Minnesota Policy Leaders Reaffirm Support for Bioeconomy Production Incentive

April 24, 2017 | | Financing

Lede: Funding for the Bioeconomy Production Incentive has been included in budget proposals from the Minnesota Governor, House, and Senate

The Minnesota Legislature convened in early January and has been busy advancing major spending and policy bills. The main work of the Minnesota legislative session in odd years is to finalize a two-year state budget. The Bioeconomy Coalition has been working to ensure that funding for the advanced biofuels, biobased chemicals, and biomass thermal energy production incentive programs are included in the two-year budget. The budget currently being debated at the legislature would cover fiscal years 2018 and 2019.

In 2015, the members and partners of the Bioeconomy Coalition advocated for the creation of a new financing program to incentivize the commercial production of advanced biofuels, biobased chemicals, and biomass thermal energy in Minnesota using agriculture, forestry, and organic waste feedstocks. The Coalition was successful, helping to create the program appropriating $2 million in the Minnesota Department of Agriculture budget to administer the program and make payments to eligible facilities. More background can be found here.

The Production Incentive Program is structured to make incentive payments to qualified facilities for ten years. Since this is fundamental to the design of the program, it is critical to not only have funding included in the current two-year budget but also have a placeholder of funding included in the “base” or fiscal years 2020 and 2021.

Governor Mark Dayton released the administration’s budget framework in March. The full House and Senate have each approved major spending bills for all budget jurisdictions and agencies. Here is a quick review of what has been included in the spending proposal from the Governor, House, and Senate for the Bioeconomy Production Incentive.

 

Bioeconomy Production Incentive Funding Levels in Budget Proposals

Bioeconomy Coalition of MN | Budget Proposal Table

As you can see from the table above, the same level of funding for the Bioeconomy Production Incentive is included in all three budget proposals. As we move into the last several weeks of the Minnesota legislative session, the House and Senate will work out the differences in budget proposals through the conference committee process and will then work out differences between the legislature and the Governor. Since the production incentive is included in all three budget proposals at the same level, prospects are very good that the Bioeconomy Production Incentive will be allocated $3 million in the next two-year budget for the State of Minnesota. This will provide the opportunity for qualified facilities to take advantage of the program.

Inclusion in all three budget proposals also sends a strong signal to the level of commitment public policy leaders have to the program. This will be key in future years as the program grows and more qualified projects look to access the program. In order to fulfill the full promise of the program, public policy leaders will need to allocate more funding for the program to truly make Minnesota one of the best places to grow and build the bioeconomy.

Convened by the Great Plains Institute, the Bioeconomy Coalition of Minnesota seeks to make Minnesota the best place in the world to grow an environmentally and economically sustainable bioeconomy through individual project support, education of stakeholders and policy leaders, research and analysis, communication, policy and regulatory advocacy, and strategic planning.