USDA opens application window for biofuel funding programs
The USDA announced March 14 that it is now accepting applications for three funding programs related to biofuel production—the Biorefinery Assistance Program, the Repowering Assistance Program and the Bioenergy Program for Advanced Biofuels. Secretary of Agriculture Tom Vilsack said the funding provided through these programs— loan guarantees for new or retrofitted biorefineries, financial assistance for fuel switching from fossil fuels to renewable biomass, and payments to reward the production of advanced biofuels—will result in job creation and assist in the United States’ goal to become energy independent. “These investments will help spur new technologies that will enable us to reduce reliance on fossil fuels and build a strong renewable energy industry in rural America that will enable our nation to ‘out-innovate’ its competitors,” he said.
Approximately $463 million is available for loan guarantees in fiscal year (FY) 2011 under the Biorefinery Assistance Program. The program is meant to assist in developing and constructing commercial-scale biorefineries and to retrofit existing facilities to produce advanced biofuels using previously defined eligible technologies. In January, the USDA awarded three cellulosic ethanol projects, representing 73 MMgy of ethanol, $405 million in loan guarantees under the FY 2010 funding program. The latest round of applications is expected to result in approximately 4-5 projects receiving loan guarantee awards, according to the USDA. Applications must be filed by May 10. The agency anticipates awarding loan guarantees on Sept. 30. Instructions for submitting applications are available at www.rurdev.usda.gov/BCP_Biorefinery.html.
Biorefinery operators seeking to convert their fuel intake from fossil fuels to renewable biomass may apply to receive financial assistance for the project through the Repowering Assistance Program. The USDA is making approximately $25 million available in FY 2011 to aid producers in replacing fossil fuel systems with biomass systems, including costs associated with equipment, installation, engineering, design, site plans, professional fees, permits and financing fees.
There are several criteria applicants must meet before they are eligible for funding. Among them, the facility must have been in existence on June 18, 2008, and the project must be anticipated to reduce annual fossil fuel use by at least 40 percent. The amount of payments made to producers through the program is capped at $5 million per facility and will be determined by the percentage reduction in fossil fuel usage and the cost of the renewable biomass system. Applications for funding will be accepted until June 9. For more information, including application instructions, visit the USDA's Repowering Assistance Program information page.
Finally, advanced biofuels producers have until May 10 to apply for their share of $85 million made available in FY 2011 through the Bioenergy Program for Advanced Biofuels. The program subsidizes the production of advanced biofuels produced using virtually any form of renewable biomass other than corn kernel starch. In January, the USDA delivered more than $15 million of FY 2010 funds to approximately 120 companies to support their production of advanced biofuels. Various ethanol companies received financial support for their production ethanol from feedstocks such as milo and sorghum.
According to the USDA, no more than 5 percent of FY 2011 funds allocated for the advanced biofuels program will be made available to producers whose facilities have operating capacities greater than 150 MMgy. Otherwise, there is no minimum or maximum amount of funding that a producer can receive under the program. Payments will be determined based on the number of program participants, the amount of advanced biofuels produced from Oct. 1, 2010 through Sept. 30, 2011, and the amount of funds available. Applications for the program may be obtained from the USDA Rural Development Energy Coordinator for the state in which the facility is located. Contact information for each coordinator can be found here.