Support for Biofuel Feedstock Producers Announced

US - Agriculture Secretary Tom Vilsack has announced payments for 125 advanced Biofuel producers across the country to support the production and expansion of advanced biofuels from a wide variety of non-food sources, including waste products.

30 July 2012

2 minute read

North America

"Advanced biofuels are a key component of President Obama's 'all-of-the-above' energy strategy to reduce the Nation's reliance on foreign oil and take control of America's energy future," said Secretary Vilsack. "These payments represent help spur an alternative fuels industry using renewable feedstocks grown in America, broadening the range of feedstock options available to biofuels producers, helping to create an economy built to last."

The funding is being provided through USDA's Bioenergy Programme for Advanced Biofuels, which was established in the 2008 Farm Bill. Under this Programme, payments are made to eligible producers based on the amount of biofuels a recipient produces from renewable biomass, other than corn kernel starch.

Examples of eligible feedstocks include but are not limited to: crop residue; animal, food and yard waste material; vegetable oil; and animal fat. Through this and other Programmes, USDA is working to support the research, investment and infrastructure necessary to build a biofuels industry that creates jobs and broadens the range of feedstocks used to produce renewable fuel.

For example, in Somerset, Ky., Somerset Hardwood Flooring will receive a $7,040 payment for producing wood pellets from residual sawdust from its hardwood flooring manufacturing process. The company produces about 40 tons of wood pellets annually.

FPE Renewables, LLC, based in Lyden, Wash., generates nearly two million kilowatt hours of electricity annually. The firm will receive a payment of $9,612 for producing biogas primarily from dairy waste, which is converted to electricity. In West Point, Va., Virginia Biodiesel Refinery, LLC, will receive a payment of $7,900 for making biodiesel from recycled cooking oil and soybean oil.

Increased biofuel production plays a relatively minor role in retail food price changes because the growing diversity of feedstock used to produce biodiesel allows for flexibility and helps relieve market pressures. Biodiesel is made from an increasingly diverse mix of non-food feedstocks, including recycled cooking oil, agricultural oils and animal fats, allowing most biodiesel producers to select from a choice of feedstocks if prices rise or supplies are limited.

Therefore, the industry's impact in commodity markets is significantly reduced. As the market expands for home-grown renewable energy, American farmers and producers will create even more good-paying jobs that can't be exported. The biofuels industry in the US currently employs about 400,000 people and is expected to employ around a million people in the US by 2022.