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Renewable Energy Programs and the
Farm Bill: Status and Issues
Randy Schnepf
Specialist in Agricultural Policy
September 7, 2011
Congressional Research Service
7-5700
www.crs.gov
R41985
CRS Report for Congress
Pr
epared for Members and Committees of Congress
c11173008
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Renewable Energy Programs and the Farm Bill: Status and Issues
Summary
U.S. Department of Agriculture (USDA) renewable energy programs have been used to
incentivize adoption of renewable energy projects including solar, wind, and anaerobic digesters.
However, the primary focus of USDA renewable energy programs has been to promote U.S.
biofuels production and use—including corn starch-based ethanol, cellulosic ethanol, and
soybean-based biodiesel.
The 2002 farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171) was the first
omnibus farm bill to explicitly include an energy title (Title IX). The energy title authorized
grants, loans, and loan guarantees to foster research on agriculture-based renewable energy, to
share development risk, and to promote the adoption of renewable energy systems. The 2002
farm bill was followed by two major energy bills (the Energy Policy Act of 2005, P.L. 109-58;
and the Energy Independence and Security Act of 2007, P.L. 110-140), which established and
expanded a national biofuels mandate along with several other renewable energy programs.
The 2008 farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246) built on the 2002
farm bill as well as the previous renewable energy legislation, but refocused biofuels policy
initiatives in favor of non-corn feedstocks, especially cellulosic-based feedstocks, in response to
growing concerns about the emerging spillover effects of increasing corn use for ethanol
production. Like the 2002 farm bill, the 2008 farm bill contains a distinct energy title (Title IX)
that significantly expands the number and types of programs available to support renewable
energy production and use. In addition, new renewable-energy provisions were included in the
rural development (Title VI), research (Title VII), livestock (Title XI), and tax (Title XV) titles of
the 2008 farm bill.
The 2008 farm bill authorized $1.1 billion in mandatory funding for energy programs for FY2008
through FY2012, compared with $800 million in the 2002 farm bill (FY2002-FY2007).
Mandatory authorization in the 2008 farm bill includes $320 million to the Biorefinery Assistance
Program, $300 million to the Bioenergy Program for Advanced Biofuels, and $255 million to the
Rural Energy for America Program (REAP). The Biomass Crop Assistance Program (BCAP) is
authorized to receive such sums as necessary (i.e., funding is open-ended and depends on
program participation). Discretionary funding in the 2008 farm bill totaled $1.7 billion (including
$600 million for the Biorefinery Assistance Program), compared to $245 million in the 2002 farm
bill. However, all discretionary program funding is subject to the annual appropriations process,
which may or may not appropriate funds due to budget constraints. Actual discretionary
appropriations to Title IX energy programs have been substantially below authorized levels
through FY2011.
Implementation of the farm bill’s energy provisions is ongoing. President Obama, in May 2009,
directed USDA and the Department of Energy (DOE) to accelerate implementation of renewable
energy programs. Notices, proposed rules, and final rules have appeared in the Federal Register
soliciting applications for those programs with available funding. The primary energy-related
issue for the next farm bill is the expiration at the end of FY2012 and lack of baseline funding
going forward for all major energy-related provisions of Title IX. In addition, the appearance of
substantial redundancy across renewable energy programs at USDA and DOE, the slow
development of the U.S. cellulosic biofuels sector, and concerns about the emerging spillover
effects of increasing corn use for ethanol production are issues that are likely to emerge during
the next farm bill debate.
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Renewable Energy Programs and the Farm Bill: Status and Issues
Contents
Overview.......................................................................................................................................... 2
Origins of Federal Biofuels Policy ............................................................................................ 2
First Farm Bill Energy Title—2002........................................................................................... 3
2008 Farm Bill Focus on Non-Corn-Based Biofuels ................................................................ 4
Funding for Agriculture-Based Energy Programs ..................................................................... 5
Major Energy Provisions in the 2008 Farm Bill.............................................................................. 6
Title IX—Energy Provisions ..................................................................................................... 6
Section 9001: Definitions.................................................................................................... 6
Section 9002: Biobased Markets Program .......................................................................... 7
Section 9003: Biorefinery Assistance Program (BAP) ....................................................... 8
Section 9004: Repowering Assistance Program (RAP) ...................................................... 9
Section 9005: Bioenergy Program for Advanced Biofuels ............................................... 10
Section 9006: Biodiesel Fuel Education Program............................................................. 11
Section 9007: Rural Energy for America Program (REAP).............................................. 12
Section 9008: Biomass Research and Development Initiative (BRDI)............................. 15
Section 9009: Rural Energy Self-Sufficiency Initiative .................................................... 16
Section 9010: Feedstock Flexibility Program (FFP) for Bioenergy Producers................. 16
Section 9011: Biomass Crop Assistance Program (BCAP)............................................... 16
Section 9012: Forest Biomass for Energy......................................................................... 18
Section 9013: Community Wood Energy Program ........................................................... 18
Biofuels Infrastructure Study ............................................................................................ 19
Renewable Fertilizer Study ............................................................................................... 19
Title VII—Energy-Related Agricultural Research and Extension Provisions......................... 20
Section 7205: Nutrient Management Research and Extension Initiative.......................... 20
Section 7207: Agricultural Bioenergy Feedstock and Energy Efficiency Research
and Extension Initiative.................................................................................................. 20
Section 7526: Sun Grant Program..................................................................................... 20
Title XI—Energy-Related Livestock Provisions..................................................................... 21
Sec. 11014: Study on Bioenergy Operations..................................................................... 21
Title XV—Energy-Related Tax Provisions ............................................................................. 21
Sec. 15321: Credit for Production of Cellulosic Biofuel .................................................. 21
Sec. 15322: Comprehensive Study of Biofuels................................................................. 22
Sec. 15331: Modification of Alcohol Credit ..................................................................... 22
Sec. 15332: Calculation of Volume of Alcohol for Fuel Credits....................................... 22
Sec. 15333: Ethanol Tariff Extension................................................................................ 22
Sec. 15334: Limitations on Duty Drawback on Certain Imported Ethanol....................... 23
Additional Federal Renewable Energy Programs.......................................................................... 23
Rural Development Agency (RDA), USDA............................................................................ 23
Natural Resources and Conservation Service (NRCS), USDA............................................... 24
DOE Renewable Energy Programs ......................................................................................... 24
Assessment of Federal Biofuels Policy ......................................................................................... 24
Energy Policy Issues for the 2012 Farm Bill ................................................................................. 25
Program Expiration and Baseline Funding.............................................................................. 25
Possible Redundancy Across USDA and DOE Energy Programs........................................... 25
Cellulosic Biofuels Slow Development................................................................................... 26
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Tables
Table 1. 2008 Farm Bill Authorized Funding for Energy Provisions, FY2008-FY2012............... 27
Table 2. 2008 Farm Bill Energy Provision Funding: Authorized and Available, FY2010 to
FY2012 ....................................................................................................................................... 29
Appendixes
Appendix. Key Reports on Biofuels .............................................................................................. 31
Contacts
Author Contact Information........................................................................................................... 32
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Renewable Energy Programs and the Farm Bill: Status and Issues
Table of Acronyms
ARRA
American Recovery and Reinvestment Act of 2009 (P.L. 111-5)
BAP
Biorefinery Assistance Program
BCAP
Biomass Crop Assistance Program
BRDB
Biomass Research and Development Board
BRDI
Biomass Research and Development Initiative
CCC
Commodity Credit Corporation
CHST
Collection, Harvest, Storage, and Transportation
DOE
U.S. Department of Energy
DOT
U.S. Department of Transportation
EEI
Energy Efficiency Improvement
EERE
Office of Energy Efficiency & Renewable Energy, DOE
EISA
Energy Independence and Security Act of 2007 (P.L. 110-140)
EPA
U.S. Environmental Protection Agency
FFP
Flexible Feedstock Program
FR
Federal Register
NIFA
National Institute of Food and Agriculture
NOCP
Notice of Contract Proposal
NOFA
Notice of Funds Available
NOSA
Notice of Solicitation of Applications
OCE
Office of the Chief Economist, USDA
OEPNU
Office of Energy Policy and New Uses, OCE, USDA
RAP
Repowering Assistance Program
RBCS
Rural Business and Cooperative Service, RDA, USDA
RDA
Rural Development Agency, USDA
REAP
Rural Energy for America Program
REDA
Renewable Energy Development Assistance
RES
Renewable Energy Systems
RFS
Renewable Fuel Standard
USDA
U.S. Department of Agriculture
VEETC
Volumetric Ethanol Excise Tax Credit
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Renewable Energy Programs and the Farm Bill: Status and Issues
Overview
Agriculture-based renewable energy can take several forms, including biofuels such as corn-
based ethanol or soy-based biodiesel, wind-driven turbines located on farmland or in rural areas,
anaerobic digesters that convert animal waste into methane and electric power, or biomass
harvested for burning as a processing fuel or to generate heat as part of an industrial activity.
Since the late 1970s, U.S. policymakers at both the federal and state levels have adopted a variety
of incentives, regulations, and programs to encourage the production and use of agriculture-based
renewable energy (mostly biofuels).1 In particular, the two most widely used biofuels—ethanol
produced primarily from corn starch and biodiesel produced primarily from soybean oil—have
received significant federal support in the form of tax incentives, loans and grants, and regulatory
programs.2 By early 2008, total federal and state biofuels subsidies were estimated in the range of
$5.5 to $7 billion per year.3 Motivations cited for these legislative initiatives include energy
security concerns, reduction of greenhouse gas emissions, and raising domestic demand for U.S.-
produced farm products.
This report focuses on those policies contained in the 2008 farm bill (the Food, Conservation, and
Energy Act of 2008; P.L. 110-246) that support agriculture-based renewable energy, especially
biofuels. The introductory sections briefly describe how these policies evolved and how they fit
into the larger context of U.S. biofuels policy. Then, the policies specific to the 2008 farm bill are
defined in terms of their function, goals, administration, funding, and implementation status.
Finally, a section reviews the major emerging issues related to U.S. Department of Agriculture
(USDA) energy programs, particularly as related to their possible inclusion in the next farm bill.
Two tables at the end of this report present data on 2008 farm bill energy provision funding. The
first table shows the budgetary authority of the 2008 farm bill (Table 1), while the second table
compares the 2008 farm bill funding authority with the actual funding available for FY2010
through FY2012 (Table 2).
For a side-by-side comparison of energy-related provisions in the 2008 farm bill with those of the
2002 farm bill (the Farm Security and Rural Investment Act of 2002; P.L. 107-171), see CRS
Report RL34130, Renewable Energy Programs in the 2008 Farm Bill. For a side-by-side
comparison of energy-related provisions in the 2008 farm bill with those of the 2007 energy bill
(the Energy Independence and Security Act of 2007, P.L. 110-140), see CRS Report RL34239,
Biofuels Provisions in the 2007 Energy Bill and the 2008 Farm Bill: A Side-by-Side Comparison.
Origins of Federal Biofuels Policy
Renewable energy production plays a key role not just in agricultural policy, but also in energy,
tax, and environmental policy. As a result, many of the federal programs that support renewable
energy production in general, and agriculture-based energy production in particular, are outside
1 For a list of federal incentives in support of biofuels production, see CRS Report R40110, Biofuels Incentives: A
Summary of Federal Programs.
