May 26, 2008

Volume 86, Number 21

p. 8

Legislation

Farm Bill Moves Ahead

Energy provisions focus on cellulosic biofuels

Jeff Johnson

AFTER 18 MONTHS of haggling by lawmakers and a few near-death experiences, a five-year, $300 billion farm bill is close to becoming law. On May 21, President George W. Bush vetoed the bill, but the House easily overturned the veto, and the Senate was believed likely to do the same as C&EN went to press.

The bill proposes a wide range of subsidies and support to farmers, coupled with more spending on nutrition and conservation programs. But it also includes some $1 billion in agricultural energy funding, particularly to encourage biofuels development from nonfood cellulosic feedstocks, as well as provisions to support renewable-energy use in farm production.

The bill would provide $320 million in loan guarantees for biorefineries that produce advanced biofuels, including cellulosic ethanol. It would offer another $300 million in support and incentives to aid production of advanced feedstocks made from agricultural and forest crops, cellulosic materials, and waste materials, including manure and livestock waste.

The farm bill also creates a new cellulosic biofuel tax credit of $1.01 per gal, which would continue through 2012. The current production tax credit for corn-based ethanol would be cut from 51 cents per gal to 45 cents per gal. The 54-cent-per-gal tariff on ethanol imports would remain in place but end in 2010.

To encourage use of renewable-energy systems and greater farm efficiency, the bill includes some $250 million in grants and loan guarantees for farmers, biofuels producers, and rural small businesses. Also, $120 million would be available for biomass R&D to encourage development of noncorn feedstocks and to increase efficiency of biofuels production.

A host of agricultural interests, including the Biotechnology Industry Organization, embraced the bill. BIO singled out incentives to accelerate commercial cellulosic biofuels production.

In his veto message, Bush cited the farm bill's cost, particularly provisions that would give subsidy payments to farmers with adjusted annual incomes of up to $1.5 million.

Chemical & Engineering News

ISSN 0009-2347

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