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USDA Readies Expanded Biofuels Initiatives, Including FAA Jet Fuel Project

October 27, 2010

The U.S. Department of Agriculture (USDA) announced a series of measures on October 21 to promote production of biofuels from renewable sources. USDA will publish a final rule to implement the Biomass Crop Assistance Program (BCAP), which has operated as a pilot since 2009. Under the BCAP final rule, USDA will resume making payments to eligible producers. Authorized in the Food, Conservation, and Energy Act of 2008, BCAP is designed to ensure that a sufficiently large base of new, non-food, non-feed biomass crops is planted to meet future demand for renewable energy consumption. The overall goal of the measure is to create jobs and mitigate the effects of climate change.

BCAP uses a dual approach to support the production of renewable energy. First, BCAP assists with the establishment and production of eligible renewable biomass crops within specified project areas. Producers who enter into BCAP contracts may receive payments of up to 75% of the cost of establishing eligible perennial crops. Further, they can receive payments for up to five years for annual or non-woody perennial crops and for up to 15 years for woody perennial crops. In addition, BCAP assists agricultural and forest landowners and operators by providing matching payments for the transportation of certain eligible materials that are sold to qualified biomass conversion facilities. The facilities convert the materials into heat, power, biobased products, or advanced biofuels.

USDA also announced jointly with the Federal Aviation Administration (FAA) a five-year agreement to develop aviation fuel from forest and crop residues and other green feedstocks in order to decrease dependence on foreign oil and stabilize aviation fuel costs. Under the partnership, the agencies will work together to assess the availability of different kinds of feedstocks that could be processed by bio-refineries to produce jet fuels. The cooperative agreement supports a larger research plan led by USDA through its five regional biomass research centers, which will help accelerate the development of a commercial advanced biofuels industry across the United States. A report by the USDA's Economic Research Service (ERS) determined that replacing more petroleum with cost-competitive domestic biofuels reduces crude oil imports, thereby lowering prices for energy and benefiting the U.S. economy. See the USDA press release, the ERS report, the BCAP Web site, and the FAA press release.

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Content Last Updated: 01/25/2010