2 See CRS Report R41282, Agriculture-Based Biofuels: Overview and Emerging Issues.
3 CRS estimates based on ethanol production data and congressional appropriations.
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the purview of USDA and have origins outside of omnibus farm bill legislation. For example, the
three principal federal biofuels policies were all established outside of farm bills as follows.
• The Renewable Fuel Standard (RFS) mandates an increasing volume of biofuels
use and has its origins in the Energy Policy Act of 2005 (P.L. 109-58). The RFS
was expanded in EISA and divided into four distinct, but nested categories—
biodiesel, cellulosic, advanced, and total—each with its own mandated volume.4
• The volumetric ethanol excise tax credit (VEETC), originally established in the
American Jobs Creation Act of 2004 (P.L. 108-357), provides a tax credit of
$0.45 per gallon of pure ethanol blended with gasoline.5
• The ethanol import tariff (a most-favored-nation duty of $0.54 per gallon) is
intended to offset the blending tax credit and was originally established by the
Omnibus Reconciliation Act of 1980 (P.L. 96-499).6
In addition to the RFS, VEETC, and import tariff, several additional tax credits that originated
outside of farm bills are available for biodiesel production as well as for small producers (less
than 60 million gallons per year per plant) of ethanol and biodiesel.7 A substantial number of
federal programs also support renewable energy sources other than biofuels.8 In addition to
federal programs, many states offer additional support to biofuels producers, blenders, and
consumers.9
An awareness of the non-USDA federal programs is important for appreciating the role
envisioned for the energy title of the 2008 farm bill, which is designed to provide incentives for
the research and development of new agriculture-based renewable fuels, especially cellulosic-
based ethanol, and to expand their distribution and use.
First Farm Bill Energy Title—2002
The 2002 farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171) was the first
omnibus farm bill to explicitly include an energy title (Title IX). The energy title authorized
grants, loans, and loan guarantees to foster research on agriculture-based renewable energy, to
share development risk and to promote the adoption of renewable energy systems.10 Since
enactment of the 2002 farm bill, interest in renewable energy has grown rapidly, due in large part
to a strong rise in domestic and international petroleum prices and a dramatic acceleration in
domestic biofuels production (primarily corn-based ethanol).
4 See CRS Report R40155, Renewable Fuel Standard (RFS): Overview and Issues.
5 For a brief history of the ethanol tax credit, see CRS Report R41282, Agriculture-Based Biofuels: Overview and
Emerging Issues.
6 Ethanol imports are also subject to a 2.5% ad valorem tariff. For the origins and history of the import duty, see CRS
Report R40110, Biofuels Incentives: A Summary of Federal Programs; for a discussion of exemptions from the import
duty, see CRS Report RS21930, Ethanol Imports and the Caribbean Basin Initiative (CBI).
7 See CRS Report R40110, Biofuels Incentives: A Summary of Federal Programs.
8 For a complete listing of federal programs that support all types of renewable energy, see CRS Report R40913,
Renewable Energy and Energy Efficiency Incentives: A Summary of Federal Programs.
9 For information on state programs, see “Database of State Incentives for Renewables & Efficiency (DSIRE),” at
http://www.dsireusa.org/index.cfm.
10 For an overview of the 2002 farm bill’s energy title, see CRS Report RL33037, Previewing a 2007 Farm Bill.
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2008 Farm Bill Focus on Non-Corn-Based Biofuels
Annual U.S. ethanol production has expanded rapidly since 2001, rising from under 2 billion
gallons to over 10 billion gallons by 2010.11 Similarly, corn use for ethanol has grown from a
12% share of the U.S. corn crop in 2001, to an estimated 41% share of the 2010 corn crop. In
2007 (during the 2008 farm bill debate), about 23% of the U.S. corn crop was used for ethanol
and projections had ethanol’s corn-use share rising rapidly, sparking concerns about unintended
spillover consequences of the policy-driven expansion of U.S. corn ethanol production.
Dedicating an increasing share of the U.S. corn harvest to ethanol production evoked fears of
higher prices for all grains and oilseeds that compete for the same land, resulting in higher
livestock feed costs, potentially higher food costs, and likely lower U.S. agricultural exports.12 In
addition, several environmental concerns emerged regarding the expansion of corn production
onto non-traditional lands, including native grass and prairie land. As a result of these concerns,
policymakers sought to refocus biofuels policy initiatives in the 2008 farm bill in favor of non-
corn feedstocks, especially cellulosic-based feedstocks.
Renewable energy policy in the 2008 farm bill became law six months after the enactment of the
Energy Independence and Security Act of 2007 (EISA, P.L. 110-140). A key component of EISA
was a significant expansion of the renewable fuels standard (RFS), which mandates the increasing
use of “advanced biofuels” (i.e., non-corn starch biofuels), whose minimum use must grow from
zero in 2008 to 21 million gallons by 2022.
The energy provisions of the 2008 farm bill were intended to reinforce these goals and EISA’s
programs via a further refocusing of federal incentives toward non-corn sources of renewable
energy. Key biofuels-related provisions in the enacted 2008 farm bill include13
• expansion of the existing bio-based marketing program to encourage federal
procurement of bio-based products (Sec. 9002);
• expansion of the federal bio-products certification program (Sec. 9002);
• additional support for biorefinery development (Sec. 9003);
• grants and loan guarantees for advanced biofuels (especially cellulosic)
production (Sec. 9005);
• an education program to promote the use and understanding of biodiesel
(Sec. 9006);
• support for rural energy efficiency and self-sufficiency and biofuels marketing
infrastructure (Sec. 9007);
• reauthorization of biofuels research programs (Sec. 9008) within USDA and the
Department of Energy (DOE);
11 For a discussion of the rapid growth of the U.S. biofuels sector, see CRS Report R41282, Agriculture-Based
Biofuels: Overview and Emerging Issues.
12 For a discussion of growing concerns associated with rapid biofuels expansion, see the section entitled, “Potential
Issues with the Expanded RFS,” in CRS Report R40155, Renewable Fuel Standard (RFS): Overview and Issues.
13 Parenthetic section numbers 9002 through 9011 refer to the amended 2002 farm bill sections.
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• a new program to incentivize the production, harvesting, storage, and
transportation of cellulosic ethanol feedstock (Sec. 9011);
• reauthorization of Sun Grant Initiative programs that coordinate research on
advanced biofuels at land-grant universities and federally funded laboratories
(Sec. 7526);
• establishment of a new cellulosic ethanol production tax credit (Sec. 15321),
• reduction of the blender tax credit for corn-based ethanol (Sec. 15331);
• studies of the market and environmental impacts of increased biofuels use
(Sec. 15322); and
• continuation of the import duty on ethanol (Sec. 15333).
The potential development of a cellulosic-based ethanol industry is presently impeded by the state
of cellulosic conversion technology, which still is expensive relative to corn-based production and
has yet to be successfully developed at a commercial scale. However, the enormous potential
supply of low-cost cellulosic plant material available in the United States makes it a possibly
attractive prospective feedstock.14
Funding for Agriculture-Based Energy Programs
In general, two types of funding are authorized by Congress in a farm bill—mandatory and
discretionary. Some farm bill programs identified as receiving mandatory funds are automatically
funded at levels “authorized” in the farm bill unless Congress limits funding to a lower amount
through the appropriations or legislative process. For many of these programs, mandatory funding
is provided through the borrowing authority of USDA’s Commodity Credit Corporation (CCC).15
The farm bill may also specify a certain funding amount as “authorized to be appropriated” for
discretionary program; however, actual discretionary funding is determined each year through the
annual appropriations process.
The 2008 farm bill authorized a total of $1.1 billion in mandatory funding for energy programs
for FY2008 through FY2012, compared with $800 million in the 2002 farm bill (FY2002-
FY2007). Mandatory authorizations in the 2008 farm bill included $320 million to the
Biorefinery Assistance Program, $300 million to the Bioenergy Program for Advanced Biofuels,
and $255 million to the Rural Energy for America Program (REAP). The Biomass Crop
Assistance Program (BCAP) was authorized to receive such sums as necessary (i.e., funding is
open-ended and depends on program participation). Discretionary funding in the 2008 farm bill
totaled $1.7 billion (including $600 million for the Biorefinery Assistance Program), compared to
$245 million in the 2002 farm bill. However, actual discretionary appropriations to Title IX
energy programs have been substantially below authorized levels through FY2011.
14 See the section entitled “Potential Issues with the Expanded RFS” in CRS Report R40155, Renewable Fuel Standard
(RFS): Overview and Issues; and see CRS Report R41106, Meeting the Renewable Fuel Standard (RFS) Mandate for
Cellulosic Biofuels: Questions and Answers.
15 The CCC is the funding mechanism for the mandatory payments that are administered by various agencies of USDA,
including all of the farm commodity price and income support programs and selected conservation programs. For more
information on mandatory versus discretionary authorizations, see CRS Report R41964, Agriculture and Related
Agencies: FY2012 Appropriations.
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Renewable Energy Programs and the Farm Bill: Status and Issues
Since the enactment of the 2008 farm bill, the renewable energy programs authorized under the
energy title (Title IX) have invested more than $460 million in biorefineries and renewable
energy and energy efficiency systems through mandatory funding for grants, loan guarantees, and
assistance payments.16 In addition, more than $243 million was spent on BCAP during FY2009
and FY2010. However, many of the discretionary programs never received any funding or
received lesser amounts than originally authorized in the farm bill.
Table 1, at the end of the report, illustrates the mandatory and discretionary spending levels for
renewable energy programs authorized in the 2008 farm bill. Table 2, also at the end of the
report, provides a list of provisions in the 2008 farm bill’s energy title, and selected energy
programs in the research title, for FY2008 through FY2012, along with their funding as
authorized in the 2008 farm bill and as provided under budget authority by Congress.
Major Energy Provisions in the 2008 Farm Bill
Like the 2002 farm bill, the 2008 farm bill (P.L. 110-246) contained a distinct energy title (Title
IX) that significantly expanded the number and type of programs available to support biofuels
production and use—including corn starch-based ethanol, cellulosic ethanol, and biodiesel.17 The
enacted 2008 farm bill’s Title IX served as a substitute amendment to the 2002 farm bill Title IX
and consisted of three sections. The first section, 9001, contained 13 new provisions that
effectively replaced the provisions of the 2002 bill. Sections 9002 and 9003 directed studies and
reports on biofuels infrastructure and renewable fertilizer, respectively. Research provisions
relating to renewable energy were in Title VII and tax and trade provisions were in Title XV. In
addition, Title VI (Rural Development) included several programs to facilitate rural renewable
energy production and development.
Title IX—Energy Provisions
The following is a summary of the authorities found under Section 9001 in Title IX of the 2008
farm bill, including (where applicable) a brief description of each program, funding levels, and
the status of program implementation. Section numbers 9001 through 9013 refer to the amended
2002 farm bill sections.
