Prioritizing the Bioeconomy: Observations on USDA’s 9003 Loan Guarantee Program
by Osaretin Omorodion* (Advanced Biofuels USA) Biobased products are a new innovation that are gradually contributing more to the U.S. economy in the forms of alternative fuels, packaging, plastic substitutes and more. An Economic Impact Analysis report was recently submitted to the U.S. Congress from the Director of Sustainability and Commerce from Duke University and other individuals. It was assessed that biobased products contribute $350 million to the economy as well as four million jobs.
Experts in a recent webinar organized by Westar Trade Resources discussed the developing bioeconomy and focused on improvements for a federal loan guarantee application and underwriting process, designed to facilitate investment. Here are their observations.
Creating higher priorities towards bio-based products is an intelligent strategy and will help to address critical issues in waste management, greenhouse gas emissions cuts, and the need to wean off of petroleum’s monopoly. Policymakers are realizing the value of diversifying the sources on which our products and energy are based.
The Farm Security and Rural Investment Act of 2002 encouraged federal agencies to commit to buyer prioritized programs for biobased products and to purchase these products if they are reasonably available and proved to be of good product standard.
In addition to making buyers cognizant of the benefits of buying biobased alternatives, the U.S. Department of Agriculture is now giving additional support to rural economies which are at the foundation of the bioeconomy. Section 9003 of USDA’s Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program makes available loan guarantees of up to $250 million to assist with the development of biorefineries and biobased product manufacturing facilities. To be eligible for the loan guarantees, the refineries must produce advanced biofuels and may use biofuels in the processes of generating electricity.
In addition, there are financial assistance programs offered from the government that aid farmers interested in biomass projects, such as anaerobic digesters, biodiesel, ethanol, etc.
The USDA also strives to help farmers support their entrepreneurship and expand into different markets in regional food systems.
Such incentives are essential to encourage rural communities to continue with their trade instead of diminish under economic hardship. Often agriculture and rural communities that support this industry are overlooked and underemphasized. It’s important that rural cultures are encouraged to thrive because their agricultural and manufacturing industries sustain our population’s fundamental needs of food and nutrition.
In an era of environmental conscientiousness, the rural lands of our country are an ideal place to host the biotechnology facilities needed to wean ourselves off of the detrimental petroleum monopoly. Therefore, it’s critical that we keep our farmers and our rural communities encouraged. Investing in biorefineries and manufacturing facilities will add jobs and improve the economy of rural America and help farmers match the consumer demands in urban and suburban areas and, additionally, will help to diversify our national economy.
The USDA’s 9003 loan assistance program works as an incentive because it addresses the issues of biotechnology investment, rural employment, and sustainable products. This program facilitates all of these crucial elements to work synonymously and ultimately create a mechanism that allows job opportunities to continue to flow into rural communities and thus support the operational needs of green technologies that will help us achieve our national objective of addressing greenhouse emissions and the threat of climate change.
* Osaretin Omorodion brings her degree and interest in biology and environmental science to serve as an occasional correspondent for Advanced Biofuels USA.