Nebraska Senator Ben Nelson and South Dakota Senator John Thune are introducing legislation to promote the development and production of celluosic ethanol.
The Biofuels Innovation Program Act of 2007, provides business planning and assistance matching grants of up to $30,000 for entities and communities interested in developing a project area for producers to begin producing dedicated energy and biomass crops, as well as for attracting or creating a cellulosic biofuels facility.
Grant applicants would have to submit a proposal that identifies eligible cropland and indicates the area has a strong likelihood for producing biomass for energy. The proposals would have to include a letter of commitment from an existing or proposed biofuels production facility to use the feedstock for producing biofuels or other energy.
Once the grant is approved, the areas around the plant (within a 75 mile radius) would be classified as Biofuels Innovations Program (BIP) Project Areas, making them eligible for transitional assistance for the production of biomass feedstock.
The assistance would be provided in the form of a percentage of the establishment cost incurred by a producer to plant and grow a biomass crop, as well as yearly rental payments on the land that is growing the biomass crop for the first five years of the BIP contract.
This would help producers get energy and biomass crops established and growing at the same time that the cellulosic biofuel plant is being built so that the feedstock will be ready when the biofuel plant needs it.
Finally, the bill provides optional transitional assistance in the form of a matching payment to producers for the purchase of the biomass by the biofuel facility.
“Celluosic ethanol has always faced a chicken-or-the-egg problem: it’s difficult to start commercial production without a guaranteed supply of biomass, but it’s hard to encourage farmers to grow the biomass unless they know they’ll have a market,” said Nelson. “This legislation will help resolve that problem by encouraging the construction of biofuel facilities while simultaneously pushing the production of biomass.”
“Cellulosic ethanol has incredible potential to supplement corn-based ethanol. But if cellulosic ethanol is to achieve its potential, it is critical that Congress help this industry overcome initial market barriers. This legislation would spur the construction of biorefineries across the country and provide incentives to farmers in surrounding areas to grow energy dedicated crops that can eventually supply these biorefineries in a cost-effective, environment-friendly way,” Thune said.
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