USDA programs help biofuels producers

By Hope Deutscher | August 10, 2009
In response to a request by President Barack Obama to expedite the implementation of programs to assist the development of biofuels, the USDA has moved forward with several 2008 Farm Bill provisions that could serve to benefit ethanol producers.

The Repowering Assistance Program provides $35 million in fiscal year 2009, and authorized $15 million of that funding for fiscal years 2009 through 2012, to provide payments to biorefineries to replace fossil fuel-derived heat and power with renewable biomass systems. To receive funds, a biorefinery must have been in existence at the time the 2008 Farm Bill was passed. The USDA is accepting applications for the competitive program until Nov. 1.

Recipients of loan guarantees via the Loan Guarantees for Biorefineries Program are expected to be named Sept. 15. Guarantees will be awarded to applicants using second- and third-generation biofuels technologies to produce a variety of renewable fuels, including cellulosic ethanol and methane gas.

The USDA has also agreed to spend $30 million to pay eligible agriculture producers to support and expand production of advanced biofuels as part of its plan to encourage production of next-generation biofuels.

Through the Rural Energy for America Program, the USDA will accept applications for renewable fuel energy systems and efficiency improvement feasibility studies, loan guarantees and grants, as well as applications for conducting energy audits on behalf of agriculture producers and rural small businesses.

The Biomass Crop Assistance Program will provide financial assistance to producers or entities that deliver eligible biomass material to designated biomass conversion facilities for use as heat, power, biobased products or biofuels. Initially, assistance will be given for the collection, harvest, storage and transportation costs associated with the delivery of eligible materials. According to the USDA, for up to two years producers or entities will be eligible for up to a dollar per dollar match, up to $45 per dry ton, for the value of the biomass delivered to a designated biomass conversion facility.

Recently, BCAP's implementation was expedited and the program start date was moved up to 2010. The USDA's Farm Service Agency will move forward on fully implementing BCAP later this year. As the program grows, FSA county offices will educate and assist producers and facilities on how to participate. It is not known how many project sites will be chosen.

On June 25, the Minnesota Project hosted a webinar focused on BCAP. Presenter Joel Tallaksen, who is also the gasification project coordinator at the University of Minnesota-Morris, said one of BCAP's major benefits is that it promotes sustainable land use. In addition, Tallaksen said the program also can help the biomass market grow, providing stable revenue sources and reasonably priced biomass for consumers. "One of the biggest things we'll have to do is form a biomass market," he said. "It's hard to get new facilities to start up, unless they know there's a market out there."

The USDA is working on some technical assistance issues and developing regulations relating to the issuance of producer contracts and BCAP project areas, said Kelly Novak, program analyst for the USDA Farm Service Agency. The agency is also conducting an environmental impact study; however, she said everything should be completed by the 2010 start date.