WPAC responds to U.S. BCAP proposed rules

Apr. 8, 2010 – The Wood Pellet Association of Canada (WPAC) has responded to the
U.S. Department of Agriculture (USDA)’s request for comments on the new
proposed rules for its Biomass Crop Assistance Program (BCAP). After the
USDA implemented BCAP in October 2009, U.S. wood pellet producers
began receiving a subsidy of up to $45/ton for raw materials. This subsidy gave
U.S. producers a significant advantage over Canadian producers in all global
markets. U.S. producers were unfairly able to take market share from
Canadians. Moreover, U.S. producers began dumping pellets into Canada because,
with the subsidy, they could unfairly undercut Canadian producers selling within
Canada.

The Composite Panel Association (CPA), among others, have strenuously objected to
BCAP. CPA members who make medium-density fibreboard and particle board saw
their raw material prices skyrocket, putting thousands of unsubsidized jobs at
risk.

In
February 2010, the USDA suspended BCAP, proposed new rules
to guide the program, and gave until April 9, 2010, to receive
comments. After considering the comments, the USDA will develop final rules and re-implement BCAP.

To that end, WPAC board members met in Ottawa with policy advisors to Canadian
ministers of international trade (Hon. Peter Van Loan) and natural resources
(Hon. Christian Paradis) to express concerns about BCAP and to urge the
Canadian government to respond. The WPAC's board also sent a letter explaining their concerns
to Robert Stevenson at the USDA, who
is the director responsible for BCAP. Copies of the letter were also
sent to the appropriate Canadian ministers.