RFA Looking for More User-Friendly Loan Guarantee Program

Different criteria are needed when looking at loan applications for renewable fuels.

Published on: Oct 27, 2009

The Renewable Fuels Association is asking Energy Secretary Steven Chu for some changes in the loan guarantee program for biofuel biorefineries. RFA notes advanced biofuel companies need access to capital but says potential funding mechanisms like the loan guarantee program aren't functioning as efficiently and effectively as they should.

 

In a letter to Secretary Chu RFA President and CEO Bob Dinneen says a fundamental flaw of the program is that the department is weighing the applications of emerging technology projects, such as cellulosic ethanol, using the same criteria as mature technology projects and against technologies like wind and solar that have been commercialized in other countries. Dinneen says the challenges facing next generation advanced biofuels are just different from those of the renewable power sector and DOE needs to recognize the unique challenges of emerging biofuel technologies and establish criteria appropriate to them.

 

RFA is specifically asking the Energy Department for several things including eliminating the requirement that applicants have year-long off-take agreements in place and reviewing applications declined to determine what fixes can be made to correct perceived deficiencies. Unless changes are made Dinneen says few if any cellulosic biomass projects will be built to meet the advanced biofuels targets set forth in the Renewable Fuels Standard. RFA cautions similar problems may be developing with USDA's new loan guarantee program.