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

“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 said. “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.”

In December 2022, the USDA made $50 million available in the Inflation Reduction Act funding to expand the use and availability of higher-blend biofuels through the Higher Blends Infrastructure Incentive Program (HBIIP). Secretary Vilsack has announced the first awardees of 59 infrastructure projects that will receive a total of $25 million.

The USDA also announced that the Department will begin accepting applications for $450 million in grants through HBIIP in July. According to the USDA, 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:

• In Iowa, Kimmes Enterprises LLC will use a $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 gallons.
• In Minnesota, Farmers Cooperative Oil Company will use a $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.
• In New York, Carmel Terminals Inc. will use a $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.

In addition to the announcements, the EPA recently finalized the highest-ever biofuel production targets in history, with growth in cellulosic biofuel, biomass-based diesel, advanced biofuel and non-cellulosic advanced categories.

“This is a win for energy independence and for our rural economy, delivering stability and growth in this market for years to come,” wrote the UDSA in a statement.

The HBIIP seeks to increase the availability of higher blends of ethanol and biodiesel derived from U.S. agricultural products by sharing the costs to build and retrofit biofuel-related infrastructure. Grants cover up to 75% or $5 million of total project costs to help facilities convert to higher-blend fuels. The fuels must be greater than 10% for ethanol and greater than 5% for biodiesel.

The $450 million in new funds will be available quarterly starting July 1. Each quarter, $90 million will be available to support a variety of fueling operations:

• Approximately $67.5 million will be made available to transportation fueling facilities, including fueling stations, convenience stores and larger retail stores that also sell fuel as well as transportation, freight, rail and marine fleet facilities.
• Approximately $18 million will be available to fuel distribution facilities including terminal operations, depots and midstream operations.
• Up to $4.5 million will be made available to home heating oil distribution facilities.

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.