Farm bill offers big boost for biomass ethanol

As gas and other oil-based energy costs rise, so do the calls for domestically produced bio-based products. And, in case you missed it, a new farm bill that passed both chambers of the Congress boosts congressional funding for bioenergy programs through 2012.

The new bill includes incentives for a new generation of cellulosic ethanol derived from biomass sources such as wood chips, crop residues and other sources of cellulose that comprises plants.

The bill calls for a $1.01 tax credit for biomass-derived ethanol, supported by a reduction in the existing tax credit for corn-based ethanol. The bill also would appropriate money to loan to biomass refineries as well as a new $45-a-ton subsidy for farmers who agree to collect biomass for ethanol production.

The bill also would set aside $118 million for biomass research. To allay concerns among investors, the legislation also would extend a 54-cent-per-gallon tariff on imported ethanol through 2010 — a measure designed to protect the American industry from Brazil’s burgeoning sugar cane-derived ethanol industry.

Though vetoed by President Bush on the basis that it was wasteful and contained none of his desired reforms, the new farm bill nonetheless was passed again by both the House and Senate.

Despite a “clerical error” that left out the Trade Title of the new bill, 14 titles of the bill, including the bioenergy incentives, were passed, though cellulosic bio-energy provisions associated with the bill did not come in for serious criticism by the Bush administration, says James Novak, an Alabama Cooperative Extension System economist and Auburn University professor of agricultural economics.

Federal legislators aren’t the only ones expressing support for stronger biomass ethanol incentives. In a May 11 editorial, the New York Times called on Congress to rethink ethanol standards, placing more emphasis on biomass-derived ethanol, less on corn-based ethanol. As a first step, the Times urged Congress to reorder its subsidy structure to promote “good” forms of biofuels, particularly biomass ethanol.

“The goal is not just to stop the headlong rush to corn ethanol but to use the system to bring to commercial scale promising second-generation biofuels — cellulosic ethanol derived from crop wastes, wood wastes, perennial grasses,” the Times states.