Uncategorized

A Summary of Key Changes in the Farm Bill’s Energy Title

(February 11, 2014) President Barack Obama last week signed a Farm Bill after a long grueling process to renew the bill, after the last one ended in 2012. This is the third Farm Bill to include an Energy Title since the first one was established in 2002. The Environmental Law & Policy Center (ELPC) will provide more in-depth resources in coming days but here is a quick overview of key programs.

Farm Bill Energy Title Funding

The mandatory funds authorized in the bill for all Energy Title programs over five years total $694 million (Congressional Budget Office estimated the Energy Title outlays to be to be $880 million over ten years). Compared to the four-year Farm Bill passed in 2008 with overall 2008 funding authority of $1 billion, this is a substantial reduction of 47% on an annual basis based. At the same time, a number of programs were discontinued so core programs can still remain effective.

ELPC has provided a quick guide to overall funding by program here.

Rural Energy for America Program

The Rural Energy for America Program (REAP) continues to be the cornerstone program of the Energy Title. REAP provides grants and loan guarantee incentives to agricultural producers and rural small businesses for adoption of a broad range of renewable energy and energy efficiency technologies.

Changes to REAP include repeal of support for feasibility studies, a simplified application process for smaller and medium-sized projects, and prohibition of funding ethanol blender pumps (or other retail energy dispensing) under REAP. REAP is the highest funded program under the bill, receiving $50 million per year in mandatory funding.

Biomass Crop Assistance Program

BCAP is designed as a catalyst to jump-start production of sustainable, non-food crops for energy that also provide other benefits for soil conservation and water quality.  The BCAP program was modified the most of any Energy Title program in thei Farm Bill.

BCAP will receive mandatory funding of $25 million each year over the next five years. Following are some key changes:

  • Eligible materials must be harvested consistent with a conservation or forest stewardship plan, and that these plans be included in the contract.
  • Clarifies that commodity crops that receive subsidies are not eligible materials.
  • Reduces cost-sharing for establishment payments from 75% to 50% (or $500 per acre, $750/acre for socially disadvantaged farmers). Conservation reserve program or agricultural conservation easement program lands are explicitly excluded.
  • Maintains the matching payments (CHST) program, with the payment limit reduced from $45 per ton over two years to $20 per dry ton over four years.
  • Require that 10-50% of mandatory funding be used for matching payments (CHST).

Repowering Assistance Program

Repowering Assistance provides incentives for biofuel producers to replace fossil fuel-powered systems with biomass systems. This program was renewed after the EPA determined that sorghum ethanol produced via dry mill plant with a combined heat and system fueled by anaerobic digesters have lifecycle greenhouse gas emission reductions of over 50 percent, qualifying as an “advanced biofuel” under the Renewable Fuel Standard.

Programs Repealed

The bill repealed the Forest Biomass for Energy program as well as the Biofuels Infrastructure Study and Renewable Fertilizer Study. Neither study was completed since authorized in 2008.