USDA Budget Request Includes Increased Funding for Renewable Energy

The President’s FY 11 budget request includes $762 million for U.S. Department of Agriculture (USDA) farm energy programs, and requests $220 million for Department of Energy biomass and bioenergy programs. Additional bioenergy-related funding is provided through the DOE’s energy sciences program, which funds the ongoing Bioenergy Research Centers. Additional funding also may be provided on a competitive basis through DOE’s Energy Advanced Research Projects Agency and DOE’s Innovative Technology Loan Guarantee Program.

Overall biomass energy funding levels (mandatory and discretionary) would increase a little more than five percent in FY 11 compared to the FY 10 regular appropriations. Bioenergy programs also have received a significant infusion of additional funds ($777 million) in FY 09 and FY 10 through the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). In addition, significant additional federal mandates and incentives for bioenergy production are provided through the Renewable Fuel Standard and in the tax code (various biofuel and biopower producer tax credits, investment tax credits, and fuel blender tax credits).

Highlights within the President’s FY 11 budget request for USDA are:

• The budget request reflects the administration’s continuing commitment to accelerating the deployment of advanced biofuel biorefineries and technologies. In the wake of almost $1 billion in DOE funding in regular appropriations and additional ARRA funds committed to this in FY 09 and FY 10, the administration would further increase the USDA Biorefinery Assistance Program’s budget by another $17 million. Adding $17 million in discretionary funds in FY 11 to the $245 million appropriated previously will allow the program to guarantee loans up to a total of $950 million for biorefinery projects.
• The cost of the Biomass Crop Assistance Program (BCAP) is growing the fastest. The program was recently authorized in the 2008 farm bill. It provides matching payments for the collection, harvest, storage and transport of biomass feedstocks to USDA-approved energy conversion facilities. The program is critical to developing sustainable biomass feedstocks for advanced, low carbon biofuels and other bioenergy applications. The program’s rapid growth far surpassed expectations, and it has led to unintended competition for feedstocks within the wood products industry. The USDA expected to spend $15 million on the program in FY 10, but it is now likely to spend more than $263 million this year, increasing to $479 million in FY 11. Congress and the administration are likely to give this program a second look this year.