Publication

June 25, 2008Client Alert

Congress Overrides Presidential Veto of 2008 Farm Bill – Providing Substantial Increases in Renewable Energy Research, Development and Production Funding

On June 18, 2008, Congress passed The Food, Conservation, and Energy Act of 2008 (also known as the "Farm Bill"), overriding President Bush's earlier veto of the legislation for the second time. The Farm Bill is a $288 billion, five-year agricultural omnibus bill that acts as a continuation of the 2002 Farm Bill. Of particular importance to the renewable energy industry are the changes and additions to the Energy Title (Title IX).

The Farm Bill expands and extends the provisions of the Energy Title of the 2002 Farm Bill, and provides additional funding. The total mandatory funding for the new Energy Title is $1.12 billion, with several of the programs also receiving discretionary funding. The key renewable energy provisions include the following:

  • The Biobased Markets Program: This program, designed to encourage the Federal government to preferentially purchase biobased products, was provided $1 million in mandatory funding for 2008 and another $8 million over the next four years, plus $8 million in discretionary funding. This funding will be used so that the Federal government may establish procurement preference and labeling guidelines.
  • The Biodiesel Fuel Education Program: This program, $4 million in mandatory funding over the next four years, is designed to help educate governmental and private entities and the public about the benefits of biodiesel use.
  • The Rural Energy for America Program: This program provides grants and loan guarantees to agricultural producers and rural small businesses for energy audits, technical assistance, energy efficiency improvements, and the purchase of renewable energy systems. The program has been provided with $255 million in mandatory funding over the next four years, of which $10.2 million must be used to provide grants for energy audits and technical assistance. The program has also authorized to receive an additional $100 million in discretionary funding over a four year period.
  • The Biomass Research and Development Program: This program provides grants, contracts, and financial assistance for research and development of biofuels and biobased products and technologies needed to produce them. The program will receive $118 million in mandatory funding and an additional $140 million in discretionary funding over the next four years.
  • The Biomass Crop Assistance Program: This program creates project areas in locations where there are a biorefineries in close proximity with potential biomass producers. The program provides these producers with financial assistance to help them establish and plant biomass crops and to help them cover the costs of harvest, storage, and transportation. The program has received uncapped mandatory funding and is one of only two programs under the Energy Title to receive funding for 2008 (the other is the "Biobased Markets Program").
  • The Biorefinery Assistance Program: This program provides grants and loan guarantees to biorefineries to encourage them to begin producing advanced biofuels. The program will receive $320 million in mandatory funding for 2009 and 2010 and an additional $150 million in discretionary funding over the next four years.
  • The Bioenergy Program for Advanced Fuels: This program provides direct funding to existing biofuel producers who produce advanced biofuels. The program has received $300 million in mandatory funding and an additional $100 in discretionary funding over the next four years.
  • The Repowering Assistance Program: This program allows the USDA to make direct payments to biorefineries for the replacement of fossil fuel boilers. The program will receive $35 million in mandatory funding over the next four years, plus and additional $60 million in discretionary funding.


There are several other provisions set up under the energy title which are authorized to receive solely discretionary funding. These include the "Rural Energy Self-Sufficiency Initiative," the "Forest Biomass for Energy" provision, and the "Community Wood Energy Program." The USDA has also been directed to conduct certain studies under the bill related to renewable energy production, including the "Renewable Fertilizer Study," the "Biofuels Infrastructure Study," and a general "Comprehensive Study of Biofuels." Other important energy related provisions found outside of the Energy Title include the tax "Credit of Production of Cellulosic Biofuel," the "Sun Grant Program," and two amendments to the Rural Electrification Act of 1936. There has also been a permanent "Renewable Energy Committee" established under the Research Title.

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