Section 9001: Definitions
As part of its effort to refocus federal biofuels incentives away from traditional food and feed
crops, the 2008 farm bill explicitly created new definitions or added more specificity to the
definition of several essential terms related to renewable energy, including
16 Judith Canales, Administrator, Rural Business Service, and Juan Garcia, Deputy Administrator, Farm Service
Agency, USDA, “Testimony before the House Agriculture Subcommittee on Conservation, Energy, and Forestry at an
Agricultural Program Audit: Examination of USDA Energy Programs,” July 20, 2011; hereafter referred to as USDA
Testimony at House Agr. Subcom. on Cons. Energy, and Forestry, Audit of USDA Energy Programs, July 20, 2011.
17 For a side-by-side comparison of previous law with the energy provisions of the 2008 farm bill, see CRS Report
RL34130, Renewable Energy Programs in the 2008 Farm Bill.
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• “advanced biofuels”—fuel derived from renewable biomass other than corn
kernel starch, including ethanol derived from other plant starches (e.g., sorghum,
sugar, as well as cellulosic biomass or organic waste), organically derived biogas,
butanol or other alcohols, and biodiesel;
• “biobased product”—a commercial or industrial product (other than food or
feed), or an intermediate ingredient in such a product, that is composed, in whole
or in significant part, of biological products;
• “biomass conversion facility”—a facility that converts renewable biomass into
heat, power, biobased products, or advanced biofuels; and
• “renewable biomass”—any organic matter available on a renewable or recurring
basis from nonfederal land except under very strict conditions.18
Section 9002: Biobased Markets Program
Function: The 2008 farm bill renamed the federal biobased products procurement preference
program as the Biobased Markets Program. It requires federal agencies to establish a program
with specifications for procuring biobased products including a national registry of biobased
testing centers, and authorizes a voluntary labeling program under which producers of biobased
products may use the label “USDA Certified Biobased Product.” (7 U.S.C. § 8102)
Under the Biobased Markets Program, federal agencies and their contractors are required to
purchase biobased products when the cumulative purchase price of procurement is more than
$10,000 or when the quantities of functionally equivalent items purchased over the preceding
fiscal year equaled $10,000 or more. Each federal agency and contractor must procure biobased
products at the highest content levels within each product category unless the agency determines
that the items are not reasonably available, fail to meet applicable performance standards, or are
available only at an unreasonable price.
Administered by: Office of Energy Policy and New Uses (OEPNU), Office of the Chief
Economist (OCE), USDA.
Funding: Mandatory Commodity Credit Corporation (CCC) funding of $1 million for FY2008
and $2 million for each of FY2009-FY2012 for biobased products testing and labeling was
authorized. Discretionary funding of $2 million was authorized to be appropriated for each of
FY2009-FY2012; however, no discretionary funding has been appropriated for the Biobased
Markets Program through FY2011.
Implementation Status: The Biobased Markets Program was originally established under the
2002 farm bill as a federal procurement preference program that required federal agencies to
purchase biobased products under certain conditions. USDA refers to the program as the
BioPreferred® Program.19 The final guidelines for the federal preferred procurement program
were published on January 11, 2005 (70 Fed. Reg. 1792).20 In addition to program guidelines,
18 For a discussion of issues related to discrepancies in the federal definition of “renewable biomass,” see CRS Report
R40529, Biomass: Comparison of Definitions in Legislation Through the 111th Congress.
19 OEPNU, OCE, USDA, Metrics To Support Informed Decision Making for Consumers of Biobased Products, by
Marvin Duncan, Barbara C. Lippiatt, Zia Haq, Michael Wang, and Roger Conway, AIB No. 803, October 2008.
20 This is an abridged citation for Federal Register, vol. 70, no. 7, pp. 1792-1812. This abridged format will be used
(continued...)
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USDA has promulgated six rounds of regulations for the BioPreferred® Program designating
categories of biobased products for preferred federal procurement. As of July 20, 2011, there were
50 designated product categories.21 USDA announced that a seventh designation rule with 14
product categories would be promulgated by the end of August 2011. Once published, the seventh
round will result in 64 categories and almost 9,000 products approved for preferred federal
procurement.
The final rule for the voluntary labeling program for biobased products was published on
January 20, 2011 (76 Fed. Reg. 3790). More than 430 products from 150 companies have been
certified to carry the USDA Certified Biobased label as of July 20, 2011.22
Section 9003: Biorefinery Assistance Program (BAP)
Function: The Biorefinery Assistance Program (BAP) assists in the development of new and
emerging technologies for advanced biofuels.23 BAP provides competitive grants and loan
guarantees for construction and/or retrofitting of demonstration-scale biorefineries to demonstrate
the commercial viability of one or more processes for converting renewable biomass to advanced
biofuels. Biorefinery grants can provide for up to 30% of total project costs. Each loan guarantee
is limited to $250 million or 80% of project cost. (7 U.S.C. § 8103)
Administered by: Rural Business and Cooperative Service, Rural Development Agency (RDA),
USDA, in consultation with DOE.
Funding: Mandatory CCC funding of $75 million in FY2009 and $245 million in FY2010 (to
remain available until expended) was authorized for loan guarantees. Discretionary funding of
$150 million annually was authorized for FY2009-FY2012 for grants. No discretionary funding
has been appropriated for BAP through FY2011.
Implementation Status: BAP was newly established under the 2008 farm bill. Mandatory funds
are used for the loan guarantee portion of BAP whereas discretionary appropriations are to be
used to fund grants. However, since Congress has not appropriated any discretionary funds for
BAP during the life of the 2008 farm bill, USDA has only moved forward with the loan guarantee
portion of BAP. The interim rule for the BAP’s guaranteed loans was published on February 14,
2011 (76 Fed. Reg. 8404).
For loan guarantees, project lenders (not prospective borrowers) must submit the application.24
Each loan guarantee application undergoes at least three rounds of review within USDA
(including review by the Rural Development Agency, the National Renewable Energy Laboratory
(...continued)
throughout this report.
21 USDA Testimony at House Agriculture Subcommittee on Conservation, Energy, and Forestry, audit of USDA
Energy Programs, July 20, 2011; at http://agriculture.house.gov/hearings/.
22 Ibid.
23 For more program information, see “Section 9003: Biorefinery Assistance Program,” Business and Cooperative
Programs (BCP), Rural Development (RD), USDA, at http://www.rurdev.usda.gov/BCP_Biorefinery.html.
24 More information on the BAP loan guarantee applications is available at http://www.rurdev.usda.gov/
SupportDocuments/BCP_9003_ApplicationGuide0311.doc
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(NREL), and the Office of the Chief Economist (OCE)). Average processing time per application
is about nine months. Application fees include both a guarantee fee and an annual renewal fee.
On November 20, 2008, a notice of funds available (NOFA) for $75 million to support
guaranteed loans under BAP in FY2009 was published (75 Fed. Reg. 70544). During FY2009,
three projects were selected for BAP loan guarantees involving $159 million in total approved
leverage.25 However, one project was dropped due to ineligibility (a biodiesel retrofit project in
Minnesota), leaving $134 million in approved coverage.
On May 6, 2010, a NOFA for $150 million to support guaranteed loans under BAP in FY2010
was published (75 Fed. Reg. 25076). An additional four projects were selected during FY2010
with an approved value of $255 million. Of the six current projects, four are cellulosic biofuel
plants, one is an anaerobic digester, and one is an algae-to-diesel or jet fuel project.
On March 11, 2011, a NOFA for $129 million to support guaranteed loans under BAP in FY2011
was published (76 Fed. Reg. 13351) requesting applications for funding support be received by
May 10, 2011. On June 6, 2011, an extension of the NOFA applications deadline to July 6, 2011,
was published (76 Fed. Reg. 32355). As of the closing date for applications (July 6, 2011), USDA
had received 13 applications valued at $1.3 billion in requested funding.
Section 9004: Repowering Assistance Program (RAP)
Function: The Repowering Assistance Program (RAP) makes payments to eligible biorefineries
(those in existence on the date of enactment of the 2008 farm bill, June 18, 2008) to encourage
the use of renewable biomass as a replacement for fossil fuels used to provide heat for processing
or power in the operation of these eligible biorefineries.26 Not more than 5% of the funds shall be
made available to eligible producers with a refining capacity exceeding 150 million gallons of
advanced biofuel per year. (7 U.S.C. § 8104)
Administered by: Rural Business and Cooperative Service, RD, USDA.
Funding: Mandatory CCC funding of $35 million for FY2009 was authorized, to remain
available until expended. Discretionary funding of $15 million annually for FY2009-FY2012 was
authorized to be appropriated; however, only $15 million in FY2010 has been appropriated
through FY2011.
Implementation Status: RAP was originally established under the 2002 farm bill as a grant
program to help finance the cost of developing and constructing biorefineries and biofuels
production plants to carry out projects to demonstrate the commercial viability of converting
biomass to fuels or chemicals. The 2008 farm bill altered RAP’s orientation to focus on
converting fossil fuel burning plants to biomass or some other renewable fuel source for
processing energy.
The proposed rule for the Repowering Assistance Program was published on April 16, 2010
(75 Fed. Reg. 20073). After a comment period and subsequent modifications, an interim rule was
25 Based on information received by CRS from Kelly Oehler, Branch Chief, Energy Division, RD, USDA.
26 For more program information, see “Section 9004: Repowering Assistance Program,” BCP, RD, USDA, at
http://www.rurdev.usda.gov/BCP_RepoweringAssistance.html.
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published on February 11, 2011 (76 Fed. Reg. 7916). Individual project awards are limited to $5
million or 50% of total eligible project costs, whichever is less.
In three consecutive fiscal years (2008, 2009, and 2010), USDA published NOFAs announcing
funding under RAP to support eligible plants in each respective fiscal year: June 12, 2009,
$20 million (74 Fed. Reg. 28009); May 6, 2010, $8 million (75 Fed. Reg. 24873); and March 11,
2011, $25 million (76 Fed. Reg. 13349).
Section 9005: Bioenergy Program for Advanced Biofuels
Function: The 2008 farm bill established a new Bioenergy Program for Advanced Biofuels to
support and expand production of advanced biofuels—i.e., fuel derived from renewable biomass
other than corn kernel starch—by entering into contracts with advanced biofuel producers to pay
them for production of eligible advanced biofuels.27 The policy goal is to create long-term,
sustained increases in advanced biofuels production. (7 U.S.C. § 8105)
Administered by: Rural Business and Cooperative Service, RD, USDA.
Funding: Mandatory CCC funding of $55 million for 2009, $55 million for FY2010, $85 million
for FY2011, and $105 million for FY2012 was authorized to remain available until expended.
Discretionary funding of $25 million annually for FY2009-FY2012 was authorized to be
appropriated; however, no discretionary funding has been appropriated through FY2011.
On June 16, 2011, the House passed an FY2012 appropriations bill (H.R. 2112) that limits
FY2012 funding for the Bioenergy Program for Advanced Biofuels to $55 million. Further action
is pending.
Implementation Status: Originally created by a 1999 executive order during the Clinton
Administration, the bioenergy program provided mandatory CCC incentive payments to biofuels
producers based on year-to-year increases in the quantity of biofuel produced. Under the 2002
farm bill, mandatory CCC funding of $150 million was available for each of FY2002 through
FY2006; however, no funding was authorized for FY2007, effectively terminating the program.
