U.S. Bioenergy Subsidy Sign Up

WASHINGTON - Aug 4/04 - SNS -- The USDA will accept applications through the end of August for the fiscal 2005 Bioenergy Program, which aims to stimulate industrial consumption of agricultural commodities by promoting their use in bioenergy production.

In FY (fiscal year) 2003, ethanol producers expanded production by 607 million gallons, and biodiesel producers by 18.5 million gallons. And, for just the first two quarters of FY 2004, ethanol production increased 280.9 million gallons, while biodiesel production grew by 6.9 million gallons. Increased bioenergy production helps strengthen the income of soybean, corn and other producers and lessens U.S. dependence on traditional energy sources.

Under the program, USDA will make payments totaling up to $150 million to commercial bioenergy (ethanol and biodiesel) producers who increase their production from eligible commodities between October 1, 2004, and September 30, 2005. Payments will be based on bioenergy production increases from eligible commodities compared to the same time period a year earlier. Additionally, biodiesel producers are also potentially eligible for FY 2005 program payments for 15 percent of their base production of biodiesel that is not an increase over the prior FY to date.

To be eligible under the program, ethanol producers must produce and sell ethanol commercially and have authority from the Bureau of Alcohol, Tobacco, Firearms and Explosives to produce ethanol for fuel or sell denatured ethanol rendered unfit for beverage use. Biodiesel producers must produce and sell biodiesel commercially and be registered and in good standing with the Environmental Protection Agency. Biodiesel production must also meet the American Society for Testing and Materials Standard's biodiesel standard.

Eligible commodities are barley; corn; grain sorghum; oats; rice; wheat; soybeans; cotton seed; sunflower seed; canola; crambe; rapeseed; safflower; sesame seed; flaxseed; mustard seed; cellulosic crops, such as switchgrass and hybrid poplars; fats, oils, and greases (including recycled fats, oils and greases) derived from an agricultural product; and any animal byproduct (in addition to oils, fats and greases) that may be used to produce bioenergy, as the Commodity Credit Corporation determines, that is produced in the United States and its territories.

Any bioenergy producer who expects to have eligible production of commercial fuel grade ethanol or biodiesel between Oct. 1, 2004, and Sept. 30, 2005, and is not already enrolled in the program, must enroll during the August sign-up period to be eligible for program payments. For example, a bioenergy producer with a new plant that is expected to become operational in July 2005 must enroll that plant in the program by Aug. 31, 2004, to be eligible to receive program payments on that new production during FY 2005. Bioenergy producers who will begin production after Sept. 30, 2005, may wait until the next sign-up period to enroll. The Bioenergy Program is scheduled to end at the end of FY 2006.

Producers wishing to enroll in the program and interested in the program details should obtain a Bioenergy Program Agreement, Form CCC-850, (Agreement) and instructions for completing it from either the Kansas City Commodity Office, Contract Reconciliation Division, PO Box 419205, STOP 8758, Kansas City, MO 64141-6205.