USDA Unveils Plans To Help Fund Non-Corn Biofuel Production

USDA has unveiled plans to help propel non-corn-based, "advanced" biofuel from small, or pilot, production levels to commercial-scale output through loans and subsidies.

USDA has unveiled plans to help propel non-corn-based, "advanced" biofuel from small, or pilot, production levels to commercial-scale output through loans and subsidies.

The new programs, required in the 2008 farm bill, are also "part of the strategy to help meet President Obama's goal to accelerate the commercial production of advanced biofuels and create a viable alternative fuels industry," said Agriculture Secretary Tom Vilsack.

Most of the biofuel currently produced on a commercial scale in the United States is ethanol made from corn starch, but producers are exempt from the subsidies and loans.

Instead, the government help is aimed at those who want to produce biofuels from cellulosic material such as switchgrass or corn stover — husks and other leftover material from corn crops — according to Jeffrey Steiner, the senior advisor for biofuels at USDA.

Under the Biorefinery Assistance Program, USDA would provide loans of up to $250 million "to develop and construct commercial-scale biorefineries." Through the Repowering Assistance Payments program, USDA would pay up to $5 million for refineries to "install new systems that encourage renewable biomass energy use and replace fossil fuels." A third program, The Bioenergy Program for Advanced Biofuels, would set up payments for advanced biofuel refineries.

About 10.6 billion gallons of subsidized corn-based ethanol was produced in the United States last year. The government paid out roughly $4.8 billion last year in tax credits to companies that blend ethanol into gasoline.

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