[Federal Register Volume 81, Number 250 (Thursday, December 29, 2016)]
[Notices]
[Pages 95956-95958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31582]


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 Notices
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  Federal Register / Vol. 81, No. 250 / Thursday, December 29, 2016 / 
Notices  

[[Page 95956]]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation


Notice of Funds Availability (NOFA); Farm-to-Fleet Feedstock 
Program Biofuel Production Incentive (BPI)

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: In support and for the purposes of the Farm-to-Fleet Program, 
the U.S. Department of Agriculture (USDA) Commodity Credit Corporation 
(CCC) is announcing that funding is available to pay a BPI to companies 
that are refining biofuel in the United States from certain 
domestically grown feedstocks converted to drop-in biofuel. If 
eligibility requirements are met, subject to availability of funds, the 
USDA Farm Service Agency (FSA) will use CCC funds to pay a per gallon 
incentive amount for JP-5 and F-76 blended biofuels produced from 
eligible feedstocks and delivered to the U.S. Department of Navy (U.S. 
Navy). Up to $50 million of CCC funds is available for obligation 
through fiscal year (FY) 2018. USDA does not expect funding to be a 
constraint through FY 2018; however, should there be a demand in excess 
of $50 million, USDA would consider requesting additional funds be made 
available for BPI payments. As explained in this NOFA, the BPI payment 
rate will range between 8.335 to 25 cents per blended gallon of biofuel 
depending on the blended rate; the payment rate will not be based on 
which eligible feedstock is used to produce the biofuel. The total BPI 
payment will be determined by multiplying the payment rate by the 
number of gallons of qualifying biofuel blend delivered under a Defense 
Logistics Agency (DLA) Energy contract. Biofuel vendors that deliver 
blended biofuel under a DLA Energy contract on behalf of the U.S. Navy 
that was refined in the United States and was produced from a 
domestically grown eligible feedstock are referred to in this NOFA as 
``claimants'' for the BPI payment. As further specified in the 
Background of this NOFA and subject to the availability of funds, FSA 
will make a BPI payment to the claimant upon receipt of the following 
information: Quantity of delivered biofuel blend, identification of the 
U.S. produced feedstock from which the biofuel was produced, and the 
blend rate.

FOR FURTHER INFORMATION CONTACT: Kelly Novak, (202) 720-4053.

ADDRESSES: As a claimant, submit your information to request a BPI 
Payment to Farm Service Agency, USDA, Attn: Kelly Novak, (202) 720-
4053; 1400 Independence Ave SW., Room 4765, Washington, DC 20250; or 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The joint USDA and U.S. Navy Farm-to-Fleet Program was announced in 
December 2013 and added the purchase of biofuel blends into Department 
of Defense (DOD) domestic solicitations for JP-5 and F-76 fuels. Funds 
from USDA's CCC are used for this effort to help increase the domestic 
consumption of agricultural commodities in the biofuel market. The CCC 
Charter Act (15 U.S.C. 714c(e)) authorizes CCC to use its general 
powers to increase the domestic consumption of agricultural commodities 
(other than tobacco) by expanding or aiding in the expansion of 
domestic markets or by developing or aiding in the development of new 
and additional markets, marketing facilities, and uses for such 
commodities. CCC funding is available to pay a BPI for delivered 
blended biofuel that used certain feedstocks converted to drop-in 
biofuel. USDA is issuing this NOFA to improve transparency and simplify 
the process by which CCC funds are administered in support and for the 
purposes of expanding markets for bioenergy feedstocks through the 
increased use of eligible feedstocks to produce biofuel for the U.S. 
Navy. If eligibility requirements are met as specified below in the 
Eligibility Requirements section and subject to availability of funds, 
CCC will pay a per gallon incentive amount for JP-5 and F-76 blended 
biofuels produced from eligible feedstock.
    The BPI is administered by the Farm Service Agency (FSA); the FSA 
Administrator also serves as the Executive Vice-President of CCC.
    To date, the BPI has had limited use by claimants and minimal 
impact expanding or developing biofuel markets for agricultural 
commodities. As a result, through this NOFA, USDA is simplifying the 
use of CCC funds in the BPI. This simplification increases transparency 
by identifying a specific BPI payment rate. This allows claimants to 
quantify the BPI on a per gallon basis, thus making it easier for 
potential claimants to understand how the BPI funding process works 
when they consider submitting an offer to provide JP-5 and F-76 blended 
biofuels on DLA Energy domestic bulk fuel procurements.
    Those biofuel vendors that are awarded a contract by DLA Energy and 
deliver eligible blended F-76 or JP-5 biofuel, produced using an 
eligible feedstock, may submit a claim to receive a per gallon payment 
from FSA, subject to the availability of funds. As part of the pre-
award acquisition process, DLA Energy will confirm the supplier's 
biofuel delivery capability, including quality review of the fuel 
specification (including feedstock type), ability to produce designated 
blended biofuel, and the specified blend rate.
    The BPI payment rate will be 8.335 cents per gallon of F-76 or JP-5 
fuel that contains a minimum of 10 percent biofuel; the BPI payment 
rate will increase in a linear fashion; the amount of the increase is 
0.8335 cents for every 1 percent biofuel content above 10 percent, up 
to a maximum BPI payment rate of 25 cents, per gallon. Table 1 shows 
examples of how the BPI payment rate will be determined based on the 
blended rate of the biofuel. The payment rate will not be based on 
which eligible feedstock is used to produce the biofuel. The total BPI 
payment will be determined by multiplying the BPI payment rate by the 
number of gallons of qualifying biofuel blend delivered under a DLA 
Energy contract.

