile: Miscanthus Andersson Silvergrass, June 2010,
http://plants.usda.gov/java/profile?symbol=MISCA.
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have unintended consequences, given that the USDA proposed rule does not distinguish between
the sterile variety and nonsterile variety.
“Black Liquor”
Concerns have been raised about “black liquor” meeting the definition of renewable material
under BCAP. Black liquor is a waste product from the paper production process composed of
mostly organic lignin and inorganic pulping chemicals, and has long been used in the pulp and
paper industry as a source of energy.32 A biofuel tax credit in the 2008 farm bill became
controversial when paper companies’ use of black liquor qualified as a renewable fuel, thereby
allowing the companies to qualify for the tax credit. A provision in the enacted health care bill
(P.L. 111-148) disqualifies black liquor from eligibility. USDA’s proposed rule states that black
liquor is considered an industrial waste by-product and therefore is not eligible under BCAP.
Despite this declaration, those in favor of black liquor’s inclusion as an eligible source object to
USDA’s reasoning that black liquor is made from “inorganic” material, citing that “neither the
statute nor the BCAP eligible materials list requires that eligible biomass actually originate
directly from the land.”33
Sustainability
BCAP has a dual purpose of establishing new dedicated biomass crops for bioenergy production
(annual and establishment payments) and increasing the collection of existing and underutilized
biomass for bioenergy production (matching payments). The latter purpose—incentives for
biomass removal in areas where it is possible but not currently profitable—is a key factor for the
forestry sector. The removal of hazardous wildfire fuels and invasive species could provide
biomass for renewable energy conversion rather than being disposed of in ways that contribute
additional carbon to the atmosphere.34
In addition to biomass removal from forestland, crop residue is also considered to be viable
biomass for renewable energy production. Following harvest, the remaining plant, or residue, can
be left on the ground for soil health, erosion and weed control, water quality, and nutrient
management. The amount of residue left behind depends on the location, crop, and other locally
driven factors. The research on crop residue removal varies in the amount that can be sustainably
removed, ranging between 25% and 70%.35 Many federal conservation programs provide
financial assistance for practices that increase crop residue retention on the land, because of the
environmental benefits.36 The BCAP payments to remove this residue for bioenergy production
32 For additional information, see the “Black Liquor” section in CRS Report 96-397, Canada-U.S. Relations.
33 Letter from Paul Noe, Vice President for Public Policy at the American Forest and Paper Association, April 8, 2010,
http://www.regulations.gov/search/Regs/contentStreamer?objectId=0900006480ad3920&disposition=attachment&
contentType=xml.
34 See CRS Report R40811, Wildfire Fuels and Fuel Reduction.
35 Several research articles exist on this subject. An example of lower residue estimates is, H. Blanco-Canqui and R.
Lal, “Corn Stover Removal for Expanded Uses Reduces Soil Fertility and Structural Stability,” Journal of American
Soil Science, vol. 73 (2009), pp. 418–426. An example of higher removal estimates is J. Sheehan, A. Aden, and K.
Paustian et al., “Energy and Environmental Aspects of Using Corn Stover for Fuel Ethanol,” Journal of Indian
Ecology, vol. 7 (2004), pp. 117-146.
36 For more information on available agricultural conservation programs, see CRS Report R40763, Agricultural
Conservation: A Guide to Programs.
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have caused some to question whether this is a duplication of the federal effort and is
counterproductive. Soil scientists in particular are concerned that the benefits to bioenergy would
not outweigh the potential soil and environmental concerns associated with the removal of crop
residue and caution against removing too much residue in sensitive areas.37
Dedicated biomass crops, such as switchgrass, hybrid poplars, and hybrid willows, are considered
by many to be more desirable crops because they have a short rotation (re-grow quickly after each
harvest) and use fewer resources, such as water and fertilizers, than traditional field crop
production. Compared with field crops such as corn, dedicated biomass crops are also thought to
have less impact on available food supplies.38 Despite potential environmental benefits, concerns
persist about the additional use of fertilizers and water resources that could be required to
increase the per-acre yields to become economically feasible.39 Also, the continued demand for
biomass supply could generate additional land use pressures for expanded production, possibly in
direct competition with current land conservation programs, such as the Conservation Reserve
Program.40
Two Programs in One
Because BCAP has two distinct payment mechanisms—annual and establishment payments and
matching payments—many view BCAP as two separate and unique programs in one. Different
definitions and exclusions between the two payment types could create confusion as the program
begins to evolve in rulemaking. Furthering this confusion was USDA’s partial rollout of BCAP by
implementing the matching payment portion of the program through a notice in June 2009, before
the overall annual and establishment payment portion was proposed in February 2010. The
unanticipated popularity of BCAP matching payments, combined with higher than expected
obligations and unintended consequences from product competition, generated concern among
many BCAP supporters that the program was drawing too much negative criticism before the
whole program was fully implemented.41 While many support the idea of assisting both dedicated
biomass crops and the increased collection of existing biomass, Congress might consider
modifying BCAP during the next farm bill debate in 2012 based on the ongoing implementation
of the program.