The 2008 farm bill’s Section 9005 revived the bioenergy program but refocused its funding to
non-corn-starch biomass sources. Producers of advanced biofuels enter into contracts with USDA
to receive payments based on the quantity and duration of production of advanced biofuels, the
net renewable energy content of the biofuel, and other factors. Only one producer per refinery is
eligible to apply. The interim rule for the Bioenergy Program for Advanced Biofuels was
published on February 11, 2011 (76 Fed. Reg. 7936).
Producers must submit records to document their production of advanced biofuels. Payments will
be made in two tiers. The first tier is based on actual production, while the second tier is based on
incremental increases in production as an incentive to expand annual production on a sustained
basis. Program funding is to be distributed according to the two tiers: in FY2010 the first tier
receives 80% of available funds and the second tier receives 20%; in FY2011 the first tier
receives 70%, the second tier 30%; in FY2012 the first tier receives 60%, the second tier 40%; in
27 For more program information, see “Section 9005: Bioenergy Program for Advanced Biofuels,” BCP, RD, USDA, at
http://www.rurdev.usda.gov/BCP_Biofuels.html.
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FY2013 and beyond, each tier receives 50%. Payments are capped per recipient to ensure
equitable distribution. Not more than 5% of the funds in any year can go to facilities with total
refining capacity exceeding 150 million gallons per year. Solid advanced biofuels produced from
forest biomass are ineligible for the second tier incremental payment and may not receive more
than 5% of annual program funds.
USDA has made five notice of contract proposals (NOCPs) to make payments to biorefineries for
the production of advanced biofuels under the Bioenergy Program for Advanced Biofuels: an
initial FY2009 award of $30 million (June 12, 2009, 74 Fed. Reg. 27998); additional FY2009
awards of the remainder of $30 million less the $14.5 million awarded through early March 2010
(March 12, 2010, 75 Fed. Reg. 11836); FY2010 awards of $40 million (May 6, 2010, 75 Fed.
Reg. 24865);28 a second FY2010 award announcement of $80 million that superseded the May 6,
2010, NOCP (Feb. 11, 2011, 76 Fed. Reg. 7966), and FY2011 awards of $85 million (March 11,
2011, 76 Fed. Reg. 13345). Through July 20, 2011, almost $30 million in assistance payments
have been provided to 141 advanced biofuel producers.29
Section 9006: Biodiesel Fuel Education Program
Function: The Biodiesel Fuel Education Program awards competitive grants to nonprofit
organizations that educate governmental and private entities operating vehicle fleets, and educates
the public about the benefits of biodiesel fuel use. (7 U.S.C. § 8106)
Administered by: National Institute of Food and Agriculture (NIFA) and OEPNU, OCE, USDA.
Funding: Mandatory CCC funds of $1 million are provided annually for FY2008-FY2012.
Implementation Status: Originally established under the 2002 farm bill, the Biodiesel Fuel
Education Program was extended through 2012 in the 2008 farm bill. The program is
implemented by USDA through continuation grants. The final rule for the program was published
on September 30, 2003 (68 Fed. Reg. 56137).
On July 15, 2003, USDA published a request for applications for the Biodiesel Fuel Education
Program for FY2003 (68 Fed. Reg. 41770). USDA awarded the original program grants to two
entities: the National Biodiesel Board and the University of Idaho. Under the 2008 farm bill,
NIFA obligated its funding to the same two entities for an initial period of one year, but has
agreed to support their efforts through FY2012 contingent on the satisfactory progress of this
project. The program is monitored by the USDA Biodiesel Education Oversight Committee,
which includes a DOE representative.
28 The first FY2010 NCOPO was cancelled due to rural location and citizenship requirements. These requirements were
removed in the interim rule of Feb. 11, 2011.
29 USDA Testimony at House Agriculture Subcommittee on Conservation, Energy, and Forestry, Audit of USDA
Energy Programs, July 20, 2011; at http://agriculture.house.gov/hearings/.
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Section 9007: Rural Energy for America Program (REAP)
Function: REAP provides financial assistance for:
• grants, guaranteed loans, and combined grants and guaranteed loans for the
development and construction of renewable energy systems (RES) and for energy
efficiency improvement (EEI) projects (eligible entities include rural small
businesses and agricultural producers);
• grants for conducting energy audits and for conducting renewable energy
development assistance (eligible entities include state, tribe, or local
governments, land-grant colleges and universities, rural electric cooperatives and
public power entities); and
• grants for conducting RES feasibility studies (eligible entities include rural small
businesses and agricultural producers).
Renewable energy systems (RES) include those that generate energy from bioenergy
(including flexible fuel pumps), anaerobic digesters, geothermal, hydrogen, solar, wind,
and hydropower. Energy-efficiency improvement (EEI) projects typically involve
installing or upgrading equipment to significantly reduce energy use. (7 U.S.C. § 8107)
Administered by: Rural Business and Cooperative Service, RD, USDA.
Funding: Mandatory CCC funds of $55 million in FY2009, $60 million in FY2010, $70 million
in FY2011, and $70 million in FY2012, to remain available until expended, were authorized.
Discretionary funding of $25 million annually was authorized to be appropriated for FY2009-
FY2012. Actual discretionary appropriations have been $5 million in FY2009, $40 million in
FY2010, and $5 million in FY2011.
On June 16, 2011, the House passed an FY2012 appropriations bill, H.R. 2112, which would
reduce REAP mandatory funding to zero and discretionary funding to $2.2 million, split evenly
between grants and loan guarantees. The House also agreed, by a recorded vote of 283 to 128, to
an amendment to H.R. 2112 (H.Amdt. 475) that would prohibit the use of funds for the
construction of ethanol blender pumps or ethanol storage facilities. Further action is pending in
the Senate.
On June 16, 2011, the Senate considered a similar amendment (S.Amdt. 411) to separate,
unrelated legislation (S. 782) that would have prohibited the use of REAP funds for the
construction of ethanol blender pumps or ethanol storage facilities. However, the amendment was
not agreed to in the full Senate by a 41-59 vote.
Implementation Status: The 2008 farm bill combined elements of two existing programs from
the 2002 farm bill—the Energy Audit and Renewable Energy Development Program and the RES
and EEI Program—into a single program renamed the Rural Energy for America Program
(REAP). Certain provisions of REAP have been operating since 2005 under 7 C.F.R. part 4280,
subpart B. Regulations for operating grants and loan guarantees under the 2002 farm bill’s RES
and EEI Program were published on July 18, 2005 (70 Fed. Reg. 41264). A series of Federal
Register notices (cited below) were used to implement the REAP provisions in the 2008 farm bill
(i.e., RES feasibility studies, energy audits, and renewable energy development assistance) until
new regulations were implemented. On April 14, 2011, an interim rule for REAP was published
(76 Fed. Reg. 21110) to consolidate the various REAP programs by including each part of the
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program in a single subpart based on USDA experience under the 2002 farm bill energy
programs. The interim REAP rule includes several changes to previous implementation methods:
both U.S. citizenship and the rural area location requirements were removed, and flexible fuel
(“blender”) pumps that dispense variable blends of petroleum and biofuels were included as
viable renewable energy development projects.
REAP Loan Guarantees
The REAP Guaranteed Loan Program encourages the commercial financing of renewable energy
(bioenergy, geothermal, hydrogen, solar, wind and hydropower) and energy efficiency projects.30
Under the program, project developers work with local lenders, who in turn can apply to USDA
Rural Development for a loan guarantee of up to 75% of the project’s cost (subject to a maximum
of $25 million and a minimum of $5,000). The maximum percentage of guarantee (applied to the
whole loan) is 85% of the loan amount for loans of $600,000 or less with a declining percentage
for higher loan amounts.
REAP Grants
The type of grants available under REAP are still distinguished by their 2002 farm bill origins
with separate grant programs for EEI, Renewable Energy Development Assistance (REDA), and
Feasibility Studies.
Under REAP, the Renewable Energy Systems/Energy Efficiency Improvement Grants Program
provides grants for energy audits and renewable energy development assistance.31 It also provides
funds to agricultural producers and rural small businesses to purchase and install renewable
energy systems and make energy efficiency improvements. The grants are awarded on a
competitive basis and can be up to 25% of total eligible project costs. Grants are limited to
$500,000 for renewable energy systems and $250,000 for energy efficiency improvements. Grant
requests as low as $2,500 for renewable energy systems and $1,500 for energy efficiency
improvements can be considered. At least 20% of the grant funds awarded must be for grants of
$20,000 or less.
Under REAP, the Energy Audit and Renewable Energy Development Assist Grant Program also
provides grants for energy audits and renewable energy development assistance.32 The grants are
awarded on a competitive basis and can be up $100,000. Recipients of an energy audit are
required to pay at least 25% of the cost of the audit. Only 4% of available funds may be used for
energy audits.
30 For more program information, see “Section 9007: Rural Energy for America Program Guaranteed Loan Program
(REAP LOANS),” BCP, RD, USDA, at http://www.rurdev.usda.gov/BCP_ReapLoans.html.
31 For more program information, see “Section 9007: REAP Renewable Energy Systems/Energy Efficiency
Improvement Program (REAP/RES/EEI) Grants Program,” BCP, RD, USDA, at http://www.rurdev.usda.gov/
BCP_ReapResEei.html.
32 For more program information, see “Section 9007: REAP SECTION 9007: Rural Energy for America Program
Grants/Energy Audit and Renewable Energy Development Assist (REAP/EA/REDA),” BCP, RD, USDA, at
http://www.rurdev.usda.gov/BCP_ReapEaReda.html.
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The REAP/Feasibility Grant Program also provides grants for energy audits and renewable
energy development assistance.33 It also provides funds to agricultural producers and rural small
businesses to conduct feasibility studies for a renewable energy system. The grants are awarded
on a competitive basis and can be up to 25% of total eligible project costs. Grants are limited to
$50,000 for renewable energy feasibility studies.
REAP Implementation and Legislative Action
A series of Federal Register notices have been used to implement the REAP provisions in the
2008 farm bill. A notice of solicitation of applications (NOSA) for 4% of FY2009 funds (i.e., $2.4
million) in grants for energy audits and renewable energy development assistance was published
on March 11, 2009 (74 Fed. Reg. 10533). A NOSA for the remaining portion of FY2009 funds of
$60 million ($55 million mandatory and $5 million discretionary) for RES feasibility studies and
to purchase renewable energy systems and energy efficiency improvements was published on
May 26, 2009 (74 Fed. Reg. 24769).
For FY2010, USDA published three Federal Register notices to implement REAP. A NOSA
published on April 26, 2010 (75 Fed. Reg. 21584), announced that about 88% of combined
mandatory and discretionary REAP funding for FY2010 ($100 million) was available for
renewable energy system and energy efficiency improvement grants and guaranteed loans. On
May 27, 2010, a NOFA was published (75 Fed. Reg. 29706) to announce $2.4 million for grants
for energy audits and renewable energy development assistance grants. Finally, a NOFA
published on August 6, 2010 (75 Fed. Reg. 47525), announced $3 million for grants to conduct
feasibility studies of renewable energy systems.
