The Farm, Nutrition and Bioenergy Act of 2008 passed by Congress last week has some significant incentives to promote second generation ethanol.

Among them are a cellulosic biofuels production tax credit for up to $1.01 per gallon; funding for loan guarantees to commercial scale bio-refineries for advanced biofuels; a program to encourage farmers to establish and grow biomass crops in areas around biomass facilities; and continuation of research and development through the biomass energy research program administered jointly by the Departments of Agriculture and Energy. The bill more than doubles current funding, providing $118 million for research.

Carlos Riva, president of cellulosic ethanol firm Verenium, says the provisions in the bill will speed the development of cellulosic ethanol toward commercialization.

“America is preparing for the next important wave of alternative fuels, and this bill is a watershed moment in our national effort to develop energy that reduces greenhouse gas emissions and lessens America’s dependence on foreign oil,” said Riva.

Verenium operates one of the nation’s first cellulosic ethanol pilot plants in Jennings, Louisiana and is preparing to cut the ribbon at its 1.4 million gallon-per-year demonstration-scale facility in the same location on May 29.