USDA makes changes to its Section 9003 Biorefinery Assistance Loan Guarantee Program

The Rural Business Cooperative Service of the US Department of Agriculture (USDA) has issued an interim final rule making changes to the USDA's Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program.

Formerly referred to as the Biorefinery Assistance Program, the programme provides loan guarantees of up to $250 million (€228 million) of senior debt for the development, construction, and retrofitting of new and emerging technologies for the development of advanced biofuels, renewable chemicals and bio-based products. The interim final rule expands the scope of projects eligible for loan guarantees and also implements significant changes intended to make the programme friendlier to large institutional lenders and project-finance-oriented loan and collateral structures.

The programme was initially established under the Food, Conservation, and Energy Act of 2008, P.L. 110–234 (2008 Farm Act), and provided loan guarantees only for commercial-scale biorefineries using certain technologies and targeting the production of advanced biofuels. USDA has removed grants, which were authorised in 2008 Farm Bill, from the programme. Reauthorisation of the 2014 Farm Act permitted changes to Section 9003 of the Agricultural Act of 2014, P.L. 113-79, 7 U.S.C. 8103 (2014 Farm Act), renewed funding for the programme, expanded it to cover renewable chemical and bio-based products manufacturing facilities, and made certain other changes.

The interim final rule implements the changes required by the 2014 Farm Act and also addresses public comments received in a rulemaking under the prior interim final rule implementing the provisions of the 2008 Farm Act. 76 Fed. Reg. 8404 (Feb. 14, 2011). The interim final rule also includes a finance framework and administrative improvements based on the USDA's experience with the programme.

To date, the programme has obligated funds for three loan guarantees and six conditional commitments. According to USDA, these funding obligations will result in approximately 100 million gallons per year of advanced biofuels from approximately $750 million of programme funding.