Biomass Report details new draft rules for BCAP Program

The Wood Biomass Market Report commented that new “draft” rules announced by the Farm Services Agency for the Biomass Crop Assistance Program (BCAP) come closer to providing assurances that wood for higher-value products will not be diverted for use as biomass. The Report, published monthly by RISI, the leading information provider for the global forest products industry, has reported since the program’s inception last year on the concern among traditional forest products players that BCAP would drive up prices for composite panel furnish, OSB raw material, pulpwood and even some low-grade sawlogs.

The Report also stated that payments made through the BCAP program are just now flowing to the market in earnest from a $517 million allocation that is good through March 31, 2010. While these payments do not appear to have had adverse effects to date on pulp and panel producers, this is due almost solely to market conditions and should not be a signal as to the true effect the BCAP program could have if new rules are not enacted.

William Perritt, executive editor of the Wood Biomass Market Report, said, “It appears the FSA is finding a deeper understanding of the possibly damaging cross-currents BCAP may have in wood markets. The recent draft rule at least makes an attempt to establish a wall between true wood biomass and the fiber sources more suited to higher and better use at both wood-based panel and pulp mills.”

RISI has also recently published a study on wood biomass policies in the United States and Europe entitled 2010 Wood Biomass Policy Review.