Budget Concerns
As BCAP becomes fully implemented, many are watching the overall cost of the program. BCAP
is currently authorized to be funded with “such sums as necessary” from the CCC. In short,
USDA may use a virtually unlimited amount of funding from the CCC to implement BCAP, until
the program’s authority expires on September 30, 2012. Because funding is mandatory and paid
through CCC, no annual appropriations are required for BCAP.
37 Rattan Lal, “Is Crop Residue a Waste?” Journal of Soil and Water Conservation, vol. 59, no. 6 (Nov/Dec 2004), pp.
136A-139A.
38 Bruce A. Babcock, Breaking the Link between Food and Biofuels, Briefing Paper 08-BP 53, July 2008, Center for
Agricultural and Rural Development, Iowa State University, http://www.card.iastate.edu.
39 Institute for Agriculture and Trade Policy, Growing a New Crop for a New Market, August 2009,
http://www.iatp.org/iatp/publications.cfm?refid=106612.
40 Loni Kemp and Julie M. Sibbing, Growing a Green Energy Future, National Wildlife Federation, March 2010.
41 Conference discussion at the Renewable Energy and Technology Conference, Washington, DC, February 4, 2010.
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The BCAP matching payments issued under USDA’s notice represent only partial implementation
of the full program. These initial BCAP matching payments generated more interest than
expected when the 2008 farm bill was enacted, and spending quickly exceeded the initial 2008
projections of program costs by the Congressional Budget Office (CBO). When the farm bill was
enacted in 2008, CBO originally estimated combined outlays for FY2009 and FY2010 to be a
total of $9 million, and $36 million during the authority of the program (FY2008-FY2012).42 In
its March 2010 baseline, CBO projected that BCAP will need $602 million of budget authority in
FY2010 and $432 million in FY2011. As of May 2010, an estimated total of $235 million has
been paid out to participants.43
To date, BCAP outlays are more than initially projected, and for only partial implementation of
the program. As a result of negotiations during the 2008 farm bill, BCAP does not include
“baseline” budget spending beyond 2012.44 Based on current budgetary requirements, the
authorizing committees could potentially need to secure offset funding if BCAP were to be
reauthorized in the next farm bill. This could prove difficult given tight budgetary constraints and
the more recent and higher projections of the program’s cost compared to its initial cost estimates.
The Senate-passed version of the FY2010 supplemental appropriation (H.R. 4899) contains a
provision that would limit mandatory spending on BCAP by allowing no more than $552 million
in FY2010 and $432 million in FY2011. The difference between the current CBO baseline
estimates and the limits placed in the supplemental would create an estimated savings of $50
million in FY2010 and no change in FY2011 (assuming the supplemental is enacted before the
final rule to implement the program is adopted and participants enroll).45
42 Congressional Budget Office, “Food, Conservation, and Energy Act of 2008—Conference Agreement,” March 2007
CBO baseline (modified to reflect subsequent enacted legislation), May 12, 2008.
43 USDA, FSA, BCAP CHST Summary Report: FY2009 and FY2010, June 7, 2010, http://www.fsa.usda.gov/Internet/
FSA_File/bcap_chst_summary_report.pdf.
44 As with all federal programs, the farm bill debate is influenced by budgetary constraints imposed by Congress. The
baseline establishes how much authorizers may spend on a bill without having to seek offsets elsewhere. Calculating
the baseline assumes a continuation of current policies under expected economic conditions; therefore, if a program
does not have a baseline, is not expected to continue in future years. Sec. 257 of the Balanced Budget and Emergency
Deficit Control Act of 1985 (P.L. 99-177, 2 U.S.C. §907), as amended, specifies that expiring mandatory spending
programs are assumed to continue in the budget baseline if they have outlays of more than $50 million in the current
year and were established before the Balanced Budget Act of 1997. Programs established after that date are not
automatically assumed to continue, and are assessed program by program in consultation with the House and Senate
Budget Committees. Although this rule expired in September 2006, CBO continues to prepare baselines following this
methodology (CBO, The Budget and Economic Outlook: Fiscal Years 2010 to 2020, pp. 10, 63, and 144, at
http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf).
45 For more on these types of changes in mandatory program spending, see CRS Report R41245, Reductions in
Mandatory Agriculture Program Spending.
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Author Contact Information
Megan Stubbs
Analyst in Agricultural Conservation and Natural
Resources Policy
mstubbs@crs.loc.gov, 7-8707
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