Usda Program Estimated To Boost Biodiesel Production

Diesel Fuel News, Feb 19, 2001 by Rachel Gantz

A U.S. Department of Agriculture "Commodity Credit Corporation" program could boost biodiesel production in the U.S. by up to 36 million gallons/year, if production plans actually unfold.

In total, the CCC program could be worth up to $300 million in subsidies to corn-ethanol and soybean-biodiesel producers.

The program makes cash payments this year and next year to companies that increase their purchases of corn, soybeans and other commodities to expand production of ethanol, biodiesel or other biofuels.

USDA has selected 79 "bioenergy" plants in 19 states to participate in the agency's 2001 program. The table (above) shows the number of biodiesel plants that have been selected for possible subsidies, as well as each plant's estimate for possible production increases.

The program will provide higher payments on a quarterly basis to small and new-to-market processors, including cooperatives, to encourage the expansion of domestic bioenergy production capacity. USDA will provide up to $150 million for the program this fiscal year and another $150 million in fiscal year 2002, but a yearly cap of 5%, or $7.5 million, will be placed on the funds any single producer may obtain.

                   Approved Biodiesel Agreement Holders
State               Number of  Increased Thousand
                     Plants   Gallons Eligible for
                                    Payment
Florida                 1            5,200
Illinois                2            4,053
Indiana                 1            4,000
Iowa                    2            8,400
Kentucky                1            1,400
Minnesota               1            10,000
Nebraska                1             200
Nevada                  1            1,400
North Carolina          1            1,400
Tennessee               1             400
BIODIESEL INCREASES                  36,453
Source: USDA