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USDA grant program to promote biofuel use

There's up to $100 million available for competitive grants for cost-sharing to support infrastructure investment

May 5, 2020

3 Min Read
MORE CHOICES: USDA has announced it's making up to $100 million available in a competitive grant program aimed at supporting higher blends of biofuels.Willie Vogt

The word "biofuel" may be contentious these days as controversy over coronavirus support, and a collapsing market are putting pressure on all sectors the renewable fuel market. This week USDA announced news it would make up to $100 million in competitive grants available for activities designed to expand availability and sale of renewable fuels.

In a statement announcing the grant, Secretary of Agriculture Sonny Perdue said that "America's energy independence is critical to our economic security, and President Trump fully recognizes the importants of our ethanol and biofuels industries."

He notes that the renewable fuels market has been hit by falling demand caused by shelter-in-place rules across the country. Those same rules have significantly crimped demand for all types of fuel. Adds Perdue: "These grants to expand [renewable fuel] availability will help their use during our economic resurgence."

Kurt Kovarik, vice president of federal affairs, National Biodiesel Board, notes that the program "will help the industry expand consumers' access to cleaner, better transportation and heating fuels in the future."

The Higher Blends Infrastructure Incentive Program includes $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand sales and use of ethanol and biodiesel. The funds can be made available to eligible groups to help transportation fueling and biodiesel distribution facilities convert to higher ethanol and biodiesel blends by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment and infrastructure.

More about the USDA program

The HBIIP program is intended to increase the sale and use of higher blends of ethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products. Grants for up to 50% of total eligible project costs, but not more than $5 million, are available.

Uses can include vehicle fueling facilities including, but not limited to, local fueling stations/locations, convenience stores, hypermarket fueling stations, fleet facilities, fuel terminal operations, midstream partners and/or distribution facilities.

In this release, USDA notes it is targeting about $86 million for implementation activities related to higher blends of fuel ethanol, and about $14 million for activities related to higher blends of biodiesel. Higher biofuel blends are fuels containing ethanol greater than 10% by volume and/or fuels containing biodiesel blends greater than 5% by volume. 

The grants will match up to 50% of eligible costs or $5 million, whichever is lower. USDA anticipates making about 150 awards and providing assistance to 1,500 locations with the available funds.

On the website for the HBIIP program, USDA notes that 93% of the 263 million vehicles registered in the United States are able to use E15, often called unleaded 88 at service stations. There are also more than 22 million flex-fuel vehicles in operation capable of using ethanol blends up to E85. The aim of this $100 million program is to facilitate implementation and investment in dispensers for these new higher-level fuel blends.

Source: USDA and the National Biodiesel Board. The source is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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