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Comment on rules for USDA renewable energy programs

Posted: April 19, 2010 at 11:18 AM CST

The comment period was opened April 16 on another set of rules to administer renewable energy programs, this time by the USDA. While not quite in the same league as the renewable fuel standard, a close review of the proposed rules will be important. Making these programs useable by first and second generation ethanol producers is important—and sometimes, only those that want to use the programs can spot the fatal flaws and unintended consequences of some rules.

The three renewable energy programs will be administered by USDA Rural Development:

The USDA is proposing a rolling application process for the Biorefinery Assistance Program, a loan guarantee program to develop and construct commercial-scale advanced biofuel plants, and to retrofit existing facilities. The agency proposes a maximum $250 million loan guarantee, not to exceed 80 percent of the total.

Existing plants with thoughts of using biomass power in place of fossil fuels, will want to check out the proposed rules for the Repowering Assistance Payments. It would include an initial payment for up to 50 percent of the cost of installation, up to $5 million, to eligible biorefineries. The remaining payment would be based on the amount of energy produced from renewable biomass.

The Bioenergy Program for Advanced Biofuels would establish payments for advanced biofuel production, excluding that from corn kernel starch. The question will be just how this might impact feedstocks such as milo, barley, sugar cane, wheat. The U.S. EPA promised to publish its assessment of the GHG impact of alternate feedstocks later this year. Their findings will have an impact, no doubt, on just how many existing ethanol producers will be seriously interested in this program. Unfortunately, this one leaves corn ethanol out—although the other two programs might be of interest.

To learn more about the programs visit: http://www.rurdev.usda.gov/rbs/busp/9005Biofuels.htm

-Susanne Retka Schill