Ethanol Provisions in Farm Bill

Cindy Zimmerman

Congressional negotiators Thursday announced a compromise 2007 Farm Bill that has new incentives for biofuels production.

“The new Farm Bill will dramatically ramp up the agricultural sector’s capacity to produce clean, renewable energy,” said conference committee chairman Senator Tom Harkin (D-IA). “Significantly, it provides more than a billion dollars to expand the supply of fuels made from biomass and crop by-products, other than grain.”

According to Senator Saxby Chambliss of Georgia, the ranking Republican on the Senate Agriculture Committee, the bill invests $320 million for new loan guarantee program for the development and construction of commercial-scale biorefineries; provides $300 million in the Bioenergy Program to provide assistance to biofuel production plants for the purchase of feedstocks; provides $118 million for biomass research and development efforts; reauthorizes and provides $250 million for grants and loan guarantees for renewable energy and energy efficiency projects; and authorizes a new program, the Biomass Crop Assistance Program to help producers transition to new energy crops for biofuel production.

To help pay for the Farm Bill, negotiators cut the blenders tax credit for corn-based ethanol from 51 cents to 45 cents and initiated a tax credit for cellulosic ethanol. The bill also includes language which calls on the federal government to buy surplus sugar and sell it to ethanol producers, where it would be used in a mixture with corn.

As soon as the compromise Farm Bill was announced, the administration issued a statement promising a presidential veto because it lacks “significant reform and increases spending by nearly $20 billion.” However, House and Senate ag leadership are working on a strategy to override a veto.

Biodiesel, Cellulosic, Ethanol, Government, News