Loan Program Needs Changes to Advance Cellulosic Ethanol

Cindy Zimmerman

An ethanol industry group says the loan guarantee program at the U.S. Department of Energy needs to function more efficiently and effectively to make capitol available to advance next generation biofuels like cellulosic ethanol.

Renewable Fuels Association LogoThe Renewable Fuels Association (RFA) is asking US Department of Energy (DOE) Secretary Steven Chu to make needed changes in the loan guarantee program for biorefineries.

“A fundamental flaw of the loan guarantee program is that DOE is weighing the applications of emerging technology projects such as cellulosic ethanol using the same criteria as mature technology projects, and against more mature technologies, such as wind and solar, that have been commercialized in other countries. The challenges facing next generation advanced biofuels are simply much different than those of the renewable power sector,” wrote RFA President and CEO Bob Dinneen, who says DOE “must recognize the unique challenges of emerging biofuel technologies and establish criteria appropriate to them.”

RFA is asking DOE to take four specific actions:
1. Eliminate the requirement that applicants have year-long off-take agreements in place.
2. Recognize that applicants, by definition, may not have commercial scale financial data and to consider applications that “employ new or significantly improved technologies compared to commercial technologies in service in the U.S.” as outlined in the law.
3. Review applications that have been declined to determine what fixes can be made to correct perceived deficiencies.
4. Replace the $2 billion borrowed for the “Cash for Clunkers” program at the first opportunity.

Read RFA’s letter to DOE here.

Ethanol, Ethanol News, Government, RFA