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The Biofuels Innovation Program Act

Sen. John Thune (R-SD) and Senator Ben Nelson (D-NE) have introduced legislation aimed at supporting farmers in order to produce biofuels. The Biofuels Innovation Program Act (BIP) would encourage farmers to produce crops for use as cellulosic ethanol feedstocks. Similar legislation has also been introduced in the House.

First, a set of feasability studies has to be created to determine the elligible areas for biorefineries: the local potential for growing biomass such as fast-growing trees or switchgrass, the potential producers and the economic impact of the biorefinery.

Once this proposal is approved by the USDA, producers would receive a cost share for planting energy-dedicated crops and a per-acre rental payment. When the biorefinery is operational, the rental payment would end and the producer would receive a matching payment up to $45 for each ton of biomass delivered to the biorefinery for up to two years.

[Source: Sen. Thune's website via Domestic Fuel]

This legislation also authorizes matching payments on a per-ton basis to producers anywhere in the United States who sell crop by-products and residues such as corn stover and straw to biofuels facilities for the production of ethanol or other alternative energy. These matching payments may be made for up to two years beginning with the date the biofuels facility begins purchasing the feedstock, and are also capped at $45 per ton.
Of course, this legislation relays on the development of cellulosic ethanol. As Sen. Thumeaffirms "[...] we have to be serious about giving the necessary jumpstart to America's budding alternative fuels industry and the farmers who will be expected to fuel it, so they can overcome initial economic and technical hurdles and transform this infant industry into the future answer to America's energy needs."

A very interesting fact is that the press release contains information about the maximum production of corn-based ethanol, limited to approximately 15 billion gallons of ethanol each year.

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