Program (BCAP) July 1, 2009

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1 Biomass Crop Assistance Program (BCAP) Opportunities i and dchallenges July 1, 2009

2 Biomass Crop Assistance Program (BCAP) Overview Authorized by Section 9011 of the 2008 Farm Bill. Excerpts of 2008 Farm Bill on BPA Website Program Purpose: Support the establishment and production of crops for conversion to bio-energy in project areas and to assist with the collection, harvest, storage and transportation (CHST) of eligible material for use in biomass conversion facilities. Focus today is on CHST exclusively.

3 BCAP Overview BCAP is expedited as part of the Presidential Directive to USDA to Expand Access to Biofuels, May 5, The Directive mission is to increase the availability of renewable biomass to the renewable fuels market. Among the many goals of our directive: Guidance and support for collection, harvest, storage, and transportation assistance for eligible materials for use in biomass conversion facilities.

4 CHST Subsidy Overview Administered by Commodity Credit Corporation $1 for each $1 per dry ton paid by the CHST qualified biomass conversion facility to owner for delivery of eligible material in an amount not to exceed $45 per dry ton. 2 year maximum Eligible material owner is person having right to collect or harvest eligible material and has delivered the eligible material to a CHST qualified biomass conversion facility. Includes both public and private lands. Biomass conversion facility includes heat, power, bio based products. Not just electricity! Eligible material means renewable biomass (different from eligible crop) Renewable biomass is defined in 2008 Farm Bill

5 BCAP Current Status A Notice of Funds Availability (NOFA) was published in the Federal Register June 11 th, The NOFA provides policies and processes for (1) ()providing gpayments for the collection, harvest, storage, and transportation of eligible material to qualified biomass conversion facilities i and (2) qualifying i CHST biomass conversion facilities.

6 BCAP Collection, Harvest, Storage and Transportation (CHST) County FSA Office USDA/FSA Washington D.C. State FSA Office CHST-Qualified BCF Steps CHST-qualification of BCF Eligible Material Owner s Initial Application Delivery and sale of Eligible Material Eligible Material Owner Completes Application CHST Matching Payment Issued Eligible Material Owner 4

7 Step 1. CHST-qualification of BCF Biomass Conversion Facility y( (BCF) owners or managers of the facility must complete and submit a Memorandum of Understanding (MOU) to become a CHST-Qualified BCF. A MOU template will be posted on the USDA BCAP website for download and submission. A CHST-qualified BCF must produce heat, power, bio-based productsor or advancedbiofuels, or anycombinationsof of these items from Eligible Material (renewable biomass); and The CHST-qualified BCF is added to National List posted on BCAP website and the county offices.

8 Step 1. CHST-qualification of BCF (cont ) Agree to purchase Eligible ibl Material (renewable biomass) from eligible owners only on a $ per dry-ton equivalent basis; Have access to certified commercial freight scales Operate the facility in compliance with all applicable Federal, State, and local environmental, and occupation and safety, laws and regulations and ordinances; and Develop and maintain an applicable purchase list spreadsheet and make them available to USDA/FSA. Each facility must complete the form for Biomass Conversion Facility Overview posted on the BCAP website.

9 Step 2. Eligible Material Owner (EMO) submits Initial i lapplication i EMO arranges for sale and delivery of eligible material to CHST-qualified BCF; and EMO initiates the application at the USDA FSA County office where the eligible material (renewable biomass) is to be harvested. The FSA County office will verify that the biomass conversion facility is CHST-qualified.

10 Step 3. Delivery and Sale of Eligible Material il EMO sells and delivers eligible material to CHST-qualified BCF; BCF owner or manager issues invoice with signature. Invoice will contain elements specific to the renewable biomass purchase including type of eligible material, net weight in dry-ton, date of delivery, total payment, and price per dry ton paid.

11 Step 4. EMO Completes Application EMO returns to the County Office where initial application was submitted and approved; and Submits the required documentation, including the invoice from the CHST-Qualified Biomass Conversion Facility.

12 Step 5. CHST Matching Payment Issued County Office Commission (COC) reviews the completed application for matching payment submitted by the EMO. COC verifies the delivery. CHST Matching Payment issued to EMO. Note: The matching payments will never be issued to a BCF, but EMO can assign payments to BCF.

13 Implementation Schedule NOFA comments are being collected until August 10, Please submit comments to gov; Fax ; or mail FSA/USDA, ATTN: Mike Linsenbigler, Acting Director, Conservation and Environmental Programs Division, STOP 0513, 1400 Independence Ave., SW, Washington, DC BCAP regulations are expected to be published in the Federal Register in the near future.

14 Unresolved Issues Funding levels Funding of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section such sums as are necessary for each of fiscal years 2008 through Scope of Program Will biopower lose out to biofuels?

15 BCAP The BCAP website is at: Sign up for BCAP updates at USDA website.