Farm Progress

USDA to invest heavily in biofuel infrastructure

Projects intended to increase domestic biofuel availability

Joshua Baethge, Policy editor

June 26, 2023

2 Min Read
Corn and fuel handle representing ethanol
Getty Images

Agriculture Secretary Tom Vilsack says USDA plans to invest up to $500 million in biofuel infrastructure projects. On Monday he released the first set of 59 projects intended to increase the availability of domestic biofuels. Funding for the initiative will come from the Inflation Reduction Act of 2022.

“President Biden’s Inflation Reduction Act is a historic investment that will expand clean energy, lower costs for Americans, and build an economy that benefits working families and small businesses,” Vilsack says. “By expanding the availability of homegrown biofuels, we are strengthening our energy independence, creating new market opportunities and revenue streams for American producers, and bringing good-paying jobs and other economic benefits to rural and farm communities.”

Last December USDA announced it was making $50 million available through its Higher Blends Infrastructure Incentive Program. The program’s goal is to increase higher blend ethanol availability by sharing costs to build and retrofit biofuel infrastructure. It awards grants to cover up to 75% or up to $5 million to help facilities convert to higher-blended fuels.

On Monday, Vilsack said USDA would be investing an additional $450 million in the program starting July 1. Between then and September 2024, the agency will make $90 million available each quarter to support different fueling operations. USDA plans to have at least five applications windows during that time.

Approximately $67.5 million of the quarterly allotment will be used for transportation fueling facilities like fueling stations and retail stores as well as freight, rail and marine fleet facilities.

Around $18 million will be allocated to fuel distribution facilities. Up for $4.5 million will be used for home heating oil distribution facilities.

USDA will host a July 6 webinar for interested applicants to learn more.

Included in the initial $25 million set of grants was $510,500 for Kimmes Enterprise in Iowa. That company will use its funds to replace four E15 dispensers and four ethanol storage tanks at fueling stations in Carroll, Rockwell City and Baxter. When complete, the upgrades are expected to increase annual ethanol sales by around 635,000 gallons.

New York’s Carmel Terminal will use its $1 million grant to install large storage tanks for B10 bioheat, B10 on-road diesel and B100 biodiesel. Together, these projects are expected increase annual biofuel sales by more than 16 million gallons.

Shortly after Vilsack’s announcement, American Coalition for Ethanol Chief Marketing Officer Ron Lamberty issued a statement thanking USDA for considering its feedback. He says ACE looks forward to seeing more details about the program and hopes more funds will be accessible to single-store and small chain retailers.

“Even something as simple as the multiple application periods announced today will help marketers who don’t have staff or time to gather information and fill out complicated grant applications,” Lamberty says. “In past rounds, if they weren’t sure they could complete the application by the due date, they couldn’t risk the time. Now they’ll know when another application opens and can plan accordingly.”

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About the Author(s)

Joshua Baethge

Policy editor, Farm Progress

Joshua Baethge covers a wide range of government issues affecting agriculture. Before joining Farm Progress, he spent 10 years as a news and feature reporter in Texas. During that time, he covered multiple state and local government entities, while also writing about real estate, nightlife, culture and whatever else was the news of the day.

Baethge earned his bachelor’s degree at the University of North Texas. In his free time, he enjoys going to concerts, discovering new restaurants, finding excuses to be outside and traveling as much as possible. He is based in the Dallas area where he lives with his wife and two kids.

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