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USDA announces US$450M to boost biofuel availability

USDA announces US$450M to boost biofuel availability
US Secretary of Agriculture Thomas J. Vilsack (photo courtesy USDA).

The US Department of Agriculture (USDA) Secretary Tom Vilsack has announced that USDA plans to invest up to US$500 million from President Biden’s Inflation Reduction Act (IRA) to increase the availability of domestic biofuels and give Americans additional cleaner fuel options at the pump.

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In December 2022, USDA made available US$50 million in Inflation Reduction Act (IRA) funding to expand the use and availability of higher-blend biofuels through the Higher Blends Infrastructure Incentive Program (HBIIP).

HBIIP seeks to increase the availability of higher blends of ethanol and biodiesel derived from US agricultural products by sharing the costs to build and retrofit biofuel-related infrastructure.

Grants cover up to 75 percent or US$5 million of total project costs to help facilities convert to higher-blend fuels. The fuels must be greater than 10 percent for ethanol and greater than 5 percent for biodiesel.

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. 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, Secretary Vilsack said.

Secretary Vilsack announced the first awardees of 59 infrastructure projects that will receive a total of US$25 million.

In addition, USDA announced that in July the Department will begin accepting applications for US$450 million in grants through HBIIP.

These grants will continue to support the infrastructure needed to lower out-of-pocket costs for transportation fueling and distribution facilities to install and upgrade biofuel-related infrastructure such as pumps, dispensers, and storage tanks.

Among the awards Secretary Vilsack announced on June 26, 2023, were:

  • In Iowa (IA), Kimmes Enterprises LLC will use a US$510 500 grant to replace four E15 dispensers and four ethanol storage tanks at three fueling stations located in Carroll, Rockwell City, and Baxter. This project is expected to increase annual sales of ethanol by approximately 635 000 (US) gallons (≈ 2.4 million litres).
  • In Minnesota (MN), Farmers Cooperative Oil Company will use a US$623 500 grant to replace nine E85 dispensers, two B20 dispensers, two ethanol storage tanks, and two biodiesel storage tanks at a fueling station in Barnesville. The project is expected to increase annual sales of biofuels by nearly 122 000 gallons (≈ 462 000 litres).
  • In New York (NY), Carmel Terminals Inc. will use a US$1 million grant to install four 50 000-gallon B10 bioheat storage tanks, a 25 000-gallon B10 on-road biodiesel storage tank, and a B100 biodiesel storage tank at a fuel distribution facility in Carmel. The funds also will be used to install piping, circulation lines, a heating system for biodiesel flow control, electronics, and other equipment. This project is expected to increase annual sales of biodiesel by more than 16 million gallons (≈ 60.56 million litres).

Additional awards will be announced in the coming weeks. In addition to these announcements, the Environmental Protection Agency (EPA) recently finalized the highest-ever biofuel production targets in US history, with growth in cellulosic biofuel, biomass-based diesel, advanced biofuel, and non-cellulosic advanced categories.

According to USDA, this is a “win for energy independence and for our rural economy, delivering stability and growth in this market for years to come.”

The US$450 million in new funds for HBIIP will be available quarterly starting July 1, 2023. There will be five application windows for HBIIP between July 1, 2023, and September 30, 2024.

A sixth application window will be opened if funding has not been exhausted.

Each quarter, US$90 million will be available to support a variety of fueling operations:

Approximately US$67.5 million will be made available to transportation fueling facilities, including fueling stations; convenience stores; larger retail stores that also sell fuel; and transportation, freight, rail, and marine fleet facilities.

Approximately US$18 million will be available to fuel distribution facilities, including terminal operations, depots, and midstream operations.

Up to US$4.5 million will be made available to home heating oil distribution facilities.

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