Section 9003 Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Appendix B – Feasibility Study Outline - CFR Part 4279.261 (a) - (j)

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A. Executive Summary

    1. Introduction and a brief, general project overview

    2. Economic feasibility determination

    3. Market feasibility determination

    4. Technical feasibility determination

    5. Financial feasibility determination

    6. Management feasibility determination

    7. Recommendations for implementation

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B. Economic Feasibility

   1. Describe your feedstock. Include:

       a. Feedstock source management

       b. Estimates of feedstock volumes and costs

       c. Collection, pre-treatment, transportation, and storage

       d. Feedstock risks

   2. Verify that woody biomass feedstock from National Forest System or public lands will not be used for a higher- value product

   3. Describe the impact on similar biorefineries in the area in which the borrower proposes to locate the project, if applicable

   4. Describe the potential impact on existing manufacturing plants or other facilities that use similar feedstock if your proposed              production technology is adopted

   5. Provide projections of impact on resource conservation, public health, and the environment

   6. Include economic feasibility details about your project site such as a description of its size and suitability, proximity to utilities            and modes of transportation, storage options, and so on

   7. Confirm access to trained – or trainable – labor

   8. Describe the availability of infrastructure, including utilities, and transportation (road, rail, and so on) to the site

   9. Explain the overall economic impact of your project. Include direct and indirect jobs created or saved, additional markets                     created for agricultural and forestry products and agricultural waste material, and the potential for rural economic                               development

   10. Discuss the feasibility of – and any plans for – your project to work with producer associations or cooperatives. Include the               estimated amount of feedstock purchased annually from – or sold to – producer associations and cooperatives

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C. Market Feasibility

Include:

    1. Information on the sales organization and management

    2. An explanation of the nature and extent of the market, along with the market area

    3. Marketing plans for the sale of projected output-principal products and byproducts

    4. Extent of competition, including other similar facilities, in the market area

    5. Commitments from purchasers of off-take -principal products and secondary products, degree of commitment, duration or                 terms of off-take agreements, and the financial strength of counterparties

    6. Risks related to the industry, including

      a. Industry status

      b. Specific market risks

      c. Competitive threats and advantages

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D. Technical Feasibility

Demonstrate:

 

    1. Suitability of the selected site for the intended use

    2. Scale of development for which the process technology has been proven (for instance, pilot, demonstration, or semi-work                  scale facility). Provide evidence that the proposed technology is feasible and can succeed.

        NOTE: The proposed technology must meet the definition of “eligible technology” as described in 7 CFR 4279.202 (available at             this link: https://go.usa.gov/xJfpc).

    3. The degree of integration of all processes. A summary of any integrated demonstration unit test results also must be                             submitted.

    4. Specific volume produced from the technology of the process (expressed either as volume of feedstock processed in tons-per-            unit of time, or as product in gallons-per-unit of time)

    5. Identification and estimation of project operation and development costs, specifying the level of accuracy of the estimates,                  and the assumptions upon which they are based

    6. Detailed analysis of project costs, including:

         a. Project management, professional services, and resource assessments

         b. Project design and permitting

         c. Land agreements and site preparation

        d. Equipment requirements, along with system installation startup and shakedown

        e. Warranties, insurance, financing, and operation and maintenance costs

   7. Projected timeline describing borrower plans from the time of loan application through plant construction, commissioning,                and ramp-up

   8. Potential for commercial replication of the proposed system

   9. Risks related to:

        a. Biorefinery construction

        b. Production of the advanced biofuel and biobased product, including renewable chemical, if applicable

        c. Regulation and governmental action

        d. Design-related factors that can impact project success

        e. Technology scale-up risk

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E. Financial Feasibility

    1. Address the reliability of the financial projections and the assumptions upon which they are based. Include all sources and                  uses of project capital, private or public, and federal or non-federal funds. Provide detailed descriptions and analysis of                        projected balance sheets, income, expense, and cash flow statements covering the useful life of the project.

     2. Provide a detailed description of the degree to which the project’s financial feasibility is dependent upon:

          a. Investment incentives

          b. Productivity incentives

          c. Loans and grants

     3. Identify project authorities, renewable identification numbers (RINs) value, tax credits, other credits, and any subsidies that                 affect the project

     4. Address any constraints or limitations in the financial projections

     5. Describe the ability of the business to achieve the projected income and cash flow

     6. Assess the cost accounting system

     7. Confirm the availability of short-term credit or other means to meet seasonal business costs

     8. Verify the adequacy of raw materials and supplies

     9. Provide a sensitivity analysis, including feedstock and energy costs, along with product and byproduct prices

    10. Address risks related to the:

          a. Project

          b. Borrower financing plan

          c. Operational units

          d. Tax issues

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F. Management Feasibility

    1. Highlight borrower’s or management’s previous experience concerning:

         a. Production of advanced biofuel and biobased product, including renewable chemicals, as applicable

         b. Acquisition of feedstock

         c. Marketing and sale of off-take

         d. The receipt of federal financial assistance, including amount of funding, date received, purpose, and outcome

     2. Describe your management plan for the procurement of feedstock and labor, marketing of the off-take, and management                  succession.

     3. Address risks related to:

           a. The borrower as a company (for example, identify potential development stage risks regarding the structure of your                       management team or other personnel)

            b. Conflicts of interest

            c. Management strengths and weaknesses

       

G. Qualifications

       You must submit a resume or statement of qualifications of the application author and any contributors to the feasibility study.         Include the prior, applicable experience of all pertinent parties.

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