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Vilsack says USDA and White House close to deal on biofuel aid

Agriculture Secretary Tom Vilsack said the administration appeared “very close” to releasing a long-promised $700 million in pandemic aid to biofuel producers. The aid was announced in March as part of a remodeling of coronavirus relief programs by the incoming administration.

“I think we are very close to getting that done,” Vilsack said during a teleconference on Friday. “Sometimes it is frustrating to negotiate with our friends at OMB but that is the process.”

Ethanol production plunged 12% during 2020, mirroring the plunge in gasoline consumption due to stay-at-home orders and the economic recession that accompanied the pandemic. Ethanol makers lost $3.8 billion in sales, estimated the trade group Renewable Fuels Association at the end of 2020, which called repeatedly for federal aid. As much as 40% of the U.S. corn crop is used in making the renewable fuel and co-products.

The ethanol industry and its allies in Congress have pressed the EPA to announce targets for biofuel use this year and for 2022. Ordinarily, the Renewable Fuel Standard for each year is finalized by Nov. 30 of the preceding year. The Trump administration left office without setting an ethanol mandate for 2020. Vilsack said he expected an announcement “in the very near future.”

Vilsack discussed aid to the biofuel industry while announcing $633 million in USDA loans and grants through five rural economic programs aimed a renewable energy and community facilities on Friday.

More than half of the money, $356 million, went to projects proposed through the Rural Energy for America Program (REAP), which helps farmers and small businesses install renewable energy systems or to improve their energy efficiency. Vilsack visited a family-owned grocery store in Shrewsbury, a small town in southeastern Pennsylvania, that will use a $103,413 REAP grant to install solar panels that are expected to reduce the store’s electricity bills by $30,852 a year.

“The announcements are both large and small,” said Vilsack. Dozens of small grants, such as $40,910 to Ohana Banana Farm in Hilo, Hawaii, were mixed with large loans; $150 million of the REAP disbursements went to six projects, who each got a $25 million loan.

Beside REAP, the USDA loaned $241.8 million to nine solar projects through its Electric Loans for Renewable Energy; issued $3.2 million in grants for eight projects through the Higher Blends Infrastructure Incentive Program, which shares the cost of installing pumps and storage tanks for biofuels; and grants of $195,000 to six projects through its Community Facilities Disaster Grant program.

To read the 52-page list of grants and loans, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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