On Friday, May 23, 2014, the U.S. Department of Agriculture (USDA) released its semi-annual regulatory agenda (Agenda) indicating its intended actions and priorities for the remainder of the year. A copy of USDA's Agenda is available online.
According to the Agenda, USDA intends to issue its final rule addressing how its BioPreferred® Program will designate complex products and intermediate materials and feedstocks in July 2014. USDA published its proposed rule on this matter in the Federal Register on May 1, 2012, and accepted public comment until July 2, 2012. A copy of the proposed rule is available online.
On May 20, 2014, the House Committee on Appropriations' Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (House Agriculture Appropriations Subcommittee) and the Senate Committee on Appropriations' Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (Senate Agriculture Appropriations Subcommittee) marked up and passed their separate versions of a Fiscal Year (FY) 2015 spending bill for USDA. A copy of the House Agriculture Appropriations Subcommittee's draft bill is available online. A copy of the Senate Agriculture Appropriations Subcommittee's "Mark-up Bill Summary" for its version of the FY 2015 USDA spending bill is available online.
The House Agriculture Appropriations Subcommittee's bill is controversial and includes steep cuts to Farm Bill Energy Title programs recently expanded and provided mandatory funding by the Agricultural Act of 2014 (the 2014 Farm Bill), including to the Biomass Crop Assistance Program and Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program. Mandatory funding is not usually subject to cuts through the annual appropriations process. The biofuels and renewable chemicals industries are working to ensure mandatory funding for these programs is included in the final FY 2015 USDA spending bill.
The Biobased and Renewable Products Advocacy Group (BRAG™) reported on the significance of the expanded Energy Title programs and mandatory funding for them provided under the 2014 Farm Bill. A copy of that report is available online.
On March 13, 2014, the U.S. Department of Agriculture (USDA) held a meeting to share information with stakeholders about the 2014 Farm Bill implementation process related to Energy and the Bioeconomy. A copy of the USDA press release is available online.
On March 14, 2014, USDA will hold a listening session on implementation of the Farm Bill's Biobased Markets, or BioPreferred Program. To register for the webinar, please visit online.
On March 4, 2014, President Obama released his fiscal year (FY) 2015 Budget request, which includes aggressive proposed funding to carry out the Administration's Climate Action Plan designed to reduce harmful greenhouse gas (GHG) emissions and the impacts of climate change. The President's FY 2015 Budget includes funding for several programs and initiatives to help facilitate the continued development and production of biofuels and biobased products. Consistent with the newly enacted Farm Bill, the Budget for the U.S. Department of Agriculture (USDA) includes increased funding for biobased product manufacturing. Given political realities and this midterm election year, it is not expected that the President's FY 2015 Budget Request will be enacted as proposed. It represents a starting point in the budget process, however, and indicates the Administration's priorities.
Here are highlights from the FY 2015 Budget proposal:
• U.S. Environmental Protection Agency (EPA): While the total budget request for EPA of $7.9 billion represents a decrease of $0.3 billion from last year, the cuts are mostly found within water infrastructure funds, with several programs seeing an increase over last year's levels. EPA's budget summary document notes that the Agency intends on evaluating its workforce and "identifying needed skills for a streamlined EPA." EPA's Appendix notes that under the "TSCA Confidential Business Information [CBI] Fund," the "Budget proposes to expand EPA's existing authority to collect fees to recover a portion of the costs of reviewing and maintaining the CBI."
• U.S. Department Of Energy (DOE): The FY 2015 Budget includes $27.9 billion for DOE, a 2.6 percent increase over FY 2014 enacted levels. This funding includes several programs designed to encourage and facilitate the development and production of advanced biofuels. For instance, the FY 2015 Budget would fund the DOE's:
o Bioenergy Technology Program At $253 Million: A $12 million decrease over FY 2014. This program funds research, development and demonstration (RD&D) projects to advance biofuels technologies and to validate and assist in the commercialization of integrated biorefinery technologies that will help transform the nation's transportation sector.
o Energy Security Trust At $2 Billion Over Ten Years: According to the DOE's FY 2015 Budget Appendix, this trust would be newly created to "support research into a range of technologies -- like advanced vehicles that run on electricity, homegrown biofuels, hydrogen, and domestically produced natural gas -- to allow the Nation to transition from oil towards more secure alternatives. The [t]rust will be funded from existing royalty revenues generated from [f]ederal oil and gas development. Establishing a guaranteed source of funding will allow the Department of Energy to maintain targeted and sustained investments that will directly advance U.S. energy security."
o Energy Efficiency And Renewable Energy At $2.3 Billion: An increase of approximately $0.2 billion over FY 2014. Under this program, DOE invests in the development of renewable generation technologies, sustainable transportation technologies, and advanced manufacturing technologies, as well as in improving energy efficiency in our homes, buildings and industries.
o Advanced Research Projects Agency At $325 Million: An increase of $76 million over FY 2014 levels. This program provides funding for research and development of transformational clean energy technologies.