For FY2011, a NOFA published on April 14, 2011 (76 Fed. Reg. 20943), announced funds
available for financial assistance as follows: grants, guaranteed loans, and combined grants and
guaranteed loans for the development and construction of renewable energy systems and for
energy efficiency improvement projects; grants for conducting energy audits; grants for
conducting renewable energy development assistance; and grants for conducting renewable
energy system feasibility studies. The NOFA announced the availability of $70 million of FY2011
budget authority to fund these REAP activities, which is expected to support at least $42 million
in grant program level and up to $61 million in guaranteed loan program level. The FY2011
appropriations act (Department of Defense and Full-Year Continuing Appropriations Act, 2011;
P.L. 112-10) reduced REAP discretionary funds from $25 million to $5 million, but left REAP’s
mandatory funding of $70 million intact.
According to USDA, more than 6,100 awards have been made under REAP programs (and their
predecessor) from FY2003 through FY2010, spanning all agricultural sectors in all states.
According to the Environmental Law and Policy Center, more than $281 million in grants and
$227 million in loan guarantees were made under REAP from 2003 through 2010.34 On August
17, 2011, Secretary of Agriculture Vilsack announced more than $11.6 million in REAP energy
33 For more program information, see “Section 9007: REAP Feasibility Study Grants,” BCP, RD, USDA, at
http://www.rurdev.usda.gov/BCP_ReapGrants.html.
34 Amanda Peterka, “USDA, groups urge lawmakers to fund farm bill’s energy programs,” E&E News, July 21, 2011.
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grants to more than 900 agricultural producers and small businesses for projects to implement
renewable energy and energy efficiency measures in their operations.35
Section 9008: Biomass Research and Development Initiative (BRDI)
Function: BRDI—created originally under the Biomass Research and Development Act of 2000
(BRDA, P.L. 106-224)—provides competitive funding in the form of grants, contracts, and
financial assistance for research, development, and demonstration of technologies and processes
leading to significant commercial production of biofuels, biobased energy innovations,
development of biobased feedstocks, biobased products, and other such related processes,
including development of cost-competitive cellulosic ethanol. Eligibility is limited to institutions
of higher learning, national laboratories, federal or state research agencies, private-sector entities,
and nonprofit organizations.
BRDI provides for coordination of biomass research and development, including life-cycle
analysis of biofuels, between USDA and DOE by creating the Biomass Research and
Development Board to coordinate government activities in biomass research, and the Biomass
Research and Development Technical Advisory Committee to advise on proposal direction and
evaluation.36 The 2008 farm bill moved BRDA in statute to Title IX of the 2008 farm bill and
expanded the BRDI technical advisory committee. (7 U.S.C. § 8108)
Administered by: NIFA, USDA, and DOE, jointly.
Funding: Authorizes mandatory funding (to remain available until expended) of $20 million for
FY2009, $28 million for FY2010, $30 million for FY2011, and $40 million for FY2012.
Discretionary funding of $35 million is authorized to be appropriated annually for FY2009-
FY2012; however, no discretionary funding has been appropriated through FY2011.
Implementation Status: Since 2002 USDA and DOE jointly have announced annual solicitations
and awards of funding allocations under BRDI.37 Under the 2008 farm bill, applicants seeking
BRDI funding must propose projects that integrate science and engineering research in the
following three technical areas that are critical to the broader success of alternative biofuels
production: feedstock development, biofuels and biobased products development, and biofuels
development analysis. A minimum of 15% of funding must go to each area.38 The minimum cost-
share requirement for demonstration projects was increased to 50%, and for research projects to
20%.
From FY2002 through FY2010, more than $202 million has been awarded to 110 projects,
including $91.5 million from USDA and $111.1 million from DOE. On May 5, 2011, Secretary
35 USDA Press Release No. 0365.11, Office of Communications, USDA, August 17, 2011. A complete list of recipients
is available at http://www.rurdev.usda.gov/SupportDocuments/RDREAPGrantsAug162011.pdf.
36 For more information on the Biomass Research and Development Board, the Technical Advisory Committee, and
project selection, visit: http://www.usbiomassboard.gov/.
37 For BRDI current FY2011 and historical (FY2002-FY2010) solicitations and awards visit:
http://www.usbiomassboard.gov/initiative/past_solicitations.html.
38 For details on BRDI technical areas see http://www.nifa.usda.gov/nea/plants/in_focus/biobased_if_brdi.html.
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Vilsack (USDA) and Secretary Chu (DOE) announced a total of $47 million in new FY2011
awards to fund an additional eight research and development projects.39
Section 9009: Rural Energy Self-Sufficiency Initiative
Function: The Rural Energy Self-Sufficiency Initiative assists rural communities with
community-wide energy systems that reduce conventional energy use and increase the use of
energy from renewable sources. Grants are available to assess energy use in a rural community,
evaluate ideas for reducing energy use, and develop and install integrated renewable energy
systems. Grants are not to exceed 50% of the total cost of the activity. (7 U.S.C. § 8109)
Administered by: Rural Business and Cooperative Service, RD, USDA.
Funding: Discretionary funding of $5 million annually is authorized to be appropriated for
FY2009-FY2012; however, no funding has been appropriated through FY2011.
Implementation Status: Rural Development, USDA, has not yet announced any regulations for
this program.
Section 9010: Feedstock Flexibility Program (FFP) for Bioenergy Producers
Function: The Feedstock Flexibility Program requires that USDA establish (in FY2008) and
administer a sugar-for-ethanol program using sugar intended for food use but deemed to be in
surplus. USDA would subsidize the use of sugar for ethanol production through federal purchases
of surplus sugar for resale to ethanol producers. USDA would implement the program only in
those years where purchases are determined to be necessary to ensure that the sugar program
operates at no cost to the federal government. (7 U.S.C. § 8110)
Administered by: Farm Service Agency (FSA), USDA.
Funding: Mandatory CCC funds of such sums as necessary are to be made available.
Implementation Status: The program is on standby status until such time as the CCC acquires
an inventory of sugar, which currently does not exist.
Section 9011: Biomass Crop Assistance Program (BCAP)
Function: The Biomass Crop Assistance Program (BCAP) provides financial assistance to
owners and operators of agricultural land and non-industrial private forest land who wish to
establish, produce, and deliver biomass feedstocks.40 BCAP provides two categories of
assistance:41
39 For a NIFA news release, see http://www.nifa.usda.gov/newsroom/news/2011news/05052_brdi.html. For
information on the BRDI grant application process, see http://www.nifa.usda.gov/fo/fundview.cfm?fonum=2660.
40 For more information, see CRS Report R41296, Biomass Crop Assistance Program (BCAP): Status and Issues.
41 Farm Service Agency, USDA, “Biomass Crop Assistance Program (BCAP), “Fact Sheet,” at
http://www.fsa.usda.gov/Internet/FSA_File/bcap_update_may2011.pdf.
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1. establishment and annual payments, including a one-time payment of up to
75% of cost of establishment for perennial crops, and annual payments (i.e.,
rental rates based on a set of criteria) of up to 5 years for non-woody and 15
years for woody perennial biomass crops; and
2. matching payments, up to $45 per ton, which may be available to help eligible
material owners with collection, harvest, storage, and transportation (CHST) of
eligible material for use in a qualified biomass conversion facility.
Establishment and annual payments are available to certain producers who enter into contracts
with USDA to produce eligible biomass crops on contract acres within designated BCAP project
areas. Eligible land for BCAP project area contracts includes agricultural land and non-industrial
private forestland, but does not include federal or state-owned land, land that is native sod, or
land enrolled in the Conservation Reserve Program, Wetlands Reserve Program, or Grassland
Reserve Program. Generally, crops that receive payments under Title I (the commodity title) of
the farm bill (e.g., corn, wheat, rice, and soybeans) and noxious weeds or invasive species are not
eligible for annual payments.
BCAP assistance for establishing and producing biomass crops is available within designated
project areas. BCAP project areas are specific geographic areas where producers may enroll land
to grow specified biomass crops.42 Participants may be eligible to receive financial and technical
assistance as well as annual payments to establish these crops. Project areas are established based
on proposals submitted to FSA by either a group of producers or an entity that converts biomass
to heat, power, a biobased product, or an advanced biofuel. Those interested in submitting a
proposal are encouraged to contact their FSA state office for details. Upon designation of a
project area, certain producers within the project area are then eligible to enroll land into the
program.
Matching payments are available to eligible material owners who deliver eligible material to
qualified biomass conversion facilities. Eligible material must be harvested directly from the land
and separate from a higher-value product (e.g., Title I crops). Invasive and noxious species are
considered eligible material and land ownership (private, state, federal, etc.) is not a limiting
factor to receive matching payments. (7 U.S.C. § 8111)
Administered by: FSA, USDA.
Funding: Mandatory CCC funds of such sums as necessary are made available for each of
FY2008-F2012. Outlays depend on the number of participants. The 2010 Supplemental
Appropriations Act (P.L. 111-212) limited BCAP funding to $552 million in FY2010 and $432
million in FY2011. The Department of Defense and Full-Year Continuing Appropriations Act,
2011 (P.L. 112-10), further reduced BCAP funding for FY2011 to $112 million.
The President’s FY2012 budget proposed to limit funding for CHST to $70 million. The
remaining annual and establishment payment portion of BCAP would remain at such sums as
necessary (SSAN). On June 16, 2011, the House passed an FY2012 appropriations bill (H.R.
2112) that would eliminate funding for BCAP for FY2012. Further action is pending in the
Senate.
42 See FSA, USDA, “BCAP Project Area Information,” at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=
ener&topic=bcap-pjt.
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Implementation Status: On May 5, 2009, President Barack Obama issued a directive addressing
a variety of advanced biofuel priorities including the implementation of matching payments for
CHST of eligible materials for biomass conversion. On June 11, 2009, USDA published a NOFA
(74 Fed. Reg. 27767) to implement the CHST matching payments component of BCAP. The
NOFA was terminated on February 3, 2010, and, on February 8, 2010, USDA published a
proposed rule for BCAP (75 Fed. Reg. 6264). The final rule was published on October 27, 2010
(74 Fed. Reg. 27767), and implements the full BCAP program, including the annual and
establishment payment. USDA is required to submit a report to the House and Senate Agriculture
Committees on the dissemination of the best practice data and information gathered from
participants receiving assistance under BCAP no later than four years after enactment of the 2008
farm bill (i.e., by June 18, 2012).
No payments were made in FY2008; however, in FY2009 and FY2010, $243 million was paid
out to projects in 31 states.43 As of July 29, 2011, USDA had selected nine BCAP project areas
and continued to enroll producers for annual and establishment payments. Matching payments
have been suspended until enrollment for annual and establishment payments concludes.44
Section 9012: Forest Biomass for Energy
Function: The Forest Biomass for Energy program is a research and development program to
encourage use of forest biomass for energy. The Forest Service, other federal agencies, state and
local governments, Indian tribes, land-grant colleges and universities, and private entities are
eligible to compete for program funds. Priority is given to projects that use low-value forest
byproduct biomass for the production of energy; develop processes to integrate bioenergy from
forest biomass into existing manufacturing streams; develop new transportation fuels; and
improve the growth and yield of trees for renewable energy. (7 U.S.C. § 8112)
Administered by: Forest Service, USDA.
