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USDA Makes Rule Changes to Bio-Based Products Loan Program

David P. Smoot

Legislative news out of Washington, DC earlier this month may boost interest and investment opportunities in biomass fuels and their representative companies. 

The U.S. Department of Agriculture (USDA) published final rules for Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (9003 Program). These rules now allow potential investors to submit applications to develop renewable chemical and biobased products without having to produce some amount of an advanced biofuel. The rule also expands the array of eligible companies to include innovative industrial biotechnology companies that have not yet produced biofuel.

The new rule changes will require a borrower to provide evidence to the lender and USDA of 120 days of continuous, steady-state production from the demonstration facility prior to the issuance of a conditional commitment, which will decrease the time between the issuance of a conditional commitment and loan closing and lessen the credit risk to the government. The USDA believes the change will decrease the time between the issuance of a conditional commitment and loan closing lessen the credit risk to the government.

For years, Northwest Advanced Bio-Fuels has been developing the framework for massive production of biofuel for use in airline fuel and other outlets. We are excited for this development and will keep focused on government law-making to bring energy into emerging biofuels businesses. 

The benefits to the environment are possible with the government focused on lower carbon footprints from jets, trucks and barges using Renewable Biofuels. This alone can and will make a huge contribution to lowering current climate damage, caused mostly by the methods of past technologies and their feedstocks. The Transportation Sector has no choice but to use what we give them! However, the NWABF Project will use most of its own internally created energy, lowering the demand for non-renewable electricity as much as possible.

NWABF will utilize our own steam and tail gasses to drive turbines and hopefully, even upload extra energy to the grid. Sustainability can be achieved without shortcutting the system and a critical element to accomplish this is by having a reliable source for Life Cycle Analysis. This will prove to be the path to the successful completion and funding finish line, for developers to benefit from these laws.

David P. Smoot
Author: David P. Smoot

Mr. Smoot has an extensive business background covering almost 45 years, starting with his honorable discharge from the U. S. Army Reserves. Mr. Smoot spent 20 years in the micro- computer hardware and software industries, where he held positions as Director of Operations for Digital Research in Pacific Grove, CA, working with IBM Boca Raton and Intel, as well as senior positions with Informix, a database software company prior to Digital Research, (DRI), as it was known.


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