The Minnesota Corn Growers Association (MCGA) is one of several organizations supporting the Bioeconomy bill during the ongoing Minnesota legislative session. The Bioeconomy bill would develop new market opportunities for Minnesota corn farmers, create new jobs and economic output, require minimal up-front investment from the state and protect our state’s land, soil and water resources.
As with many new concepts, the Bioeconomy bill is complicated, but the program and objectives are simple. To try and develop a better understanding of the Bioeconomy bill, here are 5 things corn farmers (and everyone else) should know about the bill:
1. The Bioeconomy bill opens new markets for Minnesota’s corn farmers. Under the bill, industries that use corn stalks, crop residues and other compounds produced from agricultural or forestry materials that displace compounds typically made from petroleum would receive a much-needed boost. With corn prices down more than 50 percent in recent years, it’s essential that corn farmers continue working to open new markets and add value to their crop. The Bioeconomy bill does that.
Examples of eligible projects include:
- Cellulosic ethanol from corn fiber, crop residues, perennials and cover crops
- Commercial-scale biomass heating projects
- High value biobased chemicals from corn sugar
- Plastics, solvents, personal care products, polymers and other compounds typically made from petroleum, which would now be made from biobased materials found on many Minnesota farm fields.
2. This bill positions Minnesota as the best place in the world for developing renewable, biobased chemicals, advanced biofuels and biomass thermal energy. Minnesota biochecmical companies have attracted $200 million in venture capital funding, received more than $1.6 million in federal grants and have been awarded 200 patents and patent applications.
Minnesota’s bioindustrial sector, which includes biochemicals, biofuels and biomass thermal energy, currently employs 11,000 people with an average wage of $75,000 per year. The Bioeconomy Bill will invest about $235 million annually over 15 years, which will help our state gain over $830 million in new economic output and over 3,000 jobs annually. Those benefits will continue once the program expires.
3. The Bioeconomy bill is not another “subsidy for corn ethanol.” It does not impact traditional ethanol production in any way. Here’s how the production incentive works.
First, we should state clearly that current ethanol production is not subsidized.
Second, the Bioeconomy bill creates a production incentive, which means there is no upfront investment from the state. The state of Minnesota pays nothing until a project is up and running and producing a viable product.
Third, the production incentive applies not only to the advanced biofuels portion of the bill, but also renewable chemicals and biomass thermal energy.
Fourth, the return on a relatively small potential investment is huge. Minnesota invested $450 million to help build our state’s 21 ethanol plants. Today, the ethanol industry adds $5 billion per year to our economy and supports thousands of local jobs, many in rural areas.
Fifth, the production incentives will not only pay off for our economy, but also our environment. Products made from biobased sources are environmentally safer and less carbon intensive than petroleum-derived products. We want to help companies invest in renewable technology, and reward them for coming to Minnesota and doing something innovative. Being innovative and forward-thinking almost always involves more risk than simply starting up a status quo production facility.
4. The environmental benefits of the Bioeconomy bill are numerous. According to the Environmental Protection Agency, cellulosic ethanol, which is considered an advanced biofuel, must have a carbon footprint at least 60 percent lower than gasoline. Many renewable chemicals are environmentally-safer than their petroleum-based counterparts. The bill includes a responsible sourcing plan element to ensure farmers use the best conservation practices when growing feedstock.
5. When they work together, agricultural, forestry, industrial and environmental leaders can develop public policy that grows our economy and protects our land, soil and water resources. Too often, projects like the Bioeconomy Bill don’t see the light of day because environmental activists and proponents for modern agriculture and economic development can’t get along.
The Bioeconomy bill is an excellent example of what can happen when groups with differing opinions come together, create a dialogue around those differences, and develop a practical and workable solution.