Sunny skies greeted U.S. Agriculture Secretary Sonny Perdue when he came to Iowa on Oct. 8 to announce the first round of grant recipients to receive funding from USDA’s new Higher Blends Infrastructure Incentive Program. The $22 million awarded in the initial round goes to retail gas stations in Iowa and 13 other states.
The HBIIP money will be used to install new storage tanks and fuel pumps to dispense higher blends of ethanol and biodiesel. “This cost-share money is being provided to retailers to upgrade fuel pumps so consumers can have improved access to higher blends of renewable fuel,” Perdue said. “A motorist should have the choice. I’m confident our wise consumers will choose a fuel product that’s cleaner-burning, higher octane, lower priced and benefits their neighbors.”
Perdue made the announcement at an ethanol plant in Mason City in the morning and then came to Des Moines that afternoon and held a media briefing at a Casey’s gas station in Ankeny. The HBIIP program, announced by USDA in May, will make up to $100 million of federal grant money available. More grants to retailers will be announced in coming weeks, he said.
Grants matched by local funds
The HBIIP grants can be used for infrastructure to provide blends of ethanol that are E15 and greater and biodiesel blends above 5%, such as B20. The federal grant money is being matched by private and state investments.
A year ago, the Trump administration changed the Environmental Protection Agency’s rules to allow year-round sales of E15 ethanol nationwide, but many gas stations across the U.S. still offer only the E10 blend. Some offer E85, a blend of 15% gasoline and 85% ethanol. In September, President Donald Trump announced that he had directed EPA to let stations use current E10 pumps to sell E15.
Of the $22 million announced in this first round of HBIIP grants, $9.3 million is going to companies based in Iowa.
“Iowa is the leading producer of ethanol and biodiesel,” Perdue said, as he stood in front of fuel pumps at the gas station in Ankeny. “Iowa is the nation’s leading corn-producing state and second-largest soybean producer. This grant program to increase use of ethanol and biodiesel will help farmers, the biofuels industry and local communities where ethanol and biodiesel production facilities are located. The renewable fuels industry provides jobs for Iowans across this state and for people across our nation.”
Help to recover lost demand
Among the Iowa companies receiving the grants is Ankeny-based Casey’s, which is getting a $4.9 million grant to replace 346 fuel dispensers at 70 gas stations across the Midwest. West Des Moines-based Kum & Go will use a $1.5 million grant to install 128 fuel dispensers at 17 gas stations in six states, including Iowa.
The grants resulted from more than a year of discussions among Midwest lawmakers and Iowa’s congressional delegation and the Trump administration. Biofuel supporters have worked with Congress and the administration to secure the biodiesel tax credit extension, have fought to get EPA to reject oil industry requests for Renewable Fuel Standard (RFS) waivers, and has sought to break down barriers to give consumers the option of higher blends of biofuels at the pump. The new federal grant program is viewed by the biofuels industry as offering a welcome ray of hope during a rough year for farmers, retailers and biofuel producers.
“The Higher Blend Infrastructure Incentive Program will help restore biofuel demand destroyed by EPA’s abuse of the RFS exemptions,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “We need to grow consumer demand for biofuels in this nation. We thank Iowa fuel retailers for stepping up to participate in this new program. The 15 Iowa fuel suppliers receiving the initial round of HBIIP infrastructure grants are leaders in bringing cleaner-burning, lower-cost fuel options to consumers.”
EPA needs to uphold RFS
Iowa Secretary of Ag Mike Naig said the new federal grant program is a win-win for Iowa’s economy, farmers, consumers and the environment. “A strong ethanol and biodiesel industry are critically important to our state.”
“Looking ahead, we’ll continue to fight at the state and federal level for Iowa’s biofuel community,” Naig said. “We need to keep pressing EPA Administrator Andrew Wheeler to reject the gap-year waiver exemptions that remain for the RFS, along with 33 additional exemptions covering 2019 and 2020. Partnering with Iowa farmers and ethanol producers, we’ll keep fighting to protect the integrity of the RFS and hold EPA to their commitment to blend at least 15 billion gallons of ethanol per year into the nation’s motor fuel supply.
“We’ll also keep advocating to streamline labeling requirements for higher ethanol blends. At the state level, we’ll continue to work with Gov. [Kim] Reynolds to improve Iowa’s investment in the state’s Renewable Fuels Infrastructure Program.”
Environmentally friendly fuels
The biodiesel industry is pursuing a vision for sustainable growth to more than 6 billion gallons produced per year by the end of this decade. “The cost-sharing grants USDA is beginning to announce will help us bring consumers the better, cleaner transportation and heating fuels they are looking for,” says Donnell Rehagen, CEO of the National Biodiesel Board.
The grants will provide the financial incentive needed for more fuel retailers to install pumps, tanks and equipment needed to handle higher blends of biofuels, says Grant Kimberley, executive director of the Iowa Biodiesel Board. “Infrastructure is the key to ensuring we can deliver low carbon fuels to the nation, and these grants will help take us to the next level to do that in Iowa and beyond. Biodiesel plants in Iowa produced 345 million gallons of biodiesel in 2019. Nearly half of the on-road diesel fuel gallons sold in Iowa now contain the B11 blend or higher.”
As the top biodiesel and ethanol producing state, Iowa sits at the heart of the energy transformation to low carbon fuels. “Our biodiesel producers and farmers stand ready to grow in providing the renewable fuel and this infrastructure effort will help,” Kimberley said.
Iowa Corn Growers Association President Carl Jardon agreed. “Further developing the infrastructure needed for higher blends of ethanol continues to be a priority of the Iowa and National Corn Growers Associations. The new federal cost-share grants will support more retailers offering E15 and E85 across the country. Increasing the availability of higher blends today also helps expand the retail infrastructure compatible with the future high-octane, midlevel ethanol blends.”