All in on Biofuels – At Least Corn Ethanol

Rolling Analysis, FY21 BudgetAll in on Biofuels – At Least Corn Ethanol

Energy & Natural Resources,  | Analysis
Feb 11, 2020  | 3 min read | Print Article

This year’s presidential budget request goes all in on biofuels funding. The administration is prioritizing spending on biofuels, even though the majority of subsidies will benefit corn ethanol, a well-established industry Congress has expressly excluded from the Farm Bill’s marque renewable energy program.

The Trump Administration’s Fiscal Year (FY) 2021 budget requests $100 million in discretionary appropriations for the US Department of Agriculture’s (USDA) Higher Blends Infrastructure Incentive Program (HBIIP). This is an attempt to get Congress’s seal of approval on a program USDA Secretary Sonny Perdue created for FY2020 by using the same authority the administration is using to make payments to farm businesses affected by the trade war. The FY2020 program was the subject of a USDA request for information just last month, so final details have not been released. The program seeks to funnel millions of dollars to the biofuels (corn ethanol) industry, targeting retail infrastructure such as storage tanks and blender pumps at gas stations. This is simply the most recent incarnation of a program then Secretary of Agriculture Tom Vilsack created in 2015. His use of taxpayer funds to install high-blend ethanol pumps, after Congress explicitly said no to blender pumps in the 2014 farm bill, earned him a Golden Fleece Award.

The administration’s budget request also includes funding for the USDA’s Bioenergy Program for Advanced Biofuels (BPAB). Established by executive order in 1999, it was originally intended to support increased production of advanced biofuels derived from sources like waste materials, sugarcane, or woody biomass. Instead, the program, which Congress subsequently incorporated into the farm bill, has poured millions of dollars into the established corn ethanol industry. Over $275 million in taxpayer dollars were appropriated from 2009 to 2016 through BPAB.

Another federal biofuel program receiving funding in this year’s budget request is the Repowering Assistance Program. Administered by the USDA the Repowering Assistance Program reimburses biorefineries for using biomass sources like wood chips as a heat and power source instead of fossil fuels. The program was created in 2002, but scrapped in 2012 due to lack of interest, only to be reinstated in the 2014 and 2018 farm bills. The majority of the program’s funding has gone to corn ethanol producers.

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