Opinion: Using existing USDA programs to build a climate-smart agricultural economy | 2021-03-31
The USDA seeks ideas to promote climate smart practices that create equitable economic opportunities in the agricultural sector. Making the most of existing USDA programs and strengthening markets for renewable energy, renewable chemicals and bioproducts is a winning strategy. Congressional leaders can work with the USDA to move forward today through simple improvements to existing programs.
The Renewable Energy for America (REAP) program is a great place to start. Congress should provide the popular REAP program with an injection of funds to meet demand; the program has been oversubscribed year after year. USDA could, with help from Congress, increase the cost-sharing share of its grants to 50 percent. Perhaps more importantly, the Department can ensure that a significant portion of the grants – at least 15 percent – goes into a “reserve fund” for underserved renewable technologies, such as distributed wind power and wind power. biogas energy.
The REAP loan program has been very successful in accelerating the adoption of renewable energy in rural America. However, the vast majority of loan guarantee funding has been directed to larger solar projects. Small businesses, or non-solar technologies, have not had the same access to REAP, as lenders avoid the perceived risks of these types of projects. Increasing the loan guarantee percentage for small loans (less than $ 1 million) can help small rural businesses access the program and deploy renewable energy projects.
Congress can also provide more funding for the USDA Business and Industry Loan Program, which is a key part of the USDA renewable energy portfolio. For example, B&I is the only program that will fund stand-alone storage. Currently, the amounts requested for outstanding loan guarantees exceed the loan balance by $ 94 million. Due to its popularity, the program could run out of funding before the middle of this year, blocking access to credit for rural businesses at a crucial time to ‘build back better’.
At the same time, the USDA could use its existing credit authority to support innovation in low-carbon renewable energy. The agency should consider using funds from the Commodity Credit Corporation to complement existing programs such as REAP and “Biopreferred” and further support renewable energy infrastructure, possibly even supporting new initiatives. Using a small portion of the $ 30 billion fund to support new markets and agricultural products would fit the purpose of the company and complement the new ‘carbon bank’ which Secretary Vilsack and Senator Debbie Stabenow (D-MI) have spoken.
The USDA should also make sustainable aviation fuels (SAF) a priority. Low-carbon aviation fuels will be key to mitigating climate change in one of the most difficult sectors to decarbonize. Aviation accounts for 2.5% of global carbon emissions and this figure is expected to increase in the coming years. Sustainable biofuels are badly needed in the aviation industry for the foreseeable future.
USDA, with help from Congress, could revitalize existing tools – such as biorefinery assistance, the renewable chemicals and bio-based manufacturing program – to better support sustainable biofuels as well as new producers. of SAFs who invest in marketing. USDA could extend program eligibility to all low-carbon crops and set objective parameters, with timelines, for loan approval.
Another way to support SAF would be for USDA to consider restarting and enhancing the old “Farm to Fly” initiative, as an opportunity to collaborate with the private sector and other federal agencies. Prioritizing renewable jet fuel from biomass is an important short-term opportunity to reduce greenhouse gas emissions while encouraging new markets for our farmers and promoting sustainable agriculture.
The USDA is also expected to create additional opportunities to use wood that risks contributing to catastrophic forest fires. Biomass power plants consume many tons of fiber that cannot be used otherwise. These facilities should be encouraged to use low-value fibers to promote overall forest health and reduce emissions. Support should be limited to biomass power generation facilities that meet the high sustainability requirements set by the US Forest Service.
The USDA has many programs that have supported the agricultural sector for years in the development of new energy markets. These programs are already informed about the climate; now they can be climate driven. USDA can expand and improve these programs to meet the goals of encouraging climate-smart agriculture and opening up new rural economic opportunities. And Congress can prioritize the funding needed to make the most of the opportunity at hand.
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Lloyd Ritter, Esq., Green Capitol LLC, and Director of the Ag Energy Coalition
The Agriculture Energy Coalition (AgEC) represents a diverse set of interests in agriculture and renewable energy, such as farmers, advanced biofuels and biobased manufacturers, cleantech companies, rural lenders and NGOs. environmental.