USDA begins accepting applications for $100 million in biofuel infrastructure grants

Ag Secretary Tom Vilsack announced Aug. 23 that USDA is accepting applications for $100 million in grants to increase the sale and use of biofuels derived from U.S. agricultural products.

USDA is making the funding available through the Higher Blends Infrastructure Incentive Program. This program seeks to market higher blends of ethanol and biodiesel by sharing the costs to build and retrofit biofuel-related infrastructure such as pumps, dispensers and storage tanks.

Vilsack said the Biden administration “recognizes that rural America is the key to reducing our reliance on fossil fuels and giving Americans cleaner, more affordable options at the pump. Biofuels are homegrown fuels. Expanding the availability of higher-blend fuels is a win for American farmers, the rural economy and hardworking Americans who pay the price here at home when we depend on volatile fuel sources overseas.”

This additional funding follows an April investment of $5.6 million through HBIIP that is expected to increase the availability of biofuels by 59.5 million gallons per year in California, Delaware, Illinois, Maryland, New Jersey, New York and South Dakota.

In June, USDA also announced that it had provided $700 million in relief funding to more than 100 biofuel producers in 25 states who experienced market losses due to the pandemic.

“These investments reflect the goals of President Biden’s Inflation Reduction Act, which addresses immediate economic needs and includes the largest ever federal investment in clean energy for the future,” USDA stated. “The law includes another $500 million aimed at increasing the sale and use of agricultural commodity-based fuels. This funding will allow USDA to provide additional grants for infrastructure improvements related to blending, storing, supplying and distributing biofuels.”

The department further stated that biofuels are an important part of the Biden administration’s “commitment to lowering gas prices for the American people.”

Under HBIIP, USDA provides grants to transportation fueling and distribution facilities. These grants lower the out-of-pocket costs for businesses to install and upgrade infrastructure and related equipment.

The $100 million available now will support a variety of fueling operations, including filling stations, convenience stores and larger retail stores that also sell fuel. The funds will also support fleet facilities including rail and marine, and fuel-distribution facilities, such as fuel-terminal operations, midstream operations, distribution facilities as well as home heating oil distribution centers.

The grants will cover up to 50 percent of total eligible project costs—but not more than $5 million—to help owners of transportation-fueling and fuel-distribution facilities convert to higher blends of ethanol and biodiesel. These higher-blend fuels must be greater than 10 percent for ethanol and greater than 5 percent for biodiesel.

Applications must be submitted by 4:30 p.m. Eastern time Nov. 21. Visit the HBIIP webpage to learn more, sign up for webinars and apply.

Additional information also is available on Grants.gov or page 51641 of the Aug. 23, 2022, Federal Register.

USDA stated it is offering “priority points to projects that advance key priorities” of this administration “to help communities recover from the COVID-19 pandemic, advance equity and combat climate change. These extra points will increase the likelihood of funding for projects that will advance these key priorities for people living in rural America.”