WEST LAFAYETTE, Indiana, US, March 28, 2007.
The U.S. Department of Agriculture will provide US$176.5 million in loan guarantees and $11.4 million in grants to support investments in renewables and energy efficiency improvements by agricultural producers and small businesses.
The Renewable Energy & Energy Efficiency loan and grant program was established under the 2002 Farm Bill, and provides funds to purchase and install renewable energy systems or to make energy efficiency improvements. Loan guarantees can cover 50% of a project's cost (to $10 million) while grants are available for 25% of a project (maximum of $250,000 for energy efficiency and $500,000 for renewable energy).
The loans and grants are expected to reduce GHG emissions by 1 Mt, replace 821 million barrels of foreign oil and generate 2 million kWh of electricity each year. USDA has funded 800 loans and grants since the renewable energy program began in 2003.
“By promoting energy efficiency and development of energy sources that are farm based and renewable, we're taking another step toward achieving the President's goal of reducing America's gasoline consumption by 20% in ten years,” says agriculture secretary Mike Johanns. “We hope to dramatically expand renewable energy programs like these, as reflected in our 2007 farm bill proposals.”
The farm bill proposals recommend an increase of $1.6 billion for funding to renewables, including a $2.1 billion loan guarantee program, a $500 million bioenergy and bioproducts research program, $500 million for alternative energy and energy efficiency grants, and other initiatives. The 2008 budget proposal for USDA includes $397 million for energy projects, an increase of $161 million, of which $132 million would go to renewable energy loans and grants.
Applications for grants must be submitted by May 18 while the deadline for loan applications is July 2.
“We heard ... real excitement about renewable energy and our proposals reflect that enthusiasm by providing $1.6 billion in new funding for renewable energy research, development, and production targeted to cellulosic ethanol, which creates fuel from switchgrass, wood chips and other biomass,” Johanns explained after touring a cellulosic research laboratory at Purdue University. “Our proposals will help our nation to expand beyond corn ethanol toward cellulosic ethanol, which could be produced in virtually every state.”
The farm bill proposals released January 31 are based on suggestions from farmers, ranchers and other stakeholders during 52 meetings across the country and represent the final phase of a two-year process.
