§16251 Production incentives for cellulosic biofuels

Summary

Pays producers to make cellulosic biofuels and push the industry to grow so the United States reaches 1,000,000,000 gallons a year by 2015. The Energy Secretary, working with the Agriculture Secretary, the Defense Secretary, and the EPA Administrator, will run the program. Definitions: cellulosic biofuels = fuels made from plant cellulosic materials. eligible entity = a U.S. producer with required permits and whatever financial rules the Secretary sets. At first the Secretary will make set per‑gallon payments. Then the Secretary will hold reverse auctions (bidders name the per‑gallon incentive they want and how much they will produce). The first auction must happen no later than 1 year after the first U.S. production year of 100,000,000 gallons, or no later than 3 years after August 8, 2005, whichever is sooner. Auctions continue each year until U.S. production reaches 1,000,000,000 gallons a year or until 10 years after August 8, 2005. Winners get their bid price for each gallon they produce and sell for the first 6 years of operation and must start production within 3 years of the auction. Payment limits include caps set for the first 4 years, a declining cap later so fuels become cost competitive, no more than 25% of an auction’s funds to one project, no more than $100,000,000 in a year, and no more than $1,000,000,000 total. Projects that boost local economies, include farmers as equity partners, and fairly reward feedstock suppliers get priority. Up to $250,000,000 is authorized to run the program.