USDA Praises Industry, Midwest Stakeholders, as they Sign an Agreement To Develop Commercial Biofuels
Great things continue to happen as America moves forward in developing an “all of the above” strategy to become more energy independent. For example, an agreement was signed between aviation industry leaders and Midwest stakeholders to develop and commercialize sustainable biofuels. USDA will act as an advisor to this effort.
The Midwest Aviation Sustainable Biofuels Initiative (MASBI) supports President Obama’s goal of achieving greater energy independence. Increasing our reliance on sustainable, home-grown sources of energy is good for the nation, good for business, good for rural economies and good for the environment. And agreements like this increase the effectiveness of those efforts, as will, as the President has called for: maintaining the favorable tax treatments such as section 48C of the Internal Revenue Code which provides an investment tax credit of up to 30 percent of qualified investment in a qualifying advanced energy project; the Producer Tax Credit (PTC) and the Accelerated Depreciation Allowance for cellulosic biofuel producers; and the biodiesel tax credit, all of which reduce investment risk. We know these work because accelerated depreciation has been offered for decades to the oil and gas industry to encourage investment and innovation.
The agreement calls for the parties to hold workshops with stakeholders to identify appropriate feedstocks, supply chain logistics and a set of sustainability principles. It was signed by United Air Lines Inc., the Boeing Co., Honeywell UOP, the City of Chicago’s Department of Aviation and the Clean Energy Trust. MASBI’s Advisory Council will be comprised of national leaders in advanced biofuels including the U.S. Department of Agriculture, U.S. Department of the Navy, other Federal agencies, non-governmental organizations, and academic institutions.
One of the group’s principal tasks is to identify the challenges of creating viable markets in the Midwest for aviation biofuels. Specifically, it will determine:
- The transportation and infrastructure needs to deliver biofuels
- The growth potential for commercial aviation biofuels
- The best fuel source(s)
- Policies that are needed to stimulate private-market development of biofuels
The agreement calls for the parties to hold 4-6 workshops by April 2013. The workshops will include feedstock growers, processors, fuel users, financiers, policy makers and non-government organizations. A report will be produced at the conclusion of the workshops.
USDA’s support of the Midwest Aviation Sustainable Biofuels Initiative builds upon USDA’s ongoing work to further the development of biofuels. USDA already has several memorandums of understanding (MOU) on the subject and several programs to fund biofuels research and development. In January 2010, Agriculture Secretary Vilsack and Navy Secretary Ray Mabus signed an MOU to develop advanced biofuels and other renewable energy systems for commercial and military transportation needs. Also in 2010, Under Secretary Dallas Tonsager signed an MOU with Airlines for America on the Farm to Fly project which has studied the feedstock and infrastructure needs for the development of aviation biofuels in the U.S. In addition, Secretaries Vilsack, Mabus and Department of Energy Secretary Steven Chu signed an agreement in January 2011 to work with private industry to develop drop-in biofuels for military and commercial uses. Most recently, in January 2012, USDA, Boeing, and the Air Transport Association of America, Inc. (now Airlines for America), issued a report summarizing their agreement to work together to accelerate the availability of commercially viable and sustainable aviation biofuels.
For more information about today’s announcement click here.