[[Page 95957]]



 Table 1--Example of BPI Determination Based on Blended Rate of Biofuel
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    For every 1% biofuel content above 10%, the BPI payment rate will
  increase 0.8335 cents, up to a maximum payment rate of 25 cents,  per
                    gallon, as shown in the examples:
-------------------------------------------------------------------------
                                                         Then the BPI
               If the blended rate is:                payment rate,  per
                                                       gallon,  will be:
------------------------------------------------------------------------
10%.................................................       8.3350 cents.
11%.................................................       9.1685 cents.
15%.................................................      12.5025 cents.
20%.................................................      16.6700 cents.
25%.................................................      20.8375 cents.
30% and up to a maximum as permitted by the MILSPEC.      25.0000 cents.
------------------------------------------------------------------------

    Up to $50 million is presently available for obligation through FY 
2018. USDA does not expect funding to be a constraint through FY 2018; 
however, should there be a demand in excess of $50 million, USDA would 
consider requesting additional funds be made available for BPI 
payments.

BPI Payment Eligibility Requirements

    For a claimant to be eligible to receive a BPI payment with CCC 
funds through this NOFA, all three of the following requirements must 
be satisfied:
    1. Delivery of a biofuel blend for use by the U.S. Navy that is 
contractually accepted by DLA Energy and produced in the United States 
from an eligible feedstock;
    2. Use of a U.S. produced eligible feedstock or feedstocks to 
produce the biofuel used in the blended product (see Table 2--Qualified 
Feedstocks below for the list of eligible and ineligible feedstocks); 
and
    3. Minimum of 10 percent blended biofuel to a maximum as permitted 
by the revision of MIL-DTL-16884 (F-76) or MIL-DTL-5624 (JP-5).

 Table 2--Qualified Feedstock or Feedstocks To Produce the Biofuel Used
                         in the Blended Product
------------------------------------------------------------------------
              Eligible                           Non-eligible
------------------------------------------------------------------------
Agricultural residues such as rice   Food waste.
 hulls, nut shells.
Algae or Algal oil.................  Municipal solid waste.
Animal waste and by-products of      Yard waste.
 animal waste including fats, oils
 greases (not recycled).
Annual cover crops or oil produced
 from these cover crops *.
Camelina or camelina oil...........
Canola or Rapeseed oil.............
Cellulosic Biomass from crop
 residues (that is, stover, wheat
 straw, rice straw, etc.).
Energy cane........................
Eucalyptus.........................
Hybrid Poplars.....................
Jatropha...........................
Mill residues or waste.............
Miscanthus.........................
Non-food grade corn oil............
Pennycress.........................
Shrub willows......................
Slash, pre-commercial thinnings,
 and tree residue, forest residues.
Sorghum or sorghum oil (non-food
 grade).
Sorghum, Biomass...................
Sorghum, Energy....................
Sunflower oil......................
Switchgrass........................
Other agricultural product approved
 by CCC.
------------------------------------------------------------------------
* Note: Cover crops must be approved by the FSA Administrator on a case-
  by-case basis. Generally, however, ``cover crop'' means crops,
  including grasses, legumes, and forbs, for seasonal cover and other
  conservation purposes. Cover crops are primarily used for erosion
  control, soil health improvement, and water quality improvement. The
  cover crop may be terminated by natural causes, such as frost, or
  intentionally terminated through chemical application, crimping,
  rolling, tillage, or cutting.

