Fed Incentives Could Help Biomass Suppliers, Customers

John Davis

While the idea of providing biomass to biorefineries and power plants seems like an idea that has some profit potential, some suppliers, and more accurately, potential suppliers, might find the prospect a bit daunting.

Biomass Power and Thermal Magazine
says folks who want to become involved in the biomass supply chain can get some help on how to use federal incentives to maximize their profit potentials during a seminar at the upcoming 2011 International Biomass Conference & Expo, May 2-5 in St. Louis, Mo. Timothy Baye, a business development professor at the University of Wisconsin-Extension, will be speaking on the subject:

“It’s all about risk,” Baye said “It’s all going to be about managing the perceived risk, especially in response to the due diligence requirements of commercial debt. Commercial debt is still going to drive the process.”

“Recognize that you may have drunk the Kool-Aid,” Baye said, “but the equity and debt markets haven’t necessarily come from the same punch bowl.”

With commercial debt, in addition to equity potentially coming back as a hedge to help finance biomass projects, prospective developers will likely lean on federally driven incentives, such as the Biomass Crop Assistance Program, which encourages greater volumes of biomass to enter the supply chain and increases the various types that can contribute to downstream products. Created in the 2008 Farm Bill and swiftly implemented as a pilot program, BCAP was designed to stimulate new crops for renewable energy feedstocks. The biomass industry has since seen several revisions and amendments specifically as it relates to guidance on what types of biomass qualify under the program, how suppliers and biomass conversion facilities (BCFs) are paid and other measures such as appropriate land stewardship practices for aggregating various types of feedstock.

Daniel Simon, partner with Washington, D.C.-based law firm Ballard Spahr Andrews & Ingersoll LLP, will explain where BCAP stands in terms of how biomass suppliers and their customers can capitalize on the prescribed benefits.

For more information and registration, just go to the conference’s website, www.biomassconference.com.

biomass, Government