USDA Meets Biofuels Deadline

Responding to President Obama’s directive to expedite and increase the production of biofuels, USDA met its 30-day deadline to help produce more energy from homegrown, renewable sources, Agriculture Secretary Tom Vilsack recently announced.

“Further developing the biofuels industry helps create jobs and stimulates rural economies, an important part of getting our economy back on track,” Vilsack says. “President Obama and I are committed to advancing clean and renewable energy as it creates jobs domestically and boosts tax revenues at all levels of government.”

On May 5, President Obama asked USDA to expedite the biofuels provisions of the energy title of the 2008 farm bill within 30 days, including the following:

  • Providing loan guarantees and grants for biorefineries;
  • Expediting funding to encourage biorefineries to replace the use of fossil fuels in plant operations;
  • Expediting funding to encourage production of next-generation biofuels;
  • Expanding the Rural Energy for America Program; and
  • Providing guidance and support for collection, harvest, storage, and transportation in biomass conversion facilities.

Details about USDA’s recent efforts to support the biofuels industry are:

• Loan guarantees for biorefineries. USDA is currently reviewing a $25 million loan guarantee application to retrofit a biodiesel refinery to produce second-generation biofuels. The funding of this venture will be the second such guarantee to be funded under the 2008 farm bill.

In January, USDA awarded an $80 million loan guarantee for the production of cellulosic ethanol. A second round of applications received as part of an April 30, 2009, solicitation for applications is currently under review. These involve second- and third-generation biofuel technologies to produce cellulosic ethanol, biodiesel, and methane gas and electricity. Awards for the second round are projected for Sept. 15, 2009.

• Assistance for biorefineries replacing fossil fuels. USDA will provide up to $20 million to offer financial assistance to biorefineries to replace fossil fuels used to produce heat or operate biorefineries with renewable biomass.

• Encourage production of next-generation biofuels. USDA will provide $30 million to provide payments to eligible agricultural producers to support and ensure an expanding production of advanced biofuels.

• Rural Energy for America Program. USDA is now accepting applications for feasibility studies, loan guarantees, and grants for renewable energy systems and energy efficiency improvements as well as for applications to conduct energy audits on behalf of agriculture producers and rural small businesses.

Funds will be used to assist agricultural producers and rural small businesses by conducting energy audits and providing recommendations and information on renewable energy development assistance and improving energy efficiency.

These projects — energy audits and renewable energy systems development/energy efficiency improvements assistance — are designed to help agricultural producers and rural small businesses reduce energy costs and consumption and help meet the nation’s critical energy needs.

For more information on this program and application deadlines, go to www.rurdev.usda.gov.

• Biomass Crop Assistance Program. USDA is launching a program that will provide compensation for the collection, harvest, storage, and transportation of biomass intended to meet the country’s energy needs in a more sustainable manner.

The program will provide financial assistance for delivery of eligible biomass material to conversion facilities that use biomass for heat, power, bio-based products or biofuels.

USDA, through the Farm Service Agency, will provide matching payments for collecting, harvesting, storing and transporting eligible materials at a rate of one dollar for each dollar per dry ton paid by a qualified biomass conversion facility for the biomass. The matching payments will not exceed $45 per ton and material providers will be eligible for up to two years of payments.

For more information on this program, go to www.fsa.usda.gov/energy.

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