Funding: Discretionary funding of $12 million annually is authorized to be appropriated for
FY2009-FY2012; however, no funding has been appropriated through FY2011.
Implementation Status: The Forest Service has not yet announced any regulations for this
program. The President’s FY2011 budget proposed to fund both the Forest Biomass for Energy
Program and the Community Wood Energy Program using funds from the Hazardous Fuels
Program (Wildland Fire Management) within the Forest Service. The President’s FY2012 budget
proposal included a similar request to fund both programs using the Hazardous Fuels Program;
however, only $15 million was requested for the Forest Biomass for Energy Program and $3.75
million for the Community Wood Energy Program.
Section 9013: Community Wood Energy Program
Function: The Community Wood Energy Program provides matching grants to state and local
governments to acquire community wood energy systems for public buildings. Participants must
43 BCAP CHST Summary Report, at http://www.fsa.usda.gov/Internet/FSA_File/bcap_chst_summary_report.pdf.
44 See FSA, USDA, “BCAP Project Areas Listing,” at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=
ener&topic=bcap-pjt-bloc.
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also implement a community wood energy plan to meet energy needs with reduced carbon
intensity through conservation, reduced costs, utilizing low-value wood sources, and increased
awareness of energy consumption. (7 U.S.C. § 8113)
Administered by: Forest Service, USDA.
Funding: Discretionary funding of $5 million annually is authorized to be appropriated for
FY2009-FY2012. No funding has been appropriated through FY2011; however, the Forest
Service has awarded $49 million in funding from the American Recovery and Reinvestment Act
of 2009 (ARRA, P.L. 111-5) for wood-to-energy projects, and the appropriations committee
reports in FY2010 and FY2011 have directed the use of $5 million in Hazardous Fuels funds for
biomass energy projects.
Implementation Status: The Forest Service is pursuing the implementation of this program
using funding from their overall State & Private appropriation.45 An agency working group is
developing the work plan for the Community Wood Energy Program, coordinating with Rural
Development (RD) to ensure the new program is complementary with other biomass energy
programs administered by RD. (See “Implementation” note under “Section 9012: Forest Biomass
for Energy” for funding proposals under the President’s FY2011 and FY2012 budget proposals.)
Biofuels Infrastructure Study
Function: Sec. 9002 of the 2008 farm bill requests that USDA, DOE, EPA, and the Department
of Transportation (DOT) jointly report on the infrastructure needs, requirements, and
development approaches for expanding the domestic production, transportation, and distribution
of biofuels given current and likely future market trends. A report including the study results is to
be submitted to various related committees in Congress. No deadline was specified.
Funding: No specific funding was announced for this study and no funding has been authorized
through FY2011.
Renewable Fertilizer Study
Function: Sec. 9003 of the 2008 farm bill requires that a report be submitted to the House and
Senate Agriculture Committees within one year of receipt of the appropriations to carry out the
study on the production of fertilizer from renewable energy sources in rural areas. The report is to
be based on a study of the challenges to commercialization of rural fertilizer production from
renewable sources, potential processes and technologies, and the potential impacts of renewable
fertilizer on fossil fuel use and the environment.
Funding: Discretionary funding of $1 million was authorized to be appropriated for FY2009;
however, no discretionary funding has been authorized through FY2011.
45 Farm Bill Working Group, Office of Budget and Program Analysis, USDA, “Highlights: Title IX-Energy,”
October 26, 2009.
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Title VII—Energy-Related Agricultural Research and
Extension Provisions
Section 7205: Nutrient Management Research and Extension Initiative
Function: Sec. 1673(h) of the 1990 farm bill (Food, Agriculture, Conservation, and Trade Act of
1990; P.L. 101-624) authorized matching grants under the farm bill nutrient management research
and extension initiative for finding innovative methods and technologies for economic use or
disposal of animal waste. This program was extended through 2007 by Sec. 7120 of the 2002
farm bill. The 2008 farm bill again extended the nutrient management research and extension
initiative through FY2012 and added dairy cattle waste as a type of waste to be studied. It also
added an amendment to include the production of renewable energy from animal waste as an
eligible activity to receive grants under this section. (7 U.S.C. § 5925a)
Administered by: National Agricultural Research, Extension, Education, and Economics
Advisory Board, USDA.46
Funding: Mandatory CCC funds of such sums as necessary are made available for each of
FY2008-F2012.
Section 7207: Agricultural Bioenergy Feedstock and Energy Efficiency
Research and Extension Initiative
Function: Sec. 7207 of the 2008 farm bill established the Agricultural Bioenergy Feedstock and
Energy Efficiency Research and Extension Initiative, a program to award competitive matching
grants (up to 50% of project costs) for projects with a focus on supporting on-farm biomass crop
research and the dissemination of results to enhance the production of biomass energy crops and
the integration of such production with the production of bioenergy.
Administered by: The Secretary of Agriculture in consultation with the National Agricultural
Research, Extension, Education, and Economics Advisory Board, USDA.
Funding: Discretionary funding of $50 million annually is authorized to be appropriated for
FY2008-FY2012; however, no funding has been appropriated through FY2011.
Section 7526: Sun Grant Program
Function: The Sun Grant Initiative (SGI) is a national network of land-grant universities and
federally funded laboratories—coordinated through regional Sun Grant centers—working
together to further establish a biobased economy.47 Sun Grant centers are also charged with
reviving America’s farming communities by placing an emphasis on rural economic development
through the production of biobased renewable energy feedstocks.
46 See http://nareeeab.ree.usda.gov.
47 See “Sun Grant Initiative,” at http://www.sungrant.org/.
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This provision was added subsequent to the 2002 farm bill under the Sun Grant Research
Initiative Act of 2003 (Sec. 778, Consolidated Appropriations Act, 2004; P.L. 108-199). The
initiative was originally established with five national Sun Grant research centers based at land-
grant universities (a north-central center at South Dakota State University; a southeastern center
at the University of Tennessee; a south-central center at Oklahoma State University; a western
center at Oregon State University; and a northeastern center at Cornell University), each covering
a different national region, to enhance coordination and collaboration among USDA, DOE, and
land-grant universities in the development, distribution, and implementation of biobased energy
technologies. Competitive grants are available to land-grant schools within each region. The 2008
farm bill reauthorized the Sun Grant Program through FY2012 and established a sixth regional
center—a Western Insular Pacific Sub-Center at the University of Hawaii. (7 U.S.C. § 8114)
Administered by: NIFA, USDA. Each regional Sun Grant center manages the programs and
activities within its region, although a process based on peer and merit review is used to
administer grants.
Funding: Discretionary funding of $75 million annually is authorized to be appropriated for
FY2008-FY2012. However, $2.25 million only for FY2010 has been appropriated to date.
Implementation Status: As of July 20, 2011, SGI had more than 130 field studies on biomass
feedstocks currently underway with locations in more than 75% of the states.
Since NIFA has been delegated the authority to administer the program, awards made under the
Sun Grant Program are subject to NIFA’s assistance regulations at 7 C.F.R. part 3430 as
announced on November 18, 2010 (Competitive and Noncompetitive Nonformula Federal
Assistance Programs—Administrative Provisions for the Sun Grant Program, 75 Fed. Reg.
70578).
Title XI—Energy-Related Livestock Provisions
Sec. 11014: Study on Bioenergy Operations
Function: Sec. 11014 of the 2008 farm bill requires a USDA study on the use of animal manure
as a fertilizer and potential other uses; the impact of limitations placed on the use of animal
manure on consumers and agricultural operations; and the effects of increased competition for
manure due to biofuel uses. A report on the results of the study was due to respective agricultural
committees of the House and Senate by June 18, 2009 (one year after enactment).
Funding: No specific funding was announced for this study.
Title XV—Energy-Related Tax Provisions
Sec. 15321: Credit for Production of Cellulosic Biofuel
Function: Sec. 15321 of the 2008 farm bill established a new tax credit—the Cellulosic Biofuel
Producer Credit—uniquely for cellulosic ethanol producers, and at a substantially higher rate than
is available for corn-starch ethanol blenders. Prior to the 2008 farm bill’s enactment, all ethanol
(cellulosic included) blended into gasoline was eligible for a volumetric ethanol excise tax credit
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(VEETC) of $0.51 per gallon. The ethanol blender, not the producer, was eligible for the VEETC.
With the Cellulosic Biofuel Producer Credit, producers of cellulosic ethanol (produced
exclusively in the United States) are now eligible for a credit of $1.01 per gallon less the amount
of small-producer ethanol credit claimed and the alcohol mixture credit claimed for ethanol. The
Cellulosic Biofuel Producer Credit expires on December 31, 2012. (26 U.S.C. § 40)
Sec. 15322: Comprehensive Study of Biofuels
Function: Sec. 15322 requires the Secretary of Treasury, with USDA, DOE, and EPA, to
commission the National Academy of Sciences to produce a report on biofuels, including current
and projected production, economic and environmental impacts, government program impacts,
and the relative impacts of different types of biofuels on markets, trade, and infrastructure. The
report should also assess the ability to convert corn ethanol plants to other uses, compare corn
ethanol with other biofuels and renewable energy sources, and assess the need for additional
scientific inquiry and areas of interest for future research. The final report was due to Congress by
June 18, 2009 (12 months after the 2008 farm bill enactment), but to date, has not been
completed.
Funding: No specific funding was announced for this study.
Sec. 15331: Modification of Alcohol Credit
Function: As stated earlier, prior to passage of the 2008 farm bill, any ethanol blended into
gasoline was eligible for a tax credit of $0.51 per gallon as provided under previous law
(American Jobs Creation Act of 2004, P.L. 108-357) through December 31, 2010. Sec. 15331 of
the 2008 farm bill reduces the VEETC to $0.45 per gallon beginning in the first calendar year
after the year in which 7.5 billion gallons of ethanol is produced. In 2008 an estimated 9.2 billion
gallons of ethanol was produced, so the tax credit reduction was effective January 1, 2009. (26
U.S.C. § 40)
See below under Sec. 15333 for recent VEETC-related news.
Sec. 15332: Calculation of Volume of Alcohol for Fuel Credits
Function: A small amount of gasoline is added to pure ethanol at the production plant to “de-
nature” it (i.e., prevent it from being sold as alcohol), thereby converting it to “fuel” ethanol.
Prior to the 2008 farm bill, the volume of bio-alcohol counted as fuel eligible for the tax credit
could include up to 5% of the volume as denaturant. Sec. 15332 of the 2008 farm bill reduced the
permissible volume of denaturant to 2% for purposes of calculating the volume of alcohol eligible
for the tax credit. (26 U.S.C. § 40)
Sec. 15333: Ethanol Tariff Extension
Function: Imports of ethyl alcohol (Heading 9901.00.50 of the Harmonized Tariff Schedule
(HTS)) are subject to a most-favored nation duty of 14.27¢ per liter ($0.54 per gallon) and a 2.5%
ad valorem tariff (Heading 2207.10.60; HTS) on imports of un-denatured ethyl alcohol. The
import duty was to expire on December 31, 2008. Sec. 15333 of the 2008 farm bill extended the
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import duty of $0.54 per gallon for imported ethanol or mixtures of ethanol (heading 9901.00.50
of the HTS) through December 31, 2010.
