Process Management

News 208 views last update:6 Aug 2012

Bill tempts farmers to grow energy crops

Legislation introduced in the US Senate this week would tempt farmers located near ethanol biorefineries to grow dedicated energy crops.

The bill, introduced by South Dakota republican senator John Thune, would offer incentives to farmers who plant switchgrass, fast-growing trees and other cellulosic feedstocks and deliver them to the nation's next generation of ethanol plants.

"For cellulosic to achieve its potential, Congress needs to help this industry overcome some of the initial market barriers," Thune said.

"And if we are serious in the country about reducing our dependence upon foreign oil, we have to be serious about giving the necessary jump start to America's budding alternative fuels industry and the farmers who supply it."

Thune said he hopes the legislation will be included in the energy section of the farm bill, which is up for review by Congress this year.

Huge investments
Since February, the US Department of Energy already awarded $585 million in grants for short and long term projects to help companies to develop biorefeneries.

Under the new bill the US Department of Agriculture would determine the likelihood of construction of a future biorefinery, the local potential for feedstock production, the number of interested farmers and a biorefinery's economic impact.

The bill would likely fund 10 to 12 feasibility studies, each costing about $50,000. Once a project is approved, farmers could enroll eligible land in the program.

$45 incentive
During a contract's first five years - as the ethanol plant is built and the crop is getting established - farmers would receive a cost share and a per-acre rental payment. Once the biorefinery starts up, the rental payment would end and the farmer would get a matching payment of up to $45 for each ton of delivered biomass for up to two years.

The bill would also authorize matching payments, capped at $45 per ton, to farmers anywhere in the US who sell crop byproducts and residues such as corn stover and wheat straw to ethanol plants.

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