On December 15, 2010, the Farm Service Agency (FSA) division of the U.S. Department of Agriculture (USDA) released several key documents to allow interested parties to apply for participation in the Biomass Crop Assistance Program (BCAP).

BCAP pays incentives to owners and operators of agricultural and forest lands to produce new sources of biomass materials for energy production without diverting biomass materials from existing markets. (Click here to read our earlier legal alert on the topic.) Although BCAP briefly ran as a pilot program in 2009 and early 2010, final regulations were published in the Federal Register on October 27, 2010 that implemented the program on a more permanent basis.

This week, FSA posted on its Web site documents necessary to implement BCAP, including:

  • A pro forma Application and Agreement for Approval as a Qualified Biomass Crop Conversion Facility. Once submitted by an applying biomass conversion facility, and once approved and executed by the FSA, this contract will govern the qualifying biomass conversion facilities’ rights and responsibilities under BCAP.
  • A Biomass Conversion Facility Overview form (BCAP-1), plus accompanying instructions. The BCAP-1 form will be used by biomass conversion facilities to qualify to participate in the matching payments component, and by BCAP project sponsors (which can include biomass conversion facilities) to provide information for their project area proposals under the establishment and annual payments component.
  • A BCAP Project Area Proposal Submission (BCAP-20), plus accompanying instructions. Project sponsors under the establishment and annual payments component will use the BCAP-20 to provide information required for review of project proposals.
  • A BCAP Project Area Proposal Estimates form (BCAP-21), plus accompanying instructions. Project sponsors under the establishment and annual payments component will use the BCAP-21 to provide information about the volume of biomass material a BCAP project area is expected to yield, along with other criteria the FSA will weigh to determine the appropriateness of designating a project area.
  • A BCAP Project Area Environmental Screening Worksheet (BCAP-22), plus accompanying instructions. Sponsors of a proposed BCAP project area use this form to assist FSA in complying with certain environmental laws and regulations, including the National Environmental Policy Act and the National Historic Preservation Act.

Although the release of these applications was critical to allow interested parties to participate in the program, several key questions regarding BCAP’s implementation remain—particularly new requirements that were not part of the pilot version of the program. For instance, it is not clear how eligible material owners or project sponsors will demonstrate that a conservation plan, forest stewardship plan, or equivalent plan was followed. It also is unclear how FSA will determine or verify that the price paid by qualifying biomass conversion facility constitutes a “fair market price.” We will continue to monitor additional guidance on BCAP as provided by FSA.


 

 

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