USDA Halts Loan Guarantees for Biodigesters and Controlled Environment Agriculture Projects
The USDA has enacted a 90-day freeze on loan guarantees for biodigesters and controlled environment agriculture projects due to high delinquency rates, with $102.6 million in biodigester loans and $135 million in CEA loans currently in default. This decision, prompted by concerns over project underperformance, has already led to cancellations and faced criticism for its broad application rather than case-by-case evaluations. Over the past three years, 219 new biogas facilities were established, reflecting a total investment of $2.7 billion.
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The USDA has imposed a 90-day freeze on loan guarantees for biodigester and controlled environment agriculture (CEA) projects due to high delinquency rates. The Rural Business-Cooperative Service reported that $102.6 million in loans for anaerobic biodigesters, representing 27% of total loans, and $135 million in CEA loans, accounting for 43% of total loans, are currently in delinquency.
Despite increased applications for these projects, the USDA identified elevated rates of project underperformance and operational failures. The American Biogas Council noted that the pause has already affected certain projects, leading to cancellations.
In the last three years, 219 new biogas facilities were established with a total investment of $2.7 billion. The decision has faced criticism, particularly concerning the broad nature of the pause impacting all projects rather than evaluating them individually.
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