The ethanol import duty (and the VEETC) were subsequently extended through December 31,
2011 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
(P.L. 111-312). On June 16, 2011, the Senate voted 73-27 to accept an amendment (S.Amdt. 476
to S. 782) that would have eliminated both the import duty and the VEETC. However, a cloture
vote on the underlying bill, S. 782, failed on June 21, 2011.
Sec. 15334: Limitations on Duty Drawback on Certain Imported Ethanol
Function: Sect 1313 of the Tariff Act of 1930, as amended, permits the refund of an import duty
if the duty-paid good is re-exported or used to make a good that is exported. This type of duty
refund is referred to as a “drawback.” Prior to the 2008 farm bill, a person who manufactured
gasoline using ethanol that was subject to the duty imposed under HTS 9901.00.50, could export
a qualifying substitute product to obtain the refund of the duty paid. Allowable substitute products
included either ethanol not subject to the duty, or another petroleum product (e.g., jet fuel which
does not contain ethanol). Sec. 15334 of the 2008 farm bill eliminates the ability to obtain a
refund of an import duty if the exported product contains no ethanol.
Additional Federal Renewable Energy Programs
Rural Development Agency (RDA), USDA
In addition to administering the Biorefinery Assistance Program, the Repowering Assistance
Program, the Bioenergy Program for Advanced Biofuels, the Rural Energy for America Program,
and the Biomass Research and Development Program as described above, the Rural Business-
Cooperative Service (RBCS) of USDA’s Rural Development Agency administers several
additional programs targeting both rural and agricultural activities that include funding
opportunities in the form of payments, grants, loans, and loan guarantees for the development and
commercialization of renewable energy, among other activities. The following programs within
RBCS could possibly be used to assist renewable energy producers:48
• Value-Added Producer Grant Program
• Business and Industry Guaranteed Loan Program
• Rural Economic Development Loan and Grant
• Rural Business Enterprise Grants
• Rural Business Opportunity Grant Program
• Cooperative Programs’ Energy Research
• Direct and Guaranteed Electric Loan Program
48 See CRS Report RL31837, An Overview of USDA Rural Development Programs. For program details, awards lists,
and other related information, see USDA’s RDA, at http://www.rurdev.usda.gov/.
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• High Energy Cost Grants Program
• Various residential energy programs that provide financial assistance for energy
efficiency additions or upgrades, including the Rural Energy Plus Program, the
Home Repair and Preservation Program, and Housing Preservation Grants
Natural Resources and Conservation Service (NRCS), USDA
In addition to the RD programs, USDA’s NRCS operates several conservation programs that
include energy efficiency components with funding available for both energy efficiency
improvements and assessments of energy-efficiency savings related to new energy technologies.
The following programs within NRCS could possibly be used to provide energy-efficiency
assistance:49
• Conservation Innovation Grants (CIG)
• Conservation loans
• Environmental Quality Incentives Program (EQIP)
DOE Renewable Energy Programs
The Department of Energy administers several programs that provide financial assistance for
energy efficiency, research and deployment, and renewable energy projects including various
loan, loan guarantee, and grant programs.50 In addition, DOE’s Office of Energy Efficiency and
Renewable Energy (EERE) provides funding for renewable energy and energy efficiency research
and development.51
Assessment of Federal Biofuels Policy
The impact of increased ethanol production on agricultural and rural economies was a subject of
debate during the farm bill process. As a result, the 2008 farm bill included provisions requiring a
series of reports assessing how ethanol production may be impacting the farm economy, the
environment, and consumer food prices. Among these are:
• the Comprehensive Study of Biofuels (Sec. 15332) to be conducted by USDA,
EPA, DOE, and the National Academy of Sciences (due by June 18, 2009);
• the Biofuels Infrastructure Study (Sec. 9002) by USDA, DOE, EPA, and DOT
(no deadline specified); and
• an assessment of the economic impacts of expanded cellulosic biomass
production on local economies and infrastructures as required by BCAP (due by
June 18, 2012).
49 For more information see NRCS, USDA, at http://www.nrcs.usda.gov.
50 For information on DOE funding opportunities, visit http://energy.gov/funding-opportunities. See also CRS Report
R40110, Biofuels Incentives: A Summary of Federal Programs, for a list of DOE programs specifically related to
biofuels.
51 For information on EERE financial assistance, see http://www1.eere.energy.gov/financing/types_assistance.html.
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In partial response to these study mandates, EPA, USDA, and DOE have produced several studies
concerning various issues related to biofuels since the 2008 farm bill was enacted on June 18,
2008. In addition, numerous studies have been produced by the federal government, academia,
and private think-tanks concerning the market effects of policy-driven biofuels production. A
selection of key official government studies, as well as key examples of academic and think-tank
studies, are listed in an Appendix to this report. The results or findings of these emerging reports
that are otherwise intended to measure the success of the various USDA energy programs could
result in subsequent adjustments to program implementation or to future legislation.
Energy Policy Issues for the 2012 Farm Bill
Program Expiration and Baseline Funding
Available funding to write the next farm bill will be based on the baseline projections of the cost
of current farm bill programs by the Congressional Budget Office, and on varying budgetary
assumptions about whether programs will continue. All thirteen bioenergy provisions of
Title IX—with the exception of Sec. 9010, the Feedstock Flexibility Program for Bioenergy
Producers—are authorized only for the life of the 2008 farm bill, FY2008 through FY2012. As a
result, they do not have a budgetary baseline beyond FY2012.52 Because of the current tight
budget situation, it seems highly unlikely that any new money will be available to fund new or
expiring programs. Therefore, the most likely way that any expiring energy programs can survive
is to offset their projected costs with reductions in other mandatory programs or from other cost
savings. See Table 1 for a list that includes expiring energy programs and their funding levels.
Possible Redundancy Across USDA and DOE Energy Programs
Although each of the various Title IX programs has somewhat different policy goals, most of
them end up funding very similar types of projects—anaerobic digesters, wind turbines, solar
panels, and biofuels. This is particularly true for the Bioenergy Program for Advanced Biofuels
and REAP funded projects, as well as DOE-funded projects under the 1703 and 1705 loan
guarantee programs. Also, research projects focused on renewable energy that are funded under
REAP and BRDI, as well as certain EERE-funded programs, appear to have some potential for
overlap. To actually measure the extent of overlap or similarity would require a project-by-project
comparison. In general, USDA programs tend to focus on the primary energy source or feedstock,
whereas DOE projects tend to focus on the conversion or processing technology; however, the
difference often appears subtle to a lay person. As a result, some policymakers suggest that some
energy programs could be merged or eliminated to counter possible redundancy, whereas others
(particularly those whose district benefits from specific programs) are quick to argue the merits of
the individual programs.
52 See CRS Report R41433, Previewing the Next Farm Bill: Unfunded and Early-Expiring Provisions.
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Cellulosic Biofuels Slow Development
The 2008 farm bill energy title provides more than $1 billion in financial incentives and support
to encourage the production and use of advanced (mainly cellulosic) biofuels.53 Grants and loan
guarantees leverage industry investments in new technologies and infrastructure, as well as in the
production of cellulosic feedstocks. However, the principal program designed to help “kick start”
the U.S. cellulosic biofuels sector was the Biomass Crop Assistance Program (BCAP, Sec. 9001).
BCAP addressed the quintessential “chicken and egg” problem—how do you encourage
producers to grow cellulosic biomass when there is no existing market for that biomass, and how
do you encourage investors to build cellulosic biofuels plants when there is no known existing
biomass feedstock supply? BCAP attempted to remove some of the risk for biomass growers by
supporting the production of dedicated crop and forest cellulosic feedstocks and by providing
incentives for harvest and post-production storage and transport.54
Despite support from BCAP and other federal programs, the cellulosic ethanol sector has been
slow to develop. While the conversion technology appears to work in the laboratory, it appears to
be difficult to move to the commercial stage. Currently, no cellulosic ethanol is produced on a
commercial scale. Only a few small refineries (mostly pilot or demonstration in scope) are
engaged in limited production. Due to the slow progress in cellulosic ethanol production, EPA has
been compelled to substantially reduce the cellulosic biofuel RFS mandates set by Congress for
the years 2010 through 2012—from 100 million gallons (mgals) in 2010 to a mandate of 6.5
mgals, from 250 mgals for 2011 to 6.6 mgals, and from 500 mgals for 2012 to a preliminary 3.5
to 12.9 mgals.55
The EPA waiver of the cellulosic biofuels RFS for three consecutive years, coupled with recent
limitations imposed on BCAP funding (see “Section 9011: Biomass Crop Assistance Program
(BCAP),” earlier in this report) and the increasing congressional climate of budget austerity,
likely increase the uncertainty associated with the future investments needed to kick start this
sector.56
53 Advanced biofuels include biofuels derived from cellulosic feedstocks; sugar and starch other than corn kernel-
starch; waste material including crop residue, animal, plant, or food waste; diesel fuel produced from renewable
biomass including vegetable oil and animal fat; butanol or other alcohols produced through the conversion of organic
matter; and other fuels derived from cellulosic biomass. For more information, see CRS Report RL34738, Cellulosic
Biofuels: Analysis of Policy Issues for Congress.
54 For more information on BCAP, see CRS Report R41296, Biomass Crop Assistance Program (BCAP): Status and
Issues.
55 U.S. EPA, Renewable Fuels: Regulations & Standards, at http://www.epa.gov/otaq/fuels/renewablefuels/
regulations.htm.
56 For more information, see CRS Report R41106, Meeting the Renewable Fuel Standard (RFS) Mandate for Cellulosic
Biofuels: Questions and Answers.
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Table 1. 2008 Farm Bill Authorized Funding for Energy Provisions, FY2008-FY2012
($ millions)
Sectiona
Provision
Name
Type FY2008 FY2009 FY2010 FY2011 FY2012 Total
Sec. 7205
Nutrient Management Res. & Ext. Init.
Discr.b
SSAN SSAN SSAN SSAN SSAN SSAN
Sec. 7207
Bioen. Fdstk + Energy. Eff. Res. & Ext. Init.
Discr.b $50 $50 $50 $50 $50 $250
Sec. 7526
Sun Grant Program
Discr.b $75 $75 $75 $75 $75 $375
Sec. 9002a
Federal
Biobased
Markets
Program
Mand. $1 $2 $2 $2 $2 $9
Discr.b $0 $2 $2 $2 $2 $8
Sec. 9003a
Biorefinery Assistance Program
Mand.
$0
$75
$245
$0
$0
$320
Discr.b $0 $150 $150 $150 $150 $600
Sec. 9004a
Repowering Assistance Program Mand. $0 $35 $0 $0 $0 $35
Discr.b $0 $15 $15 $15 $15 $60
Sec. 9005a
Bioenergy Program for Adv. Biofuels
Mand.
$0
$55
$55
$85
$105
$300
Discr.b $0 $25 $25 $25 $25 $100
Sec. 9006a
Biodiesel
Fuel
Education
Program Mand. $1 $1 $1 $1 $1 $5
Sec. 9007a
Rural Energy for America Prog. (REAP)
Mand.
