BIOMASS HUB

The USDA provides funding for biomass-related projects through Title IX of the 2008 Farm Bill.  Most recently, Agriculture Secretary Tom Vilsack invited public comment on several proposed rules designed to increase the production of advanced biofuels and the development of biorefineries.

The proposed rules affect the Biorefinery Assistance Program, Repowering Assistance Payments and the Bioenergy Program for Advanced Biofuels.

Biorefinery Assistance Program

This provision provides loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries, and grants to help pay for the development and construction costs of demonstration-scale biorefineries.  Under the proposed rule, USDA Rural Development proposes a rolling application process for the consideration of loan guarantee requests.  The Agency will consider a technology that is being adopted in a viable commercial-scale operation that produces advanced biofuels. Under the proposed rule, the maximum loan amount will be $250 million; there is no minimum amount.  The amount of a loan guarantee for a project will not exceed 80 percent of the total eligible project costs.

Repowering Assistance Payments

This provision provides for payments to biorefineries (that were in existence at the time the 2008 Farm Bill was passed) to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass.  Under the proposed rule, USDA Rural Development will propose procedures for eligible biorefineries to receive a payment equal to 50 percent of the cost of installing eligible systems, up to $5 million, whichever is less.  There is no minimum payment amount.  The initial payment would be a percentage of the cost of installing eligible systems. The remaining payment would be based on the amount of energy produced from renewable biomass.

Bioenergy Program for Advanced Biofuels

This provision provides for payments to be made to eligible agricultural producers to support and ensure an expanding production of advanced biofuels.  USDA Rural Development is proposing to establish a payment program for eligible producers of advanced biofuels. To be eligible for payments, advanced biofuels must be produced from renewable biomass, excluding corn kernel starch. USDA would enter into contracts with advanced biofuels producers to support and ensure an expanding production of advanced biofuels.

Additional information on the proposed rules and instructions on how the public can offer comments are available in the April 16, 2010 Federal Register.