USDA, Navy and DOE Show Renewable Fuels Support By Becoming Investors

The U.S. DOE, the U.S. Navy and the USDA want to establish a biomass-based value chain capable of producing drop-in biofuels, and they are willing to spend the money to do so.
By Luke Geiver | July 02, 2012

The historic collaboration by the U.S. DOE, the U.S. Navy and the USDA to establish a biomass-based value chain capable of producing drop-in biofuels via $130 million in funding,  is a major boon to the advanced biofuels production industry. But, neither the unique federal agency team approach nor the simple fact that a few lucky applicants will be awarded that funding shows the significance of the offering. The available funding will not be given through a loan guarantee program or a tax credit. As Mark Riedy, partner for Mintz Levin PC, told me, this is investment money.

Don’t be distracted by the complexities of the funding protocol, one that will take place through a two-phase process. Applicants who aren’t accepted in phase one will not be eligible for phase two. The funding for phase one is guaranteed for 2012, but not for 2013. Applications are due by the middle of August, should not exceed the page limit noted in the directions, and, as Riedy says, should only be submitted by serious players.

Forget (at least until its time to apply) all of that, because the nature of this funding opportunity shows the support this industry has. This funding opportunity isn’t based on a federal agency’s willingness to vouch or cover for an advanced biofuels production company seeking a bank loan (loan guarantee), and this isn’t about a federal agency giving out a tax break. This is about a federal agency, the U.S. Air Force in this case, proving its support, want, and outright need for drop-in renewable fuels by doing the number one thing any organization or person can do: spend its own money.

The winners will be announced in March 2013. The funding doesn’t have to be awarded, but rest assured. Riedy says that this is going to happen, and that the Air Force intends to show its support for renewable fuels production. “They intend,” he told me, “to spend money.”