Sen. John Thune, R-S.D., introduced legislation Wednesday aimed at helping farmers near biorefineries begin growing dedicated energy crops. Similar legislation has also been introduced in the House.
The bill would offer farmers incentives to grow crops, such as switchgrass and fast-growing trees, for use as cellulosic ethanol feedstocks. Thune hopes the legislation will be included in the 2007 Farm Bill energy title.
"For cellulosic to achieve its potential, Congress needs to help this industry overcome some of the initial market barrier," Thune said in a conference call Wednesday.
The bill would fund several USDA feasibility studies - probably 10 to 12, costing about $50,000 each, partly to determine the level of interest and likelihood of success for biorefinery constructions. The bill would authorize a cost share and per-acre rental payment for farmers during a contract's first five years, in order to help the biorefinery get established and build a market.
After a project is approved, farmers could enroll eligible land in the program and begin growing dedicated energy crops. During the first five years of the contract, farmers would a cost-share and per-acre rental payment which would continue until the biorefinery began operation. The farmer would get matching payments of up to $45 for each ton of biomass delivered to the refinery for up to two years
Farmers anywhere in the country selling byproducts and residues, such as wheat straw and corn stover, to ethanol plants would also be eligible for matching payment of up to $45 per ton.
Bill co-sponsor Sen. Ben Nelson, D-Neb., says the bill's real value is in giving cellulosic ethanol a jump-start. "It's difficult to start commercial production without a guaranteed supply of biomass, but it's hard to encourage farmers to grow the biomass unless they know they'll have a market."