• USDA: The FY 2015 Budget includes $23.7 billion in discretionary funding for USDA, a decrease of approximately $1 billion from FY 2014. The Budget provides for the USDA launch of three new multidisciplinary agricultural research institutes, one of which would be dedicated to advanced biobased manufacturing. It also includes the mandatory funding provided in the newly enacted Farm Bill for important energy programs designed to help encourage the production of biofuels and biobased chemicals. For instance, the FY 2015 USDA Budget Request provides funding for the:
o Biobased Markets Program At $3 Million In Mandatory Funding, the same level as FY 2014: The Biobased Markets (BioPreferred®) Program creates a procurement preference at federal agencies for biobased products.
o Biobased Research And Development Initiative At $3 Million In Mandatory Funding, a decrease of approximately $2 million from FY 2014: This program provides competitive funding for RD&D of technologies and processes leading to commercial production of biofuels and biobased products.
o Biomass Crop Assistance Program (BCAP) At $25 Million In Mandatory Funding: BCAP provides incentives to farmers, ranchers and forest landowners to establish, cultivate and harvest eligible biomass for heat, power, biobased products, research, and advanced biofuels. Crop producers and bioenergy facilities can team together to submit proposals to USDA for selection as a BCAP project area.
o Biorefinery, Renewable Chemical, And Biobased Manufacturing Assistance Program At $50 Million In Mandatory Funding, a decrease of $80 million from FY 2014: This program provides competitive loan guarantees and grants for the construction or retrofitting of demonstration-scale facilities for the commercial production of biofuels, renewable chemicals, and biobased products.
President Obama is expected to sign H.R. 2642, the Agriculture Act of 2014 (the new five-year Farm Bill), into law on Friday at Michigan State University in East Lansing, Michigan. He is scheduled to speak there about the importance of the legislation.
The Farm Bill is critically significant to the biofuels and renewable chemicals and products industries because the new Farm Bill continues and expands on the majority of the energy programs covered under the 2008 Farm Bill and provides $881 million in mandatory funding to carry them out. For instance, the new Farm Bill continues the Biobased Markets and Biorefinery Assistance programs, as well as the Biomass Crop Assistance Program, which helps encourage and facilitate the growth of purpose grown energy crops to be used for energy production. It modifies the existing Biorefinery Assistance Program to create the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program and extend funding eligibility to producers of renewable chemicals and biobased products. The mandatory funding under this program and expanded eligibility marks a big victory for the biofuels and renewable chemicals and products industries.
The U.S. House of Representatives approved H.R. 2642 by a bi-partisan vote of 251-166 on January 29, 2014. The Senate followed suit on February 4, 2014, by a bi-partisan vote of 68-32.
On Monday, the 41 member bicameral Farm Bill Conference Committee announced that it had reached agreement on a compromise Farm Bill, the Agriculture Act of 2014. A copy of the legislation is available online. The Conference Committee was led by House Agriculture Committee Chair Frank Lucas (R-OK), Ranking Member Collin Peterson (D-MN), Senate Agriculture, Nutrition and Forestry Committee Chair Debbie Stabenow (D-MI), and Ranking Member Thad Cochran (R-MS). A copy of the Senate Agriculture Committee press release on the compromise legislation is available online.
The bill includes $881 million in mandatory funding for renewable energy programs over the next ten years, and extends eligibility to renewable chemicals for the first time. It continues the majority of the energy programs covered under the 2008 Farm Bill, including the Biobased Markets and Biorefinery Assistance Programs, and the Biomass Crop Assistance Program to help encourage and facilitate the growth of purpose grown energy crops to be used for energy production. The legislation will modify the existing Biorefinery Assistance Program to create the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program that would expand funding eligibility to producers of renewable chemicals and biobased products. This mandatory funding and expanded eligibility marks a big victory for the biofuels and renewable chemicals and products industries.
