On Wednesday, I presented legislation in the Senate’s Energy and Utilities Finance Committee that would increase funding for Minnesota’s AGRI Bioincentive Program. The legislation will ensure that companies who produce advanced biofuels, renewable chemicals, or use biomass to produce thermal energy are adequately compensated.

In 2015, the legislature went out of its way to establish this program to create jobs and incentivize new technology and products through this program. Unfortunately, the funding failed to meet the demand. This put many companies in a difficult position where they received 50 cents on the dollar from what they were promised, and that lack of follow-through has threatened to undermine this program’s success. When we designed it, we wanted to encourage people to invest money, create jobs, and make products related to the bio-industry. Today, we’re following up on that goal, making companies whole and ensuring that we make the proper investment to keep innovating into the future.”

The Minnesota State Legislature established the Bioincentive Program in 2015 to encourage commercial-scale production of advanced biofuels, renewable chemicals, and biomass thermal energy through production incentive payments. To receive incentive payments, production facilities within Minnesota must begin producing biofuels, renewable chemicals, or biomass thermal energy before June 30, 2025. They must also meet quarterly minimum production levels, use biomass from agricultural or forestry sources or the organic portion of solid waste, source 80 percent of renewable biomass from Minnesota, and harvest agricultural and forestry biomass in ways that do not harm the environment.

Unfortunately, claims for Bioincentive Program payments exceed the amount appropriated to make these payments. In 2020, claims were over $5 million, exceeding what was appropriated for this purpose by over $2.5 million.  Under current law, if the total amount of incentive payments for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner makes the payments on a pro-rated or first-come, first-served basis.

This bill appropriates an additional $5 million for incentive payments this fiscal year, and $10 million per year in the upcoming years of this biennium, ensuring solvency while encouraging more businesses to participate.