§16251 Production Incentives for Cellulosic Biofuels

Summary

Creates a program to speed up making and selling cellulosic biofuels so the country reaches 1,000,000,000 gallons a year by 2015, makes those fuels cost‑competitive with gasoline and diesel after 2015, and includes small feedstock growers and rural businesses. Two terms: "cellulosic biofuels" = fuel made from cellulosic plant feedstocks. "Eligible entity" = a U.S. producer with a permitted facility that meets financial rules set by the Secretary. The Secretary, working with Agriculture, Defense, and the EPA, must pay production incentives. At first the Secretary sets fixed per‑gallon payments. Once a first reverse auction is triggered (either within 1 year after the U.S. first produces 100,000,000 gallons in a year or within 3 years after August 8, 2005), auctions are held each year until the earlier of the first year the U.S. makes 1,000,000,000 gallons a year or 10 years after August 8, 2005. In auctions, companies bid the per‑gallon incentive they want and the gallons they expect to produce; lowest bids win until funds are used. Winners get the auctioned payment for each gallon made and sold for their first 6 years, must start production within 3 years of the auction, and face limits on payments, project shares, annual and lifetime program totals. Priority goes to projects that boost local economies, include farmers or co‑ops as owners, and fairly reward feedstock suppliers. Up to $250,000,000 is authorized for the program.