US Biofuel Wins 75% Subsidy

A joint scheme between the US Department of Agriculture (USDA) and the Federal Aviation Administration (FAA) to promote “green” aviation fuel, as well as the findings of a USDA report into biofuels, were also announced by Agricultural Secretary Tom Vilsack last night.

In a dual approach, BCAP will provide up to 75% of producers’ costs in establishing eligible crops in specific areas, while also offering longer-term support for up to five years for annual or non-woody perennial crops and for up to 15 years for woody perennial crops, he told the National Press Club in Washington.

Matching payments will assist the transport of eligible materials to qualified biomass conversion facilities.

The programme, which had operated as a pilot scheme, is now activated with the publication by Vilsack of a “final rule”. Authorised in the Food, Conservation and Energy Act of 2008, BCAP is aimed at ensuring a large enough base of new, non-food, non-feed biomass crops is established in anticipation of future renewable energy demand.

“Domestic production of renewable energy, including biofuels, is a national imperative and that’s why USDA is working to assist in developing a biofuels industry in every corner of the nation,” he said.

A five-year agreement between the US Department of Agriculture (USDA) and the Federal Aviation Administration (FAA) will research the production of jet fuel from forest and crop residues and other “green” feedstocks, he added. The joint initiative aims to cut dependence on foreign oil and to stabilise fuel costs by assessing different feedstocks for bio-refineries.

A wider research plan through USDA’s five Regional Biomass Research Centers is directed at accelerating development of a commercial advanced biofuels industry in the US – including as many rural areas as possible to spread the economic benefits.

The USDA has also released an updated version of ‘Effects of Increased Biofuels on the US Economy in 2022’, a report by the USDA’s Economic Research Service (ERS), which found that replacing more petroleum with cost-competitive biofuels would cut crude oil imports, reduce energy prices and aid the economy.

The ERS report found that cost-cutting technology in biofuels is set to raise workers’ wages while improving the productivity of the overall economy. The emergence of next-generation biofuels is also expected to drive down the cost of producing ethanol as output rises.

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