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Bioenergy financing applications due May 12
$17 million program will help jumpstart new industry in Washington

OLYMPIA – The Washington State Department of Agriculture is now accepting applications for Energy Freedom Loans to finance the development of new production facilities for bioenergy, including biodiesel from oil seed crushers and methane from anaerobic digesters. The legislature has approved $17 million for low-interest loans to help launch an expanded bioenergy industry in the state.

“This is an exciting opportunity for our state,” said WSDA Director Valoria Loveland. “We know that bioenergy is a viable source of alternative fuels to run our vehicles. America’s dependence on petroleum puts the future of our economy, not to mention our national security, at risk. It’s our goal to help our farmers and Washington businesses be a part of this new and growing industry that is already gaining a foothold in other states.”

While the biodiesel produced in the Midwest is usually made from soybean oil, Washington’s climate is better suited to growing canola, mustard and rapeseed. The department is beginning to work with the state’s oilseed industry and other interested groups to provide the guidance and regulations needed to boost the production of oilseed crops in Washington.

Anaerobic digesters convert livestock waste or other organic matter into methane that can be used to generate electricity or power industrial engines. Livestock producers have been interested in exploring alternative uses for the animal waste that is most often applied to fields as fertilizer.

The legislature earmarked $10.25 million for five specific biodiesel projects, but the remaining $6.75 million is available for other projects through a competitive bid process. Every project, whether earmarked or not, must submit an application package by May 12. Successful applications will demonstrate long-term financial viability, job creation and benefits to the agriculture economy. Energy Freedom Loan application materials and information can be found at the WSDA Web site at www.agr.wa.gov/bioenergy

Under the new law, the loans are available to local governments, ports and other public entities. The loans are intended to leverage additional private financing. Local matching funds must cover at least one-half of the project’s total cost. The local public entities may partner with private companies to develop the fuel or energy production facilities.

These loans are for a 10-year term with a one-percent annual percentage rate. WSDA intends to provide a “Notice to Proceed” for each successful application in July.

Greg Wright, WSDA’s new bioenergy coordinator, is working with the various local, state and federal agencies that are involved in financing or locating bioenergy production facilities. He will also lead WSDA’s effort to evaluate applications and approve loans for biodiesel and other bioenergy projects around the state.

“The financing of the bioenergy production facilities will be complex,” said Wright. “But the effort is critical to the development of a biofuels industry that can ultimately provide a new crop rotation for the farmers of the state. The department will need to establish strategic partnerships with other state and federal agencies to draw on the economic development expertise of these public entities. Our goal is to review and approve several applications for funds this year so that production facilities can begin breaking ground as soon as possible.”

Under a new state renewable fuel standard, two percent of motor vehicle fuels sold in the state after Dec. 1, 2008 must be produced from vegetable oils, wheat and other renewable sources. WSDA is expanding its fuel quality monitoring capabilities within its Weights and Measures Program. The program will be responsible for establishing and implementing rules for fuel quality and labeling to ensure that biofuels meet state and federal quality standards.

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