United States: Section 9003 Biorefinery And Renewable Chemical Loan Program Gains Momentum

Taite McDonald is a Partner in the Washington D.C. office

Mark Kalpin is a Partner in the Boston office

Seth Belzley is a Partner in the Denver office and a Partner in the Houston office


  • The U.S. Department of Agriculture's 9003 Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (Section 9003 Program) had an unprecedented year in 2017, issuing numerous conditional commitments and closing its first transaction since 2011.
  • The Section 9003 Program's success is a result of an improved program structure and technology advancements, in combination with state-level programs such as the California Low Carbon Fuel Standard.
  • Along with the Section 9003 Program's relatively low cost of applying and competitive lending terms, this recent success and available capital highlights an attractive opportunity for equity investors and new projects in the bioenergy technology sector.

After years of stalled projects and program improvements, the U.S. Department of Agriculture's (USDA) Section 9003 Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (Section 9003 Program) had an unprecedented year in 2017. During the past six months, the Section 9003 Program has issued numerous conditional commitments and closed its first transaction since 2011. This momentum is a result of the improved program structure and technology advancements, in combination with state-level programs such as the California Low Carbon Fuel Standard (LCFS).

More notably, this creates an attractive opportunity for equity investors and new projects alike, since capital remains available. Accordingly, the Section 9003 Program remains an attractive, viable and proven path to commercialization for bioenergy-related technologies due to its recent successes in combination with the relatively low cost of applying and competitive lending terms.

Program Background: Section 9003 of the 2008 and 2014 Farm Bill authorizes the USDA to guarantee loans of up to $250 million for the development and construction of commercial-scale biorefineries utilizing new and emerging technologies that produce advanced biofuels or renewable chemicals. To date, the Section 9003 Program has been funded through approximately $460 million allocated to cover the program's credit subsidy costs, which could then be leveraged three to four times to fund an approximately $1.5 billion to $2 billion loan guarantee facility. To date, more than 15 conditional commitments have been issued by the program, of which only five have achieved financial close due to various programmatic and awardee-specific developments. For additional background and history on the program, see Holland & Knight's Government Energy Finance Blog post, "USDA Loan Guarantee Funding Solicitation Announced," July 1, 2015.

View larger image

Program Funding and Outlook: Unlike years past, the Section 9003 Program no longer formally makes an estimated amount of funding available through a biannual Notice of Funding Announcement (NOFA). Instead, the Section 9003 Program remains open on an ongoing basis, accepting applications on April 1 and Oct. 1 of each year until appropriations have been expended. In addition to the closed projects set forth above, approximately $600 million remains committed to projects with active conditional commitments. Those who follow the Section 9003 Program may recognize that this is significantly less than the amounts previously committed to projects. This is a result of USDA's recent action to deobligate hundreds of millions of dollars of conditional commitments, so that additional funding can be made available to projects that have yet to reach conditional commitment and new applicants. Therefore, hundreds of millions of dollars remain available for new applicants interested in entering the program in 2018.

Farm Bill Reauthorization: In addition to this immediate opportunity with the Section 9003 Program, the possibility remains for additional budget authority, and subsequent loan guarantees, through additional appropriations in the upcoming Farm Bill. While specifics on the amount of funding that may become available have yet to be released, the Program is well positioned on Capitol Hill due to its recent success and constituent communication regarding its value to rural America. However, companies in the Section 9003 Program pipeline that have yet to receive conditional commitments should note that the 2014 Farm Bill funding formally expires on Sept. 30, 2018, and the Farm Bill is not likely to be fully reauthorized this year. Therefore, while the Farm Bill waits in the wings as Congress prioritizes immigration and infrastructure, representatives and entities should continue to work with Congress and garner stronger support for the continuation of the Section 9003 Program's authorization and additional appropriations.

Application Materials: The application process, which has remained the same since USDA formally published an Interim Final Rule to the Federal Register on June 24, 2015, has also proven to be conducive to company needs, commercialization timelines and project pathways. The application process includes a Letter of Intent, followed by Phase 1 and Phase 2 submissions. The upcoming Letter of Intent deadlines are March 3 and Sept. 1, 2018. The upcoming Phase 1 submission deadlines are April 2 and Oct. 1, 2018. USDA will invite eligible, competitive proposals to submit a Phase 2 application following a positive determination of a Phase 1 submission. The Program's Application Guide fully outlines the application requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions