Minnesota governor aims to increase bioincentive program funding

Minnesota Gov. Tim Walz on Jan. 24 delivered his proposed budget to the state legislature. One provision of the budget proposes to significantly increase funding for the state’s Bioincentive Program.

Minnesota’s Bioincentive Program aims to spur private investment in the production of advanced fuels, renewable chemicals and biomass thermal energy. According to budget documents, claims for incentive payments have greatly exceeded funds appropriated for payments. In FY 2022 claims were more than $7.5 million, exceeding the $4.5 million appropriation by more than $3 million.

Total 2022 claims under the program include $2.78 million for advanced biofuels, $4.18 million for renewable chemicals, and $873,046 for biomass thermal. Approximately $1.32 million claims for advanced biofuel went unpaid, along with $1.63 million claims for renewable chemicals and $397,185 in claims for biomass thermal.

Walz proposes to allocate an additional $2.5 million in annual funding for the program in fiscal years (FY) 2024 and 2025, increasing to $5 million annually for FY 2026 and FY 2027. Last year, the Minnesota legislature increased the annual appropriation for the program to $5.75 million.  According to the proposed budget, the proposed increase of $2.5 million per year (to total $8.25 million per year) will reduce, but not eliminate, future expected shortfalls.