Here’s How the U.S. Can Outcompete Its Competitors: Parts 1 and 2

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February 03, 2026

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by CJ Evans (Alternative Fuels & Chemicals Coalition/Federal Funding Services/Biofuels Digest) ... He (CJ Evans) has seen far too many projects fall by the wayside, not because they were flawed or not any good, but because they could not get additional grants and funding in a timely way and, thus, were unable to proceed. CJ discusses the impact this had had on U.S. innovation. He also offers a solution in Part 2 of this article that will greatly advance and accelerate U.S. innovation.

The United States has the capacity to be the global leader in virtually every field of technology and innovation.

It has an abundance of can-do, let’s-try-this visionaries and innovators. It is imbued with tremendous natural, financial, and human resources.

It also has large, untapped resources such as its abundance of biomass that can be converted into biofuels, critical chemicals, and consumer products (as documented in the Department of Energy’s 2023 “Billion Ton Report”), which includes agricultural residuals, forest debris, and urban and rural organic and woody wastes that are a nuisance, currently carry a cost for management and disposal, and can be a liability, such as increasing wildfire danger in the Nation’s forests.

Multiple companies, including many of the Alternative Fuels & Chemicals Coalition’s (AFCC’s) 110+ member companies, are pursuing grants and loan guarantees to finalize development of innovative fist-of-a-kind technologies and jumpstart operations to convert these wastes from liabilities into assets that provide additional sources of income for agriculture and forestry landowners and broaden the U.S. production of energy, fuels, chemicals, and consumer products.

The U.S. is still a global leader in this and other areas. But other nations such as China are catching up and even passing the U.S. in several areas.

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Here’s where U.S. global competitiveness currently stands:

According to multiple sources, including Washington, DC’s Innovation Technology & Innovation Foundation and U.S. News; New York City’s CEOWORLD Magazine and SG Analytics; the “2025 International Patent Activity Report;” the World Economic Forum; and the World Intellectual Property Organization’s “2025 Global Innovation Index:”

The U.S., the home of Silicon Valley and world-renowned universities, still dominates in artificial intelligence (AI), machine learning algorithms, biotechnology and pharmaceuticals, software, defense, space, and quantum computing.

But …

China leads the word in 5G/6G, electric vehicles, renewable energy, battery supply / energy storage, digital payments, high-speed rail, and advanced materials, and is rapidly closing in on U.S. dominance in AI, semiconductors, and chemicals,
Japan, home to the world’s largest science and technology cluster, leads in robots and automation,
Germany leads in manufacturing output and engineering and industrial vigor,
South Korea leads in consumer electronics, semiconductors, and telecommunications,
Israel, known as the “Startup Nation,” sits at the top of the cybersecurity industry and fintech.

China’s Ascendance

In recent years, China has rapidly climbed the ranks, leveraging its growing technological capabilities with substantial government investment in research and development.

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Currently, China is in the process of building 43 pilot scale biomanufacturing platforms by 2027, which “dwarfs any other program in the world to build scale-up facilities,” according to Dirk Van Der Kley of Australia who specializes in technology competition and innovation between the U.S. and China.

Der Kley points out that China’s rapid advances are due to “significant government financing and strategic polices to ensure that the country remains a global powerhouse focused on innovation.”

China is not only a manufacturing powerhouse – evidenced by a trade surplus that reached a record $1.2 trillion in 2025, with exports hitting $3.7 trillion against $2.58 trillion in imports – its investments in its universities and university research have made it a powerhouse in that area as well.

A January 15, 2026 New York Times article, “Chinese Universities Surge in Global Rankings as U.S. Schools Slip,”....

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What is not immediately apparent is that the initiatives that are proven, advance, and go into commercial operation can more than pay for their investments … and for the investments in initiatives that fail. The payoff may not occur until a decade later, but it pays off many times over in their capacity to create jobs, expand domestic manufacturing, bring economic growth to local communities, increase tax revenues, and contribute to global competitiveness.

Here are two examples:

One project that was awarded a $2 million grant by the U.S. Department of Energy (DOE) in early January 2025 has yet to receive its award.

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Here’s what this grant will enable: The grant will allow the company to optimize its technology so that it can move forward with building its first commercial facility, which will be done through an application that it has underway for a U.S. Department of Agriculture (USDA) loan guarantee.

