The US Department of Agriculture (USDA) has issued a final rule restructuring the Rural Energy for America Program (REAP), requiring eligible projects to be fully constructed and operational before an application for financial assistance can be submitted, Biodiesel Magazine reported.
REAP provides guaranteed loan financing and grants to agricultural producers and rural small businesses for renewable energy systems and energy-efficiency improvements.
Eligible renewable energy sources include biomass, anaerobic digesters and biogas, wind, solar, small hydropower, ocean energy, geothermal energy and hydrogen produced from eligible renewable sources.
The REAP programme was created through the consolidation of earlier rural energy initiatives under the 2008 Farm Bill. It was subsequently reauthorised and updated through the 2014 and 2018 Farm Bills.
According to the National Sustainable Agriculture Coalition, REAP provided more than $4.8 billion through over 19,000 grants and loan guarantees between 2014 and 2025. The funding supported more than $14.7 billion in rural development investment.
The programme has supported several biogas and biomass combined heat and power projects, along with energy-related improvements at ethanol plants, biodiesel facilities and wood pellet mills.
The latest rule follows a series of changes to the programme by the USDA in 2026.
In March, the department announced a halt to processing REAP grant applications while it reviewed and updated programme regulations to comply with Executive Order 14315, titled “Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Source.”
The executive order, signed by President Donald Trump in July 2025, directed the federal government to limit support for certain renewable energy sources, including wind and solar.
In April 2026, USDA also rescinded a notice of funding opportunity issued in October 2024 covering REAP funding for fiscal years 2025, 2026 and 2027. The department said applicants without a fully executed financial assistance agreement would have to reapply under the revised programme.
Separately, USDA introduced a 90-day pause in January 2026 on loan guarantee funding for biodigester projects under Rural Business Cooperative Service programmes, including REAP.
The department said the pause was intended to allow a comprehensive review of the existing biodigester project portfolio, including delinquency rates, project performance, operational sustainability and underwriting guidelines. The administrative pause was subsequently extended through the end of 2026.
