US government is offering more than $1.5 billion in assistance, from field to filling station, to bring next-generation biofuels to market, Agriculture Secretary Tom Vilsack said on Thursday.
Vilsack said the aid would assure renewable fuel consumption reaches 36 billion gallons by 2022, with the bulk of it coming from non-food sources such as grass, algae or woody plants.
During a speech, Vilsack also urged Congress to revive a biodiesel tax credit and to extend, possibly at a lower rate, an ethanol tax credit due to expire on Dec 31. He said a 54-cent-a-gallon tariff on imported ethanol was likely to continue but eventually be phased out.
Biofuels are a favorite cause in the U.S. Midwest, where the ethanol industry is concentrated. Vilsack announced the biofuels aid less than two weeks before mid-term elections when Republicans are expected to gain seats. Two-thirds of the most competitive U.S. House races are in rural districts.
Ethanol makers will produce about 13 billion gallons of the renewable fuel this year, chiefly from corn. A 2007 law requires annual use of 36 billion gallons from 2022 and reserves 21 billion gallons of it for "advanced" biofuels.
The number of biorefineries would have to double at a minimum to meet the biofuel goal. There are 204 plants in half of the U.S. states. The average plant employs 40-50 people and spends $130 million a year on supplies, wages and transportation.
Vilsack listed four steps to expand biofuel production and usage:
–Launch of the Biomass Crop Assistance Program, which pays up to 75 percent of farmers' costs to grow and harvest biomass crops for use in nearby bioengineered or biopower plants. Forestland owners can qualify for payments on materials harvested from forest health or ecosystem restoration and used in bioplants. Cost is estimated at $461 million over 15 years.
