Development Will Contribute to America's Strong Bioeconomy and Bring Jobs to Rural Areas
WASHINGTON, July 25, 2016 – Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture (USDA) is seeking applications for funding to help support the development of advanced biofuels, renewable chemicals and biobased products.
"The bioeconomy is a catalyst for economic development in rural America, creating new jobs and providing new markets for farmers and ranchers," Vilsack said. "Investing in the businesses and technologies that support the production of biofuels and biobased products is not only good for farm incomes. The whole economy benefits from a more balanced, diversified and consumer-friendly energy portfolio, less dependence on foreign oil and reduced carbon emissions."
Funding is being provided through the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program, formerly known as the Biorefinery Assistance Program. Congress established the program in 2008 to encourage the development of biofuels that use renewable feedstocks. The 2014 Farm Bill expanded the program to include renewable chemicals and biobased product manufacturing. The program now provides loan guarantees of up to $250 million to develop, construct and retrofit commercial-scale biorefineries and to develop renewable chemicals and biobased product manufacturing facilities.
USDA has provided $844 million in loan commitments to 10 businesses in the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program since the start of the Obama administration. Companies receiving these commitments are projected to produce 159 million gallons of advanced biofuels.
In 2011, under this program, USDA provided Sapphire Energy a $54.5 million loan guarantee to build a refined algal oil commercial facility. Sapphire's "Green Crude Farm" in Columbus, N.M., is an example of how USDA funding and partnerships with the private sector are helping to support the development of biorefineries.
The plant opened in May 2012 and is producing renewable algal oil that can be further refined to replace petroleum-derived diesel and jet fuel. According to the company, more than 600 jobs were created during the first phase of construction at the facility and 30 full-time employees currently operate the plant. After Sapphire received additional equity from private investors, it repaid the remaining balance on its USDA-backed loan in 2013.
USDA is helping to develop the bioeconomy, which has the potential to spur unprecedented growth in the rural economy by creating opportunities for the production, distribution and sale of biobased products and fuels. For example, USDA has partnered with the U.S. Department of Energy and the Navy to create advanced drop-in biofuels that will power both the Department of Defense and private-sector transportation throughout America. Over the course of this Administration, USDA has invested $332 million to accelerate research on renewable energy ranging from genomic research on bioenergy feedstock crops, to development of biofuel conversion processes and cost/benefit estimates of renewable energy production. For more information on how renewable energy factors into USDA's work to reduce greenhouse gases, visit the latest chapter of USDA's Medium entry, How Food and Forestry Are Adapting to a Changing Climate.
The Department has also taken steps to support biobased product manufacturing that promises to create new jobs across rural America – including adding new categories of qualified biobased products for Federal procurement and establishing reporting by Federal contractors of biobased product purchases. The more than 2,200 products that have received certification to display the USDA Certified Biobased Product label are creating and increasing consumer and commercial awareness about a material's biobased content as one measure of its environmental footprint. A 2015 USDA study of the bioeconomy found that the biobased products industry generates $369 billion and 4 million jobs each year for our economy. Biobased products industries directly employ approximately 1.5 million people, while an additional 2.5 million jobs are supported in other sectors.
For this announcement, USDA will seek applications in two cycles. Applications for the first funding cycle are due October 3, 2016. Applications for the second cycle are due April 3, 2017. For more information, see page 48377 of the July 25, 2016, Federal Register. Application materials can be found on USDA's Rural Development website.
In October 2015, Rural Development implemented a redesigned two-phase application process. This new process helps the Agency identify the projects that have made the most progress in the development stage and have the greatest capacity for implementation and loan closing. The first two application cycles under the new process yielded complete applications from projects producing biogas, biodiesel, cellulosic ethanol, biobased lubricants and oils, lignin cake and syrup, and fertilizers.
Eligible borrowers include individuals, corporations, federally-recognized tribes, units of state or local government, farm cooperatives and co-op organizations, associations of agricultural producers, national laboratories, institutions of higher education, rural electric cooperatives, public power entities – or a consortium of any of these borrower types. Entities that receive program financing must provide at least 20 percent of the funding for eligible project costs.
Since 2009, USDA Rural Development (@USDARD) has invested $11 billion to start or expand 103,000 rural businesses; helped 1.1 million rural residents buy homes; funded nearly 7,000 community facilities such as schools, public safety and health care facilities; financed 185,000 miles of electric transmission and distribution lines; and helped bring high-speed Internet access to nearly 6 million rural residents and businesses. For more information, visit www.usda.gov/results.
USDA is an equal opportunity provider, employer and lender.