A Hand Up for Higher Blends

by Luke Geiver (Ethanol Producer Magazine) ... Access to higher-level ethanol blends at gas stations across the country is expanding thanks to federally funded infrastructure incentive programs along with state-based opportunities. In 2022, the USDA announced plans to provide $50 million in funding to transportation fueling and distribution facilities in an effort to lower the out-of-pocket costs retailers bear when installing and upgrading biofuel related pumps, dispensers and storage tanks. Since 2022, the amount of funding through the Higher Blends Infrastructure Incentive Program, or HBIIP, has increased significantly to $450 million in available grant funding.

The grants can cover up to 75 percent (capped at $5 million) of total project costs to help facilities convert to higher-blend fuels, according to the USDA. The fuels must also be greater than 10 percent for ethanol and 5% for biodiesel. The most recent round of funding totaled $90.3 million and helped 89 projects across 26 states. The grant money has made a difference in multiple ways in several states despite the U.S. EPA’s continued inaction on the long-term, permanent policy decision to allow for year-round E15 blends.

In April this year, the EPA once again issued an emergency waiver for E15 to be sold during the summer months. In two-thirds of the country, E15 can’t be sold at retail stations from June 1 through September 15. Certain states, including Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin, will be able to sell E15 year-round starting in 2025 due to a regulatory opt-out they participated in. Ethanol advocacy groups like the American Coalition for Ethanol continue to push policy makers to determine a permanent solution for year-round E15. Until then, the HBIIP program appears to be a bright spot in the higher-level ethanol blends story taking place from coast to coast.

Grant Money To California, Retailers In Other States
Of all the states receiving funding through HBIIP, California is by far the biggest recipient with 21 separate entities receiving grant money. The lowest grant awards went to three separate entities, each getting $29,125. White DJY Inc., for example, the owner of less than 10 fueling stations, is using the money to install one E85 dispenser and one ethanol fuel storage tank. The grant money, for that small project alone, is expected to increase the amount of ethanol sold by 92,630 gallons per year.

Power Petroleum Corp, another owner of 10 or fewer fueling stations, will use $29,125 in grant funding to install one E85 dispenser, boosting ethanol sales by an estimated 25,976 gallons there.

On the opposite end of the funding spectrum in California are grant recipients like Satnam Petroleum.

Additional states receiving grants to add higher-blend infrastructure capabilities include Georgia (1), Colorado (1), Missouri (3), Illinois (1), Minnesota (18), North Dakota (2), Nebraska (1), New Hampshire (1), Rhode Island (1), New York (2), South Dakota (1), Washington (2) and Wisconsin (1).

The Impact of HBIIP
Growth Energy, a leading voice of the U.S. biofuels industry, was responsible for helping write many of the applications to the program for fuel retailers servicing more than 300 stores.

The Renewable Fuels Association has also helped with grant writing assistance and application help for many fuel retailers. RFA Director of Market Development Cassie Mullen played a big part in helping members apply for HBIIP dollars.

Part of the HBIIP program and E15 mandate story that doesn’t always get told, however, is the cost and time associated with upgrading the fueling stations. The investment by the retailer allows the station to sell higher biofuel blends but does not always translate to more gallons of fuel sold overall. Combined with the interest rate trends and the downward trend in overall gallons sold, the return on investment can be hard to pencil out, he says. The other challenge is labor. The removal of existing infrastructure is intensive and disruptive to business.

State-Level Grants
Federal funding isn’t the only option for fuel retailers looking to upgrade to flex-fuel options. Through the Ethanol Blender Pump Grant in South Dakota, fuel retailers could apply for $25,000 for the first pump and $10,000 for subsequent pumps. Starting in January, the state will also provide a 5-cent rebate for every gallon of E15 sold in an effort to support local agriculture and incentivize the sale of higher ethanol blends.

In Missouri, fuel retailers can apply for grant amounts of up to $500,000 through the state’s Biofuel Infrastructure Incentive Program administered through the Missouri Department of Agriculture. Funding can go towards construction expenses, installations, upgrades or retrofits of fuel dispensers, storage tanks and other related equipment.

Indiana, Illinois, Kansas, Minnesota and other states have also offered blender pump incentive programs in the past.

The Nebraska Corn Board also has a Blender Pump Grant Program that launched in July. READ MORE

Excerpt from Minnesota Bio-Fuels Association: The US Department of Agriculture (USDA) has awarded $2.67 million in infrastructure grants to businesses in Minnesota to expand access to Unleaded 88 and E85.

In a statement on Oct 29, the USDA said the grants were part of $39 million in infrastructure grants that were awarded to businesses in 18 states to increase availability of domestic biofuels and to give Americans “cleaner, more affordable fuel options.”

In Minnesota, the grants will be used to expand access to Unleaded 88 and E85 in stations in Alexandria, Fisher, Hopkins and St Paul.

The $39 million in infrastructure grants awarded are part of the USDA’s $500 million Higher Blends Infrastructure Incentive Program (HBIIP).

The USDA said it was also making $200 million available for a Biobased Product Market Development and Access Grant program to support innovative biobased technologies and bridge the gap between pilot-scale demonstrations and commercial viability.