§7546 Renewable fuel

Summary

Pays for loan guarantees and grants to build and test commercial plants that make ethanol from cellulosic biomass and from sucrose. The Secretary of Energy can back loans for up to 4 demonstration projects. At least one project must use cereal straw and one must use municipal solid waste. Each project must be designed to make at least 30,000,000 gallons of ethanol per year. Applicants must show the design was proven by a continuous process that has produced at least 50,000 gallons total, pass a full technical review, have project performance guarantees, be economically viable with the loan guarantee, and show reasonable assurance the loan will be repaid. Guarantees may cover up to 80% of estimated project cost but no more than $250,000,000 per project. The Secretary may add guarantees for cost overruns, covering up to 80% of extra costs but not more than 15% of the original guarantee amount, and must guarantee 100% of principal and interest for a loan made under that rule. Applicants need binding equity commitments of at least 20% of total cost. If funds do not let the Secretary guarantee 3 projects, projects will be guaranteed in the order applications arrive. Applications must be approved or denied within 90 days. The law also authorizes $4,000,000 per year for fiscal years 2005 through 2007 for a resource center at Mississippi State and Oklahoma State Universities. The Administrator must give grants to develop renewable fuel technology in RFG States with low ethanol production; $25,000,000 is authorized each year for fiscal years 2006 through 2010. The Secretary may give grants to merchant producers for U.S. facilities using agricultural residues or municipal solid waste; $250,000,000 is authorized for fiscal year 2006 and $400,000,000 for fiscal year 2007. Municipal solid waste — same meaning as “solid waste” in section 6903. RFG State — a State that contains one or more “covered areas” under section 7545(k)(10)(D). Secretary — the Secretary of Energy.