$0
$55
$60
$70
$70
$255
Discr.b $0 $25 $25 $25 $25 $100
Sec. 9008a
Biomass Research and Dev. Act (BRDA)
Mand.
$0
$20
$28
$30
$40
$118
Discr.b $0 $35 $35 $35 $35 $140
Sec. 9009a
Rural Energy Self-Sufficiency Initiative
Discr.b $0 $5 $5 $5 $5 $20
Sec. 9010a
Feedstock Flex. Prog. for Bioenergy Prod.
Mand.
SSAN
SSAN
SSANc SSAN SSAN SSAN
Sec. 9011a
Biomass Crop Assistance Prog. (BCAP) Mand.
SSAN
SSAN SSAN SSAN SSAN SSAN
Sec. 9012a
Forest Biomass for Energy
Discr.b $0 $15 $15 $15 $15 $60
Sec. 9013a
Community Wood Energy Program
Discr.b $0 $5 $5 $5 $5 $20
Sec.
9002
Biofuels
Infrastructure
Study
None $0 $0 $0 $0 $0 $0
Sec. 9003
Renewable Fertilizer Study
Discr.b $0 $1 $0 $0 $0 $1
Total Discretionary Funding Authorizedb
$125 $403 $402 $402 $402
$1,734
Total Mandatory Funding Authorized
$2 $243 $391 $188 $218
$1,042
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Renewable Energy Programs and the Farm Bill: Status and Issues
Source: P.L. 110-246 (Food, Conservation, and Energy Act of 2008).
Notes: “SSAN” = Such sums as necessary.
a. Section 9001 of the 2008 farm bill (P.L. 100-246) amends Title IX of the 2002 farm bill (P.L. 107-171). Sections 9001 through 9013 of the table are the amended
section numbers.
b. Many of the discretionary programs never received any funding or received lesser amounts through the annual appropriations process than originally authorized in the
farm bill.
c. The authority for funding under BCAP was reduced to $552 million in FY2010 and $432 million in FY2011 under the Supplemental Appropriations Act of 2010 (P.L.
111-212). BCAP funding for FY2011 was reduced a second time to $112 million under the Department of Defense and Full-Year Continuing Appropriations Act, 2011
(P.L. 112-10).
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Table 2. 2008 Farm Bill Energy Provision Funding: Authorized and Available, FY2010 to FY2012
($ millions)
FY2008
FY2009
FY2010
FY2011
FY2012
Funds
Sectiona Provision
Name Type
FB
Available
FB
Available
FB
Available
FB
Available
FB
Available
Sec. 7205
Nutrient Man. Res. & Ext. Init.
Discr.
SSAN
$0
SSAN
$0
SSAN
$0
SSAN
$0
SSAN
NA
Sec. 7207
Bio.Fdstk+En.Eff.Res.&Ext.
Discr. $50 $0 $50 $0 $50 $0 $50 $0 $50
NA
Init.
Sec. 7526
Sun Grant Program
Discr.
$75
$0
$75
$0
$75
$2
$75
$0
$75
NA
Sec. 9002
Fed. Biobased Markets Prog.
Mand. $1 $1 $2 $2 $2 $2 $2 $2 $2
NA
Discr.
$0
$0
$2
$0
$2
$0
$2
$0
$2
NA
Sec. 9003
Biorefinery Assist. Prog.
Mand.b $0 $0 $75 $75 $245
$245b $0 $0b $0
NA
Discr.
$0
$0
$150
$0
$150
$0
150
$0
$150
NA
Sec. 9004
Repowering Assistance Prog.
Mand.b $0 $0 $35 $35
$0
$20b $0
$0b $0
NA
Discr.
$0
$0
$15
$0
$15
$15
$15
$0
$15
NA
Sec. 9005
Bioen. Prog. for Adv. Biof.
Mand.b $0 $0 $55 $55 $55
$55b $85
$85b $105 NA
Discr.
$0
$0
$25
$0
$25
$0
$25
$0
$25
NAc
Sec. 9006
Biodiesel Education Prog.
Mand.
$1 $1 $1 $1
$1 $1 $1 $1 $1
NA
Sec. 9007
REAP
Mand.b $0 $0 $55 $55 $60 $60b $70
$70b $70
NAc
Discr.
$0
$36
$25
$5
$25
$40
$25
$5
$25
NA
Sec. 9008
BRDI
Mand.b $0 $0 $20 $20 $28 $28b $30
$30b $40
NA
Discr.
$0
$0
$35
$0
$35
$0
$35
$0
$35
NA
Sec. 9009
Rural Energy Self-Suff. Init.
Discr. $0 $0 $5 $0 $5 $0 $5 $0 $5
NA
Sec. 9010
Fdsk Flx. Prog. for Bio. Prod.
Mand.
SSAN
SSANd SSAN
SSANd SSAN
SSANd SSAN
SSANd SSAN
NAd
Sec. 9011
BCAP
Mand.
SSAN
SSAN
SSAN
SSAN
SSAN
$552e SSAN $112f SSAN
NAc
Sec. 9012
Forest Biomass for Energy
Discr. $0 $0 $15 $0 $15 $0 $15 $0 $15
NA
Sec. 9013
Comm. Wood Energy Prog.
Discr. $0 $0 $5 $0 $5 $0 $5 $0 $5
NA
Source: Compiled by CRS using the Food, Conservation, and Energy Act of 2008 (P.L. 110-246), the President’s annual budget, and annual appropriations acts.
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Renewable Energy Programs and the Farm Bill: Status and Issues
Notes: FB = 2008 farm bill authorized level; Available = for discretionary funds it is the amount appropriated, for mandatory funds it is the amount authorized in the 2008
farm bill less any reductions in annual appropriations acts.
a. Section 9001 of the 2008 farm bill (P.L. 110-246) amends title IX of the 2002 farm bill (P.L. 107-171). Sections 9002 through 9013 of the table are the amended section
numbers.
b. Title IX programs 9003, 9004, 9005, 9007, and 9008 include funding that is authorized “to remain available until expended,” therefore carryover could exist from
previous years if funds are unobligated.
c. The House-passed FY2012 appropriation bill, Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2012 (H.R.
2112) would eliminate mandatory funding for BCAP and REAP, reduce mandatory funding for the Bioenergy Program for Advanced Biofuels to $55 million, and reduce
REAP discretionary funding to $2.2 million. The Senate has not yet acted upon an FY2012 appropriations bill.
d. This program is “triggered” when a sugar surplus exists. According to USDA, the Commodity Credit Corporation (CCC) does not have a surplus inventory of sugar,
therefore this program has not been implemented.
e. The Supplemental Appropriations Act of 2010 (P.L. 111-212) limits mandatory spending on BCAP by al owing no more than $552 mil ion in FY2010 and $432 million in
FY2011. For more on these types of changes in mandatory program spending, see CRS Report R41245, Reductions in Mandatory Agriculture Program Spending. For more
information on the 2010 supplemental, see CRS Report R41255, FY2010 Supplemental Appropriations for Agriculture.
f.
BCAP funding for FY2011 was reduced a second time to $112 million under the Dept. of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10).
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Renewable Energy Programs and the Farm Bill: Status and Issues
Appendix. Key Reports on Biofuels
Chronologically Ordered Federal Government Reports
DOE, U.S. Billion-Ton Update: Biomass Supply for a Bioenergy and Bioproducts Industry, Oak
Ridge National Laboratory (ORNL), DOE, August 2011; available at
http://www1.eere.energy.gov/biomass/pdfs/billion_ton_update.pdf.
USDA, Renewable Power Opportunities for Rural Communities, Office of Energy Policy and
New Uses, USDA Office of the Chief Economist, April 2011; available at http://www.usda.gov/
oce/reports/energy/RenewablePowerOpportunities-Final.pdf.
USDA, Effects of Increased Biofuels on the U.S. Economy in 2022, Mark Gelhar, Ashley
Winston, and Agapi Somwaru, Econ. Res. Report No. 102, ERS, USDA, October 2010; available
at http://www.ers.usda.gov/Publications/ERR102/ERR102.pdf.
U.S. EPA, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis, EPA-420-R-
10-006, Assessment and Standards Division, Office of Transportation and Air Quality, U.S. EPA,
February 2010; available at http://www.epa.gov/otaq/renewablefuels/420r10006.pdf.
USDA, Ethanol and a Changing Landscape, Scott Malcolm, Marcel Aillery, and Marca
Weinberg, Economic Research Report No. 86, ERS, USDA, November 2009; available at
http://www.ers.usda.gov/Publications/ERR86/.
USDA-DOE-EPA, Increasing Feedstock Production for Biofuels: Economic Drivers,
Environmental Implications, and the Role of Research, Interagency Biomass Research and
Development Board, December 2008; available at http://www.usbiomassboard.gov/pdfs/
8_Increasing_Biofuels_Feedstock_Production.pdf.
USDA-DOE, National Biofuels Action Plan, Biomass Research and Development Board, October
2008; available at http://www1.eere.energy.gov/biomass/pdfs/nbap.pdf.
Selected Non-Governmental Reports
Bruce A. Babcock, The Impact of U.S. Biofuels Policies on Agricultural Price Levels and
Volatility, Issue Paper No. 35, International Center for Trade and Sustainable Development,
Geneva, Switzerland, June 2011; available at http://www.ictsd.org.
FAPRI, U.S. Biofuel Baseline and Impact of Extending the $0.45 Ethanol Blenders Credit,
FAPRI-MU Report #07-11, FAPRI, June 27, 2011; available at http://www.fapri.missouri.edu/.
CARD, The Impact of Ethanol and Ethanol Subsidies on Corn Prices: Revisiting History, Bruce
A. Babcock and Jacinto F. Fabiosa, Center for Agricultural Research and Development (CARD),
CARD Policy Brief 11-PB 5, April 2011; available at http://www.card.iastate.edu/.
CARD, Mandates, Tax Credits, and Tariffs: Does the U.S. Biofuels Industry Need Them All?
Bruce A. Babcock, CARD Policy Brief 10-PB-1, March 2010; available at
http://www.card.iastate.edu/.
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Renewable Energy Programs and the Farm Bill: Status and Issues
Rice University, Fundamentals of a Sustainable U.S. Biofuels Policy, James A. Baker III Institute
for Public Policy, January 2010; available at http://bakerinstitute.org/publications/EF-pub-
BioFuelsWhitePaper-010510.pdf.
FAPRI, Impacts of Selected U.S. Ethanol Policy Options, FAPRI-MU Report #04-09, Food and
Agricultural Policy Research Institute (FAPRI), May 2009; available at
http://www.fapri.missouri.edu/.
CARD, Biofuels: Potential Production Capacity, Effects on Grain and Livestock Sectors, and
Implications for Food Prices and Consumers, Dermot J. Hayes, Bruce A. Babcock, et al., CARD
Working Paper 09-WP 487, March 2009; available at http://www.card.iastate.edu/.
FAPRI, Biofuels: Impacts of Selected Farm Bill Provisions and other Biofuel Policy Options,
FAPRI-MU Report #06-08, FAPRI, June 2008; available at http://www.fapri.missouri.edu/.
Author Contact Information
Randy Schnepf
Specialist in Agricultural Policy
rschnepf@crs.loc.gov, 7-4277
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