The project’s first commercial facility, which the grant will help make possible, will contribute as much as $100 million to an economically depressed area in Louisiana during construction and $20 million per year thereafter (times 20 during its 20-year lifetime), according to an economic impact study by the Alternative Fuels & Chemicals Coalition.

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That is a 250x return on investment … and that’s for just one project. Once the first project is successful and, thus, derisked, private capital will be unleashed, building more and more facilities in other places in the nation, replicating its benefits over and over again.

The project was founded on a simple idea: that America’s agriculture waste can become one of its most valuable resources.

By using these wastes, it will create additional revenue for farmers, while producing synthetic aviation fuel and critical chemicals, including a chemical to be used by the Department of War as an energetic binder for missile and rocket fuel – which will secure a critical supply chain during contested logistics – thus contributing to national security.

This is a chance to demonstrate America First Innovation in biomanufacturing: utilizing local resources and local technology to produce critical fuels and chemicals for use by American industries.

This is an example of what just one DOE grant can do to propel the Nation forward.

Here’s a second example, from the U.S. Department of Agriculture (USDA):

The USDA’s Biobased Markets and Development Access Program (BDAP), created with $200 million in Commodity Credit Corporation funds, has awarded two $10 million grants and is listed as an open program on the USDA website for which “Applications will be accepted until funds are exhausted.”

Yet its funds are currently frozen, with further awards on hold.

Once the BDAP funds are made available, they will provide $10 million each to another 18 large, almost-ready-to-go domestic manufacturing projects to meet the final requirements of USDA’s Section 9003 Biorefinery, Renewable Chemical, and BioBased Productions Manufacturing Assistance Loan Guarantee Program.

The requirement stipulates that each project company must build and operate an Integrated Demonstration Unit (IDU) that replicates its proposed commercial facility in every way, but on a smaller scale. This requirement is key to derisking a new technology before it receives funding through the loan guarantee so it can be deployed.

It has proven, however, to be extremely difficult for companies applying for the loan guarantee to raise sufficient private capital to meet this requirement because they are first-of-a-kind (FOAK) projects. Hence, the reason for the BDAP grants.

These FOAK projects will launch emerging technologies into the marketplace and advance U.S. global leadership in energy, critical fuels and chemicals, and new materials.

Once these FOAK projects are functioning successfully and have been de-risked – which is the purpose of the grants and a critical key to successfully implementing the USDA Section 9003 program – additional private sector investments will be stimulated, thus “priming the pump” to replicate these projects throughout the Nation and multiply their benefits many times over.

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Advancing Innovations Is Also Important for National Defense

The bipartisan Senate National Security Commission on Emerging Biotechnology (NSCEB), which originated in the 2022 National Defense Authorization Act, is leading the charge in conducting a comprehensive review of the national security implications of emerging biotechnologies. It provided 43 recommendations to the U.S. Congress in its April 2025 report for maintaining American dominance in this area, including investing $15 billion over the next five years in advancing biotechnology.

In 2024, the Department of War (DoW) announced the Defense Industrial Base Consortium (DIBC) and the Distributed Bioindustrial Manufacturing Program (DBIMP), aiming to strengthen the U.S. defense industrial base and domestic supply chains.

The DBIMP identified five defense-critical areas: Fuel, Food, Fabrication, Fitness, and Firepower. DoW issued 34 awards for a combined value of over $60 million as part of Phase I of the program.

In 2025, DoW entered Phase II of the DBIMP, focused on providing follow-on funding awards of up to $100 million for each awardee to support construction of a bioindustrial manufacturing facility based in the United States (with up to a five-year performance period).

However, the program has not advanced and Phase II grants have not been awarded.

The question facing the U.S. is: How can it take advantage of its natural, financial, educational, and human resources to outcompete its competitors, outmaneuver its adversaries, and maximize the benefits that can be derived from its innovations?

See CJ’s answer in Part 2 here in The Digest: “Supercharging U.S. Innovation – How to Bring Technologies to Market Faster.”

READ MORE

Related articles

Here’s How the U.S. Can Outcompete its Competitors: Part 2 (Alternative Fuels & Chemicals Coalition/Federal Funding Services/Biofuels Digest)

Excerpt from Alternative Fuels & Chemicals Coalition/Federal Funding Services/Biofuels Digest: These initiatives need to be super charged so they can advance as quickly as possible so the U.S. can out-compete its competitors, out-maneuver its adversaries, and improve the well being of Americans.

