LegiStorm

Summary:

The Biomass Crop Assistance Program (BCAP) is designed to assist the bioenergy industry to overcome the hurdle of continuous biomass availability—viewed as a critical deterrent to private sector investment in the cellulosic biofuels industry. To accomplish this, BCAP is charged with two tasks: (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 (CHST) of eligible material for use in a biomass conversion facility. BCAP was created in 2008 by the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, 2008 farm bill), shortly after Congress had vastly expanded the usage mandate for renewable fuels, including cellulosic biofuels in the Energy Security and Independence Act of 2007 (EISA, P.L. 110-140). BCAP was envisaged as a mechanism for jump-starting the production of cellulosic feedstock for what was expected to be a rapidly expanding industry. The 2014 farm bill (Agricultural Act of 2014; P.L. 113-79) extends BCAP through FY2018, but with a number of changes aimed at limiting program costs. BCAP is administered by the U.S. Department of Agriculture's (USDA's) Farm Service Agency (FSA). BCAP provides two categories of financial assistance: (1) annual and establishment payments that share in the cost of establishing and maintaining production of eligible biomass crops; and (2) matching payments that share in the cost of the collection, harvest, storage, and transportation (CHST) of biomass to an eligible biomass conversion facility. BCAP assistance for establishing and producing biomass crops is available within designated project areas. BCAP project areas are specific geographic areas where producers may enroll land into BCAP contracts and produce specified biomass crops. Under the 2008 farm bill, BCAP was authorized to receive such sums as necessary, meaning that funding for BCAP was both mandatory through the borrowing authority of USDA's Commodity Credit Corporation and open-ended since it depended on program participation. However, Congress imposed an upper limit on BCAP funding from FY2010 through FY2012 through appropriations bills. No funds were available for BCAP for FY2013. In fashioning the 2014 farm bill, Congress made a number of changes to BCAP. Standing out among the changes was a hard cap on the program's mandatory authorization level. The 2014 farm bill replaced the open-ended authorization for BCAP in the 2008 farm bill with a cap of $25 million per year of mandatory funding for FY2014 through FY2018. Congress has further limited BCAP through appropriations bills, with the result that outlays under the program have declined steeply since peaking at nearly $250 million in FY2010. In December 2014, Congress passed the Consolidated and Continuing Appropriations Act, 2015 (P.L. 113-235), which imposed an upper limit of $23 million in funding for BCAP for FY2015. In part, these changes reflect the much slower-than-expected pace at which the cellulosic biofuels industry has developed. Concerns that arose in the early years after BCAP was authorized—for example, that it could heighten competition over eligible woody biomass, thus raising the price of that material to the detriment of traditional users, such as nurseries and others, and that the by-product of paper production, "black liquor," could qualify for CHST matching payments—have been addressed, and so have become less acute. Some have argued the payments are largely unnecessary and therefore wasteful. An ongoing issue is that while BCAP's primary purpose is to facilitate the development of an expanding, commercial-scale cellulosic biofuel industry by helping it meet its feedstock challenges, numerous headwinds continue to retard the development of that industry.