Biofuels incentive program: Growing the crops of the future

Coming soon to Minneosta: perennial landscapes that can be used to produce fuel, energy and green chemicals while protecting our water quality and boosting farm profits.

Note: This bill was successfully passed in 2016! Check out FMR's current legislative efforts.
 

FMR, in concert with a diverse group of allies, is working help advance legislation to create a powerful new incentive for farmers to plant perennial crops right here in Minnesota.

Rather than pay farmers to take land out of production (a common and expensive conservation strategy), our approach aims to provide a market-based incentive for farm operations to replace leaky annual crops like corn and soybeans with profitable perennial crops suitable for use as feedstock for next generation biofuels, green chemicals, and sustainable energy facilities across our state.

Background

Despite decades of cost-share efforts and voluntary conservation programs, agricultural runoff remains the largest source of pollution to Minnesota’s surface waters. Croplands dominated by corn and soybean production are prone to runoff pollution and erosion, while providing little habitat or climate benefit.

Despite our admirable conservation efforts, state research has made it clear that we cannot achieve clean water goals in agricultural areas without widespread conversion from annual crops like corn and soybeans to perennial landscape cover. These perennial plants (plants that can live for multiple years rather than a single growing season) not only protect our water quality, but they are also great for habitat, soil health, clean air and pollinator health

Sadly, the state has lost more than 700,000 acres of conservation lands to the plow since 2007, with another 300,000 acres expected to be lost in the next five years. With more than 23,000,000 acres of agricultural lands in Minnesota (most of which are planted with annual crops), taxpayers cannot possibly afford to pay landowners to "retire" enough crop land to acheive our water quality goals. That's why we need market-based solutions that incentivize landowners to plant profitable perennial crops that are suitable for harvest and sale.

Markets: driving cropping system change for good

The Workings Lands Watershed Restoration Program bill asks for $479,000 in fiscal year 2017 for the state's Board of Water and Soil Resources (BWSR) to prepare a plan for creating a state funded biofuels incentive program.

The incentive program will establish long-term contract payments for farm operations that grow perennial crops for biomass processing facilities, and prioritize those contracts in the areas where a transition to perennial crops will have the greatest water quality benefit.

By establishing a program that promotes the development of perennial-based cropping systems, we can achieve the state's long-term renewable fuel and water quality goals simultaneously, while also enhancing habitat, soil health and climate resiliency throughout the state.

Building on 2015 Legislation.

During the 2015 legislative session, FMR teamed up with our environmental allies and a coalition of bio-energy, agriculture and biofuel groups to pass an innovative biofuels production incentive program. That program aims to catalyze a new, more sustainable biofuels industry in Minnesota by providing a state subsidy to refineries producing advanced biofuels.

While other states are welcoming new biofuel facilities, those facilities use mostly corn stover (the stalks leaves and stems leftover after corn harvest). Sadly, removing corn stover from fields after harvest leaves fields barren for months at a time - unprotected by crop residues - resulting in fields that leech pollutants and lose soil to erosion. The lack of cover also impacts soil organic matter and overall soil health, which can impair crop health and reduce the soil's ability to retain water and prevent runoff.

Minnesota's biofuels incentive program is unique in that it requires all participating refineries to get 50% of their biofuel feedstock to come from perennial crops or cover crops by the fifth year of production. This 50% rule balances corn stover harvest with perennial crops and cover crops that produce profitable fuels while protecting our natural resources.

However, since so few farmers currently grow perennial crops or cover crops, its clear that refineries won't be built in Minnesota until they know a sufficient supply of those crops will be available for their use. That's where our 2016 bill comes in to play.

By creating a powerful incentive for farm operations to grow perennial crops, these advanced biofuel facilities can move to Minnesota and participate in the state incentive program secure in the knowledge that local landowners can profitably plant the perennial crops that facilities need to meet the 50% threshold.

As a result, this program becomes a win-win for everyone.

  • Farms can diversity their cropping systems to include perennial crops while maintaining profitability;
  • Perennial crops become economically viable, incentivizing more living cover on the land;
  • Minnesota's nascent green chemical and biofuels industry gets a jumpstart, helping Minnesota claim its rightful place as world leaders in advanced perennial biofuel production;
  • Minnesota's fuel mix gets cleaner, greener, and more sustainable; and
  • We work together to move the needle on water quality in our state using a market-based approach rather than regulation.

FMR is proud to be a part of this effort, and looks forward to this bill being passed and signed into law during the 2016 legislative session.