BPI Payment Claim Submission Requirements

    It is the claimant's responsibility to invoice DLA-Energy for the 
blended biofuel delivered under the contract to the U.S. Navy and to 
submit necessary documentation to FSA to receive a BPI payment. 
Claimant will submit documentation indicating amount of blended biofuel 
delivered to the U.S. Navy, the blend rate of that biofuel delivery, 
and the feedstock used to produce the biofuel blend, such as a signed 
DLA Energy Receiving Report with applicable attachments or other 
equivalent documentation. The claimant will provide the Energy 
Receiving Report or equivalent document with the information listed 
below to USDA for the CCC funded BPI payment. All of the following 
items will be included in the information provided by the claimant to 
USDA:
    1. The amount of the delivered blended biofuel, as the affirmed 
blended quantity of delivered blended biofuel, the delivery date, and 
the name and address of the claimant;
    2. The U.S. produced feedstock from which the biofuel was produced; 
and
    3. The blended rate.

[[Page 95958]]

Distribution of Funds

    Following receipt and review of the complete documentation 
submitted to USDA by the claimant, as described above in the BPI 
Payment Claim Submission Requirements section, and satisfaction of the 
requirements specified above in the BPI Payment Eligibility 
Requirements section, FSA will make payments directly to claimants of 
the BPI for qualified biofuel, subject to the availability of funds. In 
the event the claimant delivers fuel that is produced from an 
ineligible feedstock, or otherwise fails to comply with any eligibility 
requirement, the claimant will not receive a payment.
    The claimant will receive the earned total BPI payment from FSA 
following FSA's receipt of the information, as specified above.

Paperwork Reduction Act Requirements

    In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C. chapter 35), FSA is not required to submit the information 
collection request to OMB for approval because the information is 
expected to come from less than 10 biofuel companies, which does not 
meet the 10 or more entities requirement, and therefore, the PRA 
requirements do not apply.

Catalog of Federal Domestic Assistance

    The BPI payment is not required to be in the Catalog of Federal 
Domestic Assistance.

Environmental Review

    The environmental impacts of this NOFA have been considered in a 
manner consistent with the provisions of the National Environmental 
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and the FSA 
regulations for compliance with NEPA (7 CFR part 799). As previously 
stated, this program uses CCC funds in coordination with DLA Energy 
purchases. This NOFA initiates a relatively minor change in the 
application of the CCC funds; the general scope of the BPI modification 
for DLA Energy bulk fuel solicitations, as implemented previously, is 
unchanged.
    The purpose of the BPI is to provide an incentive to fuel providers 
for biofuel that is produced from a domestic feedstock approved by CCC. 
FSA's participation in the program and the minor, discretionary change 
to the program (that is, simplifying the program by providing a per 
gallon incentive that varies per blend) are administrative in nature. 
The discretionary aspects of the program (for example, solicitation 
acceptance and certification of delivery, etc.) were designed and are 
implemented by DLA Energy and are not proposed to be substantively 
changed. As such, the Categorical Exclusions in 7 CFR part 799.31 
apply, specifically 7 CFR 799.31(b)(6)(c) (that is, financial 
assistance to supplement income). No Extraordinary Circumstances (7 CFR 
799.33) exist. As such, FSA has determined that this NOFA does not 
constitute a major Federal action that would significantly affect the 
quality of the human environment, individually or cumulatively. 
Therefore, FSA will not prepare an environmental assessment or 
environmental impact statement for this action.

Val Dolcini,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2016-31582 Filed 12-28-16; 8:45 am]
 BILLING CODE 3410-05-P