The House of Representatives passed this compromise Farm Bill on Wednesday, January 29, 2014. The Senate is expected to take it up for consideration and potentially vote on it as early as the end of this week. The President is expected to sign it.
Just before adjourning for its winter recess, the U.S. House of Representatives approved on December 13, 2013, by voice vote an extension of the 2008 Farm Bill through January 31, 2014. The vote is considered symbolic because Senate Majority Leader Harry Reid (D-NV) has asserted that the Senate will not consider an extension. Senator Debbie Stabenow (D-MI) and Representative Colin Peterson (D-MN), two of the principals leading Farm Bill negotiations, have reportedly stated that an extension is unnecessary since they expect to prepare in final a framework for the next Farm Bill to be passed by Congress before the end of January. Although the U.S. Department of Agriculture will be required, absent a new Farm Bill, to set up a supply-side management program after December 31, 2013, it is expected that Congress will pass a new five-year Farm Bill by the end of January 2014, when such a program would effectively be up and running.
Representative Frank Lucas (R-OK), Chair of the U.S. House Committee on Agriculture, filed a bill this week to extend for one month, the 2008 Farm Bill to pave way for the completion of the five-year reauthorization bill when Congress returns from its winter break in January. The House of Representatives is scheduled to recess this Friday, on December 13, 2013, while the U.S. Senate is not scheduled to recess until next Friday, December 20, 2013.
Members of the Farm Bill Conference Committee, led by the leaders of the House and Senate Agriculture Committees (the four principals), have been working to merge the House and Senate passed versions of the legislation and settle on a final bill for enactment by the end of the year. Key sticking points remain on the level of cuts to the food stamp program and the implementation of farm subsidies. In addition, representatives of the biofuels and renewable chemical industries are also advocating strongly that the final bill should include the Senate version of the energy title, which would provide $900 million in mandatory funding for Farm Bill energy programs, and extend eligibility to renewable chemical producers.
If Congress fails to pass either an extension of the 2008 Farm Bill or a new five-year Farm Bill by January, an antiquated supply-side 1949 law will kick in, driving up milk prices among other things. That law includes no support for renewable energy programs. Senate Majority Leader Harry Reid (D-NV) and Senator Debbie Stabenow (D-MI), Chair of the U.S. Senate Committee on Agriculture, have both publicly denounced any short term extension and any plans of the House of Representatives to recess for the year before completing the next Farm Bill. Reportedly, Majority Leader Reid has stated that he will not bring any short term extension up for a vote. The staffs of the four principals were meeting on Thursday, December 12, 2013, to complete as much of the framework for the next Farm Bill as possible to reduce the need for a short term extension and increase the likelihood a final bill could pass shortly after Congress returns to work after the first week of January.
On December 11, 2013, the U.S. Departments of Agriculture (USDA) and Navy announced that as part of their joint "Farm-to-Fleet" initiative, the acquisition of biofuel blends will be included into regular Department of Defense domestic solicitations for jet engine and marine diesel fuels. The Navy will seek to purchase JP-5 and F-76 advanced drop-in biofuels blended from 10 to 50 percent with conventional fuels. Funds from USDA's Commodity Credit Corporation will assist the effort.
The Navy and USDA plan to hold an "Industry Day" to explain the effort on January 30, 2014. A copy of the USDA press release on the announcement is available online.
In 2011, DOE, USDA, and the Navy announced a joint $510 million effort to help promote the commercialization of domestic advanced drop-in biofuels for military and commercial use. The Navy and DOE have been challenged with securing their portion of the funding through the appropriations process. Several in Congress have criticized the cost of the biofuels compared to traditional sources of energy. Under the initiative announced this week, the Navy will expect that drop-in biofuels will be available for less than $4 per gallon by 2016, making them competitive with traditional sources of fuel.
On November 25, 2013, the U.S. Department of Agriculture (USDA) published a notice inviting applications for nearly $10.5 million in USDA value-added producer grants (VAPG), which help agricultural producers enter into value-added activities related to the processing and/or marketing of biobased value-added products. A copy of the USDA press release on the announcement is available online, and a copy of the Federal Register notice is available online. The funding notice encourages "applications from eligible entities supporting value-added activities related to bio-based products…Bio-based products are defined as commercial or industrial products composed of biological products or renewable domestic agricultural materials or forestry materials, including construction materials, fibers, papers, compost, fertilizer, lubricants, plastics and paint (see online for more information)." Applications are due by February 24, 2014.