USDA is seeking ideas to promote climate smart practices that create equitable economic opportunities in the agriculture sector. Making the most of existing USDA programs and strengthening markets for renewable energy, renewable chemicals, and bioproducts is a winning strategy. Congressional leaders can work with USDA to make progress today through simple improvements to existing programs.

The Renewable Energy for America Program (REAP) is a great place to start. Congress should provide the popular REAP program an infusion of funding to meet demand; the program has been oversubscribed year after year. USDA could, with Congress’ help, also increase the cost-sharing portion of its grants to 50 percent.  Perhaps most importantly, the Department can ensure that a significant portion of grants – at least 15 percent – is put into a “reserve fund” for underserved renewable technologies, like distributed wind power and biogas energy.

The REAP loan program has been very successful in accelerating renewable energy adoption in rural America. However, the vast majority of loan guarantee funding has been directed to larger solar projects.  Small businesses, or non-solar technologies, have not had the same access to REAP, because lenders shy away from the perceived risks of these types of projects.  Increasing the loan guarantee percentage for smaller loans (under $1 million) can help small rural businesses access the program and deploy renewable energy projects.

Congress can also provide more funding to USDA’s Business and Industry Loan Program, which is a key component of USDA’s renewable energy portfolio. For example, B&I is the only program that will fund stand-alone storage. Right now, the amounts requested for pending loan guarantees exceeds the remaining balance for lending by $94 million. Because of its popularity, the program could run out of funding before the middle of this year, shutting off access to credit for rural businesses at a crucial time to “build back better.”

At the same time, USDA could use its existing credit authority to support innovation in low-carbon renewable energy. The agency should look at utilizing Commodity Credit Corporation funds to supplement existing programs like REAP and “Biopreferred” and further support renewable energy infrastructure, perhaps even supporting new initiatives. Using a small portion of the $30 billion fund to support new agricultural markets and products would fit the purpose of the corporation and complement the new “carbon bank” that Secretary Vilsack and Sen. Debbie Stabenow (D-MI) have spoken about.

USDA should also make sustainable aviation fuels (SAF) a priority. Low-carbon aviation fuels are going to be essential to mitigating climate change in one of the hardest-to-decarbonize sectors. Aviation accounts for 2.5 percent of global carbon emissions and that figure is expected to rise in the coming years. Sustainable biofuels are absolutely necessary in the aviation sector for the foreseeable future.

USDA, with Congress’ help, could revitalize existing tools – such as the Biorefinery Assistance, Renewable Chemical and Biobased Product Manufacturing Program – to better support sustainable biofuel as well as fledgling SAF producers investing in commercialization. USDA could expand program eligibility to all low-carbon crops and set objective metrics, with timetables, for loan approvals.

Another way to support SAF would be for USDA to look at re-booting and improving the former “Farm to Fly” Initiative, as an opportunity to collaborate with the private sector and other federal agencies. Prioritizing renewable jet fuel from biomass is an important near-term opportunity to reduce greenhouse gas emissions while encouraging new markets for our farmers and promoting sustainable agriculture.

USDA should also create additional opportunities to use wood that is at risk for contributing to catastrophic wildfires. Biomass power facilities take on many tons of fiber that cannot be used otherwise. These facilities should be incentivized to utilize low-value fiber to promote overall forest health and reduce emissions. Support should be limited to biomass power facilities that meet high sustainability requirements set by the U.S. Forest Service. 

USDA has numerous programs that for years have supported the agriculture sector in developing new energy markets. These programs are already climate-informed; now they can be climate focused. USDA can expand and improve these programs to meet the goals of encouraging climate-smart agriculture and opening new rural economic opportunities. And Congress can prioritize the funding needed to make the most of the opportunity at hand.

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Lloyd Ritter, Esq., Green Capitol LLC, and Director of the Ag Energy Coalition 

The Agriculture Energy Coalition (AgEC) represents a diverse set of interests in agriculture and renewable energy, such as farmers, advanced biofuel and bio-based manufacturers, clean technology companies, rural lenders, and environmental NGOs.