USDA offering another $100 million to expand biofuel infrastructure at estimated 1,000 retail stations.
While visiting Illinois on Tuesday, Secretary of Agriculture Tom Vilsack joined Sen. Tammy Duckworth, D-Ill., to announce USDA’s latest round of funding for the Higher Blends Infrastructure Incentive Program. USDA is accepting applications for $100 million in grants to increase the sale and use of biofuels derived from U.S. agricultural products.
Duckworth discussed the role of ethanol and biodiesel as part of an all-of-the-above energy approach. “We want to make our goals to bring down carbon levels in this country that we need everything. Ethanol and biodiesel are an incredibly important part of that. If you look at ethanol production, that is net carbon negative,” she says, adding that many plants in Illinois are capturing carbon and piping it under the capstone of limestone deep underground.
“And if you look at our farmers what they’re doing, it’s incredible,” she says, explaining that implementation of cover crops and actions to pull more carbon out of the air continues to make progress on the overall goals of reducing carbon.
When Vilsack was asked whether the Biden administration’s push to increase electric vehicles runs counter to the announcement made in funding for renewable fuels for gas-burning vehicles, he says both will play a role. “People are going to continue to keep their trucks and cars for an extended period of time. So, the future of this industry in terms of transportation from cars and trucks is still very, very valid.”
He also says people around the world will continue to use combustion engines for a lot longer than the United States. “I want us to lead the world in selling them good American-grown ethanol,” Vilsack says.
While at a visit to One Earth Energy in Gibson City, Illinois, Duckworth says, “We see the picture of what biofuels can do and this year I took two trips into Asia, and they’re really interested in gaining access to carbon neutral grown commodities (corn and soybean) and that is going to be a real advantage we have as we move forward. So, there is nothing better than American grown fuel and there’s nothing better than American grown feed. We are the fuel of the future, not just here but all over the world.”
HBIIP funds infrastructure expansion
HBIIP 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. USDA established HBIIP to increase availability of higher blends of ethanol, such as E15, and biodiesel, such as B20.
While visiting at a Casey’s location in LeRoy, Illinois, Vilsack says he believes the money will aid about 1,000 locations across the country increase the number of higher blend fuel pumps by 5,000 to allow consumers to make the decision on making a choice at the pump that has an impact on reducing greenhouse gas emissions as well as save money.
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% 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% for ethanol and greater than 5% for biodiesel.
Vilsack also says the application window of just 90 days will allow retailers to more quickly receive funds once approved. The grant period will remain open for 90 days, with USDA anticipating making awards 90 days after the application deadline. The grant period is not to exceed 36 months. Based on the USDA’s prior experience with this program, it expects to make approximately 200 awards, according to a statement from the Renewable Fuels Association.
Casey’s Vice President for Fuels Nathaniel Doddridge told reporters that the Midwest gas retailer plans to apply for the funds to retrofit existing gas stations, and any new locations coming online also will feature the capability to have higher blends available. It takes about 18 weeks to get the infrastructure to be able to replace and retrofit existing locations, Doddridge explains. He adds Casey’s offers higher ethanol blends at 400 of its 2,400 locations.
Renewable Fuels Association and USDA will host a joint introductory webinar about the program on August 31. RFA has had a 100% success rate in assisting retailers to apply for and receive grants under this program; since 2020, RFA-supported grants led to infrastructure projects by 35 companies, totaling $74 million and covering 260 retail operations spanning 21 states, RFA says.
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.
Building momentum for further investments
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.
The Inflation Reduction Act also 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.
Geoff Cooper, RFA CEO and president, says the $500 million on top of the recent commitments by USDA to increase blending infrastructure will continue “that momentum and movement toward more flexible and more modern infrastructure that’s capable of handling these higher-level blends.
“USDA’s previous investments in biofuels infrastructure yielded huge dividends for drivers this summer, as higher blends like E15 and E85 were the most affordable options at the pump,” Cooper says. “We greatly appreciate the vision and leadership shown by Secretary Vilsack, and we are pleased by the Biden administration’s recognition that ethanol and other renewable fuels are an important tool in the quest to achieve net-zero carbon emissions by 2050.”
Next Generation Fuels Act support
The visit comes soon after Duckworth joined as an original co-sponsor to the introduction of the Next Generation Fuels Act in the U.S. Senate. The bill establishes a new high octane, low carbon fuel standard beginning in 2026, which automobile manufacturers can use to improve fuel efficiency and reduce greenhouse gas emissions. In establishing a clean octane standard, the bill requires that sources of additional octane result in at least 40% fewer GHG emissions than unblended gasoline and sets new limits on toxic hydrocarbon aromatics.
The Next Generation Fuels Act allows near-term, cost-effective options, as opposed to EPA’s current path of eliminating the internal combustion engine and mandating electric vehicles.