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There are two ways in which this can be done:

FIRST: the funding for Science, Technology, Engineering and Mathematics (STEM) programs, university research, and advancing innovations through each of the nine Technology Readiness Levels (TRLs) needs to be INCREASED! This is vital to U.S. competitiveness, national security, expanding domestic manufacturing, creating high paying jobs, and growing the economies of America’s urban and rural communities.

SECOND, the U.S. needs to greatly expedite the way in which innovations can advance through each Technology Readiness Level (TRL) and enter the marketplace.It currently takes as much as 10 or 15 years for most innovations to advance through the various TRLs before they can be commercialized, and another 10 years or so for them to be widely deployed, adopted, and available in the marketplace.

Other countries, China in particular, are able to advance innovations and achieve a high degree of market penetration much more quickly. Here’s how the U.S. government can fast track this process:

Two Obstacles Slow the Advancement of Innovations

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1. Obtaining Development Capital

The major obstacle is the difficulty that innovators encounter in securing private sector development capital. Development capital is hard to raise during the early stages of technology development and in the final stage prior to full commercialization. It is, in fact, some of the hardest money to raise, requiring, as many innovators have said, “kissing a lot of frogs before one finds a prince.”

In the early stages, innovators typically reach out to friends and family to cobble a few dollars together to take their first few steps toward developing an innovation.

Then, when the money runs out (as it almost always does), they pause, and spend large amounts of time, energy, and attention reaching out to grant-making agencies and investors, cultivating relationships, sharing their vision, preparing pitch decks and financial models, and assembling applications – rather than spending this time, energy, and attention perfecting their innovations.

While the U.S. has a significant amount of venture capital and sources of private sector investment, these investments are heavily concentrated in the technology sectors like software, AI, biotech, fintech, and digital infrastructure or whatever may already be attracting capital due to media hype as the “hot new thing”. Also, post-development, existing businesses with revenue that have sufficiently proven and derisked their technologies have no trouble finding capital for market expansion.

But it is much harder to secure private capital for initiatives that are new, different, never-tried-before, and outside the areas mentioned above.

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2. Delays Between Grant/Funding Rounds

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The second obstacle is the amount of time it takes to move through the various stages of development – the nine Technology Readiness Levels (TRLs) – due to delays in obtaining additional funding. Government funding is currently structured such that one has to wait for a suitable funding opportunity to become available which may be issued only once every year or two.

Further, it takes time to prepare an application, wait to see if the application is successful, failing, and trying again, then again. Moreover, with the limited number of funding opportunities and a highly competitive atmosphere where 200 or 300 applicants are competing for four or five grant awards, a lot of worthwhile projects fall by the wayside.

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How to Advance Innovations More Quickly and Make America Great Again

Instead of requiring that innovators apply for small amounts of federal funding at each TRL, it would significantly shorten the time it takes new initiatives to advance – and it would make it much easier for innovators to attract development capital from private sources – if the funding for an innovation to advance through all the TRLs to reach market readiness was committed, on a conditional basis (conditional upon achieving all criteria at that TRL), as part of the first award that is received.

Applications for advancement through subsequent TRLs would be replaced with reports: quarterly progress reports while each TRL is underway, followed by a technical report at the end of each TRL on the milestones reached and the successes, the failures, the lessons learned from the failures, the fixes / proposed fixes to the failures, and a Statement of Project Objectives (SOPO), along with a budget, budget justification, and letters of commitment to meet the funding match for the next TRL.

This would allow subsequent grants to fit the needs and advance the initiative that is underway, rather than having to contort the initiative each step along the way to fit within the criteria of available funding opportunities.

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This would require the U.S. Congress to commit funds in its annual appropriations to continue funding for funded projects for up to 10 years.

Each year’s appropriation for financial awards could, for example, be split 50/50 with 50 percent of the funds dedicated to advancing projects that already are in the TRL advancement pipeline and 50 percent of the funds made available for new projects.

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As a second budget alteration to advance innovations more quickly, Congress could mandate that 5%, 10% or even 25% of the federal tax revenues earned by projects that have received federal funding and have been successfully deployed, would go into a fund for subsequent grants to other new innovations.

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This, in a very significant way, would help Make America Great Again. READ MORE

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