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USDA Awards Over $400m to Biofuel Projects

The U.S. Department of Agriculture (USDA) yesterday announced over $400 million in grants and loan guarantees for bio-energy initiatives, spread across five major projects and many smaller ones.

The biggest news was the USDA’s announcement of $405 million in loan guarantees for cellulosic ethanol plants, under its Biorefinery Assistance Program.

Coskata Inc. is set to receive a $250 million USDA loan guarantee to construct and operate a biorefinery facility in rural western Alabama. The project will use woody biomass to produce 55 million gallons of ethanol per year.

Enerkem Corporation will receive an $80 million loan guarantee to build and operate a biorefinery in Pontotoc, Miss. The plant will be capable of producing 10 million gallons of ethanol per year, using 100,000 metric tons of dried municipal solid waste. The guarantee follows a DOE award of up to $50 million announced in late 2009.

INEOS New Planet BioEnergy in Vero Beach, Fla., will receive a $75 million loan guarantee to build and operate a biorefinery capable of producing 8 million gallons of cellulosic ethanol per year from agricultural vegetative waste, yard cuttings, wood and municipal solid waste. The plant will also have an electricity capacity of 6 MW.

The USDA also announced payments to biofuel producers in 33 states under its Advanced Biofuels Payment Program and $1.6 million in grants for 68 feasibility studies under its Rural Energy for America Program.

Under one such grant, the Cayuga County Public Utility Service Agency in New York receives $40,000 to study a proposal to connect 20 farms to a biogas collector pipeline, so heat and power can be generated for sale to business customers.

Another grant sees the Texas Select Milk Producers of Hale County, Texas receive $17,500 to study a proposed anaerobic digester project, as part of a USDA effort to increase the use of anaerobic digesters on dairy farms.

The USDA said more opportunities for development of advanced biofuels projects will come up soon, when the department issues new rules for the Biorefinery Assistance Program, Repowering Assistance Program and Bioenergy Program for Advanced Biofuels Payments.

Yesterday the Department of Energy also made a loan guarantee to a biofuel project, pledging $241 million to a project to create renewable diesel from animal fats.

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