The Agriculture Department is poised to pour nearly $20 billion into expanding climate-related farming practices and another $500 million into biofuel infrastructure, under a historic funding package the Democratic-controlled House cleared Friday to slash U.S. greenhouse gas emissions.
The bill, dubbed the Inflation Reduction Act, would provide $18 billion for four farm bill conservation programs, plus another $1.4 billion for the Natural Resources Conservation Service to provide technical assistance to farmers and measure the impact of farming practices on carbon emissions.
The bill also includes new extended incentives for biofuels, plus about $20 billion in funding for USDA forestry and energy programs, including the biofuel infrastructure funding. There also are new provisions to provide debt relief to financially “distressed” farmers and victims of discrimination in USDA lending programs, replacing a loan forgiveness program for minority farmers that was blocked by courts.
The House approved the bill on a strict party-line vote, 220-207, readying the measure for President Joe Biden’s signature.
“This package makes important investments in our oversubscribed farm bill conservation programs,” said House Agriculture Committee Chairman David Scott, D-Ga. “By expanding participation in these programs and providing increased technical assistance funding, farmers will more readily be able to employ proven conservation practices on their land, reduce greenhouse gas emissions, and sequester carbon.”
House Speaker Nancy Pelosi, D-Calif., called the legislation, devotes nearly $370 billion in funding to climate-related spending, mostly through tax incentives, "the most consequential action on climate in our nation's history."
A Princeton University analysis estimates the bill will close two-thirds of the remaining emissions gap between current policy and the Biden administration’s 2030 climate target of cutting emissions in half from their 2005 level. Put another way, emissions will be reduced by a billion tons to within 500 million tons of the 2030 target, the analysis estimates.
The House outcome was largely a foregone conclusion after Sen. Joe Manchin, D-W.Va., reached a deal last month with Senate Majority Leader Charles Schumer, D-N.Y., that stripped away much of Biden’s House-passed Build Back Better bill except for its climate funding and clean energy tax incentives, along with provisions that extend Affordable Care Act subsidies and allow Medicare to negotiate drug prices. Progressive Democrats in the House had little choice but to accept whatever bill could win Manchin's support in the 50-50 Senate, even if many of their spending priorities were cast aside.
Republicans trained much of their criticism on the bill’s tax enforcement provisions as well as the incentives for renewable power and electric vehicles.
Rep. Randy Feenstra, R-Iowa., said the bill would “supercharge the Democrats’ Green New Deal agenda without making our country energy -independent again.” Other Republicans said the bill would fund an army of new Internal Revenue Service agents to harass taxpayers.
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Another Iowa Republican, Ashley Hinson, said the bill would “Impose new regulations on our farmers,” although she didn’t explain how. The bill’s provisions for climate-smart agriculture are devoted to expanding programs that subsidize conservation practices.
Mocking the bill’s title, Rep. Buddy Carter, R-Ga., called the legislation the “inflation expansion act.”
Democrats on the House Agriculture Committee emphasized the climate-related provisions. Rep. Kim Schrier, D-Wash., said the bill would provide the “biggest investment in climate solutions that we have ever had.”
Rep. Angie Craig, D-Minn., said the legislation represented the “largest investment in clean energy in our nation’s history” and that the bill also would “invest in biofuels infrastructure for Minnesota’s family farmers.”
Biofuels groups largely welcomed the bill. It includes the $500 million for biofuels infrastructure and extends through 2024 the existing $1-a-gallon tax credit for biomass-based diesel. It also creates a temporary tax incentive for sustainable aviation fuel (SAF) and a new clean fuels credit set to take effect in 2025 to subsidize low-carbon biofuels.
Geoff Cooper, president and CEO of the Renewable Fuels Association, said the legislation "represents the most significant federal commitment to low-carbon biofuels since the Renewable Fuel Standard was expanded by Congress in 2007."
Brian Jennings, CEO of the American Coalition of Ethanol, said the "far-reaching legislation ... will provide half a billion dollars for E15 and E85 infrastructure, invest a whopping $18 billion to support climate-smart agriculture practices which help reduce the carbon intensity of ethanol, reward fuels like ethanol with a new clean fuel production tax credit based on carbon intensity, establish a new sustainable aviation fuel tax credit based on carbon intensity, and give a big boost to projects which capture and sequester carbon."
But trade groups representing truck stop operators and fueling stations, NATSO and SIGMA, issued a joint statement expressing their concerns about the new tax incentive for SAF. The groups fear the tax credit will increase competition for renewable diesel feedstocks.
“While it makes sense for fuel technologies to earn favorable tax treatment through tangible reductions in carbon emissions, this bill gives aviation fuel more favorable treatment without having to demonstrate improved environmental benefits,” the groups said.
Agriculture Secretary Tom Vilsack, who will go to Colorado next week to promote the bill, said in a statement that it "would provide significant support for farmers, ranchers, and forest landowners as they care for our precious land, adapt and mitigate to climate change and ensure America remains a food secure nation."
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