32 pagesOregon’s Biomass Producer or Collector (BPC) Tax
Credit encourages the production, collection, and
transportation of biomass for biofuel production.
It helps offset the transportation costs for biomass
producers and collectors for a variety of bioenergy
feed stocks by paying a set rate per unit of material
delivered to a qualified bioenergy facility. This report
is intended to help evaluate the effects of the
tax credit on the Oregon’s wood fuel market and
Oregon’s economy more broadly.This working paper was completed in response to a request from the Oregon Department of
Energy. We thank John Pine and Andrew Herstrom with the Oregon Department of Forestry,
and Gail Krumenauer with the State of Oregon Employment Department for their support
through this project

Krumenauer, Matt

MacFarland, Kate

Moseley, Cassandra

Nielsen-Pincus, Max

University of Oregon Scholars' Bank

Impacts of the biomass producer or collector tax credit on Oregon's wood fuels market and economy

2 pagesIn recent years, federal and state governments across the United States have sought to foster the development
of renewable energy using a variety of policies. One such program is Oregon’s Biomass
Producer or Collector (BPC) tax credit, which encourages the production, collection, and transportation
of biomass for biofuel production. Relatively little is known about how policies such as the BPC tax credit
affect woody biomass utilization, making it difficult to know which policies are the most effective at fostering
biomass energy development. This briefing paper reports the results of an evaluation of the effects of the
BPC tax credit on the Oregon’s wood fuel market and economy.This briefing paper was made possible with funding from the Oregon Department of Energ

Ecosystem Workforce ProgramINSTITUTE FOR A SUSTAINABLE ENVIRONMENT5247 University of OregonEugene OR 97403-5247T 541-346-4545  F 541-346-2040ewp@uoregon.edu • ewp.uoregon.edu	 B R I E F I N G 	 P A P E R 	 N U M B E R 	 2 2 , 	 S P R I N G 	 2 0 1 0 	IMPACTS OF THE BIOMASS PRODUCER OR COLLECTOR TAX CREDIT ON OREGON’S WOOD FUELS MARKET AND ECONOMYMAX NIELSEN-PINCUS, MATT KRUMENAUER, KATE MACFARLAND, AND CASSANDRA MOSELEYIn	recent	years,	federal	and	state	governments	across	the	United	States	have	sought	to	foster	the	de-velopment	of	renewable	energy	using	a	variety	of	policies.	One	such	program	is	Oregon’s	Biomass	Producer	or	Collector	(BPC)	tax	credit,	which	encourages	the	production,	collection,	and	transportation	of	biomass	for	biofuel	production.		Relatively	little	is	known	about	how	policies	such	as	the	BPC	tax	credit	affect	woody	biomass	utilization,	making	it	difficult	to	know	which	policies	are	the	most	effective	at	fostering	biomass	energy	development.		This	briefing	paper	reports	the	results	of	an	evaluation	of	the	effects	of	the	BPC	tax	credit	on	the	Oregon’s	wood	fuel	market	and	economy.ApproachWe developed statistical models to forecast the price of wood fuels and the volume of forest biomass used in the wood fuels market and com-pared them to actual volume and prices before and after the BPC tax credit was implemented.  We then developed economic impact models of forest biomass production based on biomass pro-duction cost data from the Oregon Department of Forestry and a financial survey of biomass pro-ducers who applied for the credit.FindingsApproximately 85 percent of the BPC tax credit in 2010 was awarded to collectors of forest bio-mass from logging slash or stewardship projects, offering $10 per green ton of forest biomass delivered to bioenergy facilities.  Forest biomass certified by the BPC tax credit program in 2010 traveled an average of over 100 miles from forest to bioenergy facility.  Our analysis of the BPC tax credit indicates the program has: 1. Helped prices in the wood fuels market                   remain competitive  2. Supported between 32 and 73 Oregon jobs             in 2010 3. Created more economic activity than the        program costs in foregone tax revenue.BPC tax credit effects on the wood fuel market.  The start of the BPC tax credit program in 2007 coincided with a severe recession and crash in the housing and forest products markets. The reduced availability of mill residuals for bioen-ergy feedstocks increased the demand for forest biomass. Our research suggests that the BPC tax credit likely affected the wood fuels market by preventing higher feedstock prices and lower market volumes that would have otherwise oc-curred. The tax credit likely improved the margin B R I E F I N G  P A P E R  N U M B E R  3 3F A L L 	 2 0 1 1	 E C O S Y S T E M 	 WO R K F O R C E 	 P R O G R A M 	 B R I E F I N G 	 P A P E R 	 N U M B E R 	 3 3 , 	 F A L L 	 2 0 11 	on forest biomass production. Forest biomass volume increased between 100,000 and 190,000 bone dry tons (BDT) more than the forecast mod-els predicted for 2007 – 2010, and prices were about $7 per BDT less than predicted after the BPC tax credit became available. Funding from the USDA Biomass Crop Assistance Program and American Recovery and Reinvestment Act are other likely contributors to these trends in the wood fuels market. The BPC tax credit and these other government interventions appear to have been successful in incentivizing bioenergy production from forest biomass.  Economic impacts of the BPC tax credit on Oregon’s economy.  At a time of high unemploy-ment, government budget deficits, and market weakness, the BPC tax credit appears to be an economic lever that has incentivized more economic activity than it cost.  Our research indicates that collection and delivery of biomass under the BPC tax credit program created an average of about five jobs, nearly $250,000 in wages and benefits, and over $850,000 in to-tal economic activity per 10,000 BDT of forest biomass.  Based on the Oregon Department of Energy’s (ODOE) accounting of certified tax cred-its for 2010, and our economic impact and wood fuels market models, we estimate that the forest biomass portion of the tax credit program likely supported between 32 and 73 jobs in Oregon in 2010, and approximately 11 to 24 percent of the forest biomass portion of the wood fuels mar-ket.  The results also indicate that BPC tax credit program, independent of other policy incentives, likely generated at least as much value for Or-egon’s economy as the program cost in foregone tax revenues, and may have produced up to 2.4 times more value for Oregon’s economy than it cost.More InformationThe complete report, EWP Working Paper #32, “Impacts of the Biomass Producer or Collector Tax Credit on Oregon’s Wood Fuels Market and Economy”  is forthcoming on the web at ewp.uoregon.edu.This briefing paper was made possible with funding from the Oregon Department of Energy.           The	University	of	Oregon	is	an	equal-opportunity,	affirmative-action	institution	committed	to	cultural	diversity	and	compliance	with	the	Americans	with	Disabilities	Act.		This	publication	will	be	made	available	in	accessible	formats	upon	request.		Design:	Tim	Jordan,	Design	and	Editing	Services.	©	2011	University	of	Oregon.		

Impacts of the biomass producer or collector tax credit on Oregon's wood fuels market and economy

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