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USDA to make up to U$800m in pandemic relief available to biofuel producers

US Department of Agriculture (USDA) Secretary Tom Vilsack has announced that USDA will make up to US$800 million available to support biofuel producers and infrastructure. The announcement includes US$700 million to provide economic relief to biofuel producers and restore renewable fuel markets affected by the coronavirus (COVID-19) pandemic.

US dollars
US Department of Agriculture (USDA) Secretary Tom Vilsack has announced that USDA will make up to US$800 million available to support biofuel producers and infrastructure.

According to a statement, the Biden-Harris Administration is “committed” to further growth of the biofuels industry, and the House-passed Build Back Better Act commits additional funding that will provide better market access for farmers and more affordable and cleaner fuels for consumers.

USDA will make the funds available through the new Biofuel Producer Program authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Additionally, in the coming months, the Department will make US$100 million available to increase significantly the sales and use of higher blends of bioethanol and biodiesel by expanding the infrastructure for renewable fuels derived from US agricultural products.

Under the leadership of President Biden and Vice President Harris, USDA is providing direct relief to the people of rural America who are still reeling from the economic impacts of the pandemic. As we continue to rebuild the nation’s economy, USDA is targeting resources and investments to improve the strength and resiliency of America’s sustainable fuel markets. The relief we’re announcing today will pave the way to economic recovery for America’s biofuel producers, stimulate a critical market for US farmers and ranchers and move the country closer to President Biden’s goal of net-zero carbon emissions by 2050, Secretary Tom Vilsack said.

Biofuel Producer Program

Through the Biofuel Producer Program, USDA will make up to US$700 million in direct payments available for biofuel producers who faced unexpected market losses due to the pandemic. USDA will announce the official application window for this program within the coming week.

By making payments to biofuels producers, the program will help agricultural producers maintain and create more viable markets for products that supply biofuel production, such as corn, soybeans, or biomass.

Payments will be based on the producer’s market loss volume in 2020, which is calculated by the amount of fuel produced in 2020 in comparison to 2019.

Grants for biofuels infrastructure

USDA intends to make up to US$100 million available in new funds for grants for biofuels infrastructure, such as blender pumps which ensure biofuels have greater availability in the retail market.

The funding will provide grants to refueling and distribution facilities for the cost of installation, retrofitting, or otherwise upgrading of infrastructure required at a location to ensure the environmentally safe availability of fuel containing bioethanol blends of E15 and greater or fuel containing biodiesel blends B20 and greater.

USDA will announce the official application window for grants within the coming months.

USDA’s announcement comes on the heels of the US Environmental Protection Agency (EPA) proposed package of actions setting biofuels volumes for years 2022, 2021, and 2020, and introducing regulatory changes intended to enhance the Renewable Fuels Standard (RFS) objectives.

In addition, EPA is asking for public comment on a proposed decision to deny petitions to exempt small refineries from RFS program requirements.

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