FACTBOX: Highlights of biofuels in House, Senate farm bills

(Reuters) - The House and Senate farm bills would encourage development of cellulose as a feedstock for fuel ethanol.

The Senate bill offers more than $2.3 billion for renewable energy. The House bill spells out $3.2 billion in mandatory spending on renewable energy, according to the Congressional Budget Office.

Here are highlights of renewable energy provisions of the bill passed by the House in July and the bill awaiting debate in the Senate.

Senate bill

--$227 million for incentive payments to farmers to grow, harvest, transport and store biomass crops.

--$422 million in grants and loan guarantees for construction of ethanol plants using biomass crops and to convert plants now using corn.

--$425 million to help refiners buy feedstocks for "advanced biofuel production."

--$270 million in grants and loans to expand production and use of renewable energy; 15 percent of money reserved for projects that convert animal waste to energy.

--Create small producer credit for cellulosic ethanol of 67 cents per gallon. Cost $282 million through 2012.

--Extend small producer tax credit of 10 cents a gallon on up to 15 million gallons of ethanol from plants with capacity up to 60 million gallons a year for two years, to December 31, 2012. Estimated cost $57 million through 2012.

--Create small producer tax credit of 10 cents a gallon, from December 31, 2007, for plants that produce ethanol with processes that do not use a fossil-based resource. Cost $211 million through 2012.

--Extend production tax credits of $1 or 50 cents a gallon for biodiesel for two years, to December 31, 2010, and extend 10-cent a gallon small producer tax credit for 15 million gallons of fuel from plants with capacity of up to 60 million gallons a year for four years, to December 31, 2012. Cost $264 million through 2012.

--Extend $1 a gallon tax credit for biodiesel created by thermal depolymerization. Credit is capped at 60 million gallons per year of co-produced fuel. Cost $211 million through 2012.

Cost of the tax credits is offset by three steps:

--Reducing the 51-cent a gallon tax credit by 5 cent in the first calendar year after U.S. production tops 7.5 billion gallons. Raises $854 million through 2012.

--Extending for two years, until December 31, 2010, 57-cent a gallon tariff on imported ethanol. Raises $25 million through 2012.