USDA Announces Major Changes to REAP Public Comment DEADLiNE November 2, 2026

by Erin Krueger (Ethanol Producer Magazine) The USDA on Sept. 30 published a final rule that fundamentally changes the structure and administration of the agency’s Rural Energy for America Program. REAP will now require projects to be fully built and operational before an application can even be filed.

REAP provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Renewable biomass, including anaerobic digesters and biogas, wind, solar, small hydro-electric, ocean, geothermal, or hydrogen derived from any of those sources are among the renewable energy sources eligible for the program.

Precursors to the REAP program were initially established in 2002 and later consolidated into REAP by the 2008 Farm Bill. The program was reauthorized and updated by the 2014 and 2018 Farm Bills.

The National Sustainable Agriculture Coalition estimates that REAP invested more than $4.8 billion in more than 19,000 grant and loan guarantees between 2014 and 2025, spurring more than $14.7 billion of rural development invested in rural communities. Numerous biogas and biomass combined-heat-and-power (CHP) projects have been supported by REAP funding over the years, along with many projects that improved operations at ethanol plants, biodiesel facilities and wood pellet mills.

The USDA March 2026 announced it would halt processing of REAP grant applications until the agency updates the program regulations to comply with Executive Order 14315, titled “Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Source.”

Executive order 14315, signed by President Donald Trump on July 7, 2025, in part aims to limit federal support for certain types of renewable energy, including wind and solar. “For too long, the Federal Government has forced American taxpayers to subsidize expensive and unreliable energy sources like wind and solar,” Trump wrote in the executive order. “The proliferation of these projects displaces affordable, reliable, dispatchable domestic energy sources, compromises our electric grid, and denigrates the beauty of our Nation’s natural landscape. Moreover, reliance on so-called ‘green’ subsidies threatens national security by making the United States dependent on supply chains controlled by foreign adversaries. Ending the massive cost of taxpayer handouts to unreliable energy sources is vital to energy dominance, national security, economic growth, and the fiscal health of the Nation.”

Soon after, in April 2026, the USDA rescinded a notice of funding opportunity (NOFO) issued in October 2024 that set deadline applications for fiscal year (FY) 2025, 2026 and 2027 REAP funding, noting that any applicant without a fully executed financial assistance agreement would have to reapply to the program.

In a separate, but related action, the USDA in January 2026 implemented a 90-day pause on loan guarantee funding for biodigester projects across USDA Rural Business Cooperative Service programs, which includes REAP. In the announcement, the USDA cited the need to perform a comprehensive review of the existing portfolio of biodigester projects, including an assessment of delinquency rates, project performance, operational sustainability and underwriting guidelines. The administrative pause was later extended through the end of 2026.

The USDA is set to formally publish a final rule in the Federal Register on Oct. 1 implementing changes to the REAP program. The agency said the changes “will simplify and streamline requirements and processes” for REAP.

“Under the new REAP structure, projects must already be fully built and operational before the applicant ever applies,” the USDA wrote in the final rule. “Applicants then apply, submitting actual energy production or savings data for the prior 12 months, alongside 12 months of pre-installation data. The agency evaluates applications for completeness, eligibility, risk, and merit and will award grants subject to the availability of funds and criteria provided in an annual notice. This new approach changes the program to a post completion, performance validated model. All RES and EEI awards will now be based on actual documented output, energy savings, costs, and system performance. Bottlenecks leading to application processing backlogs such as the technical merit review clearance process have been removed from the agency’s purview. Multilocation projects and specific application of certain technologies are now ineligible, and the program proposes to eliminate state level competitions in favor of a single national scoring and selection process. The result is a streamlined but significantly different process intended to reduce risk to the program, simplify administration, and prioritize projects delivering verifiable results. The result of these changes, combined with the release of a planned online application portal, will significantly decrease burden for applicants by shortening application length and review times across the program.”

The new regulations specify that flexible fuel pumps are not eligible for the REAP program. Other ineligible projects include 1) projects that include only moving renewable energy from one point to another, for example biogas pipelines; 2) retrofitting of an existing renewable energy system to add an energy storage system; 3) standalone energy storage system projects.

The final rule indicates that biogas projects now eligible for the program include those that produce biogas for conversion to electricity or heat; production of biogas to pipeline quality renewable natural gas (RNG); production of biogas to compressed natural gas used a non-retail transportation or other fuel; or an upstream system that distributes existing biogas to its initial point of sale.

A 15-day public comment period is set to open following publication of the final rule in the Federal Register on Oct. 1. A full copy of the final rule is available on the Federal Register website. READ MORE