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Incentives for next generation products in bioeconomy could get funding boost

Cleaning products from plants, energy from culled trees, and fuel from corn fiber are examples of products in the bioeconomy.

Since 2015, the state has offered incentives to spur production of the next generation of biofuels, renewable chemicals and energy from biomass through the Department of Agriculture’s bioincentive program. There is also a bonus for production using biomass from perennial or cover crops.

The incentives are an effort to move the state from a reliance on petroleum toward the use of agricultural or forestry products, often waste or byproducts.

Minnesota’s bioincentive program is a unique approach to attracting new business because upfront money comes from the business and incentives are paid based on production, said Brendan Jordan, vice president of transportation and fuels at the Great Plains Institute. He called it a boondoggle-proof program because it’s impossible not to get a return on state investment.

However, starting in 2019 claims exceeded funding available and the gap has grown in each ensuing biennium. The total deficit stands at $9.83 million, according to a January report.

It’s a situation Rep. Brad Tabke (DFL-Shakopee) aims to address with HF1477, which would appropriate $10 million in fiscal year 2023 to address back claims and increase the annual appropriation to $15 million through 2036.

The House Agriculture Finance and Policy Committee held the bill over Thursday for possible omnibus bill inclusion.  

The program does exactly what the state wants it to do, said Stacy Cook, president of Koda Energy. He believes the bill would right-size the program to meet demand.

The bioincentive program would put the state in a better position to spur production in low-carbon fuels, said Brian Werner, executive director of the Minnesota Bio-Fuels Association. He said the federal government is putting big incentives into cleaner transportation and aviation fuels through the Inflation Reduction Act.

“Complementary state investment through legislation like this will ensure that Minnesota continues to harness the power of our state’s agricultural, forestry and energy resources to reduce transportation-related greenhouse gas emissions,” Werner said. 

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