USDA Opens New Application Window for HBIIP DEADLINE November 21, 2022

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August 23, 2022

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by Erin Voegele (Ethanol Producer Magazine) The USDA is scheduled to open a new $100 million, 90-day application window for the Higher Blends Infrastructure Incentive Program on Aug. 23, according to a document published in the Federal Register on Aug. 22.

The HBIIP is a competitive grant program that aims to significantly increase the sales and use of higher blends of ethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products. Investments made under HBIIP aim to help transportation fueling and biodiesel distribution facilities convert to higher ethanol and biodiesel blends by sharing the costs related to the installation of fuel pumps, related equipment and infrastructure. Under the program, higher blends include ethanol blends of greater than 10 percent and biodiesel blends of greater than 5 percent.

Grants made under the program can cover up to 50 percent of total eligible project costs, up to $5 million. According to the notice, the USDA has set a targeted assistance goal that aims to make approximately 40 percent of funds available to applicants that own 10 or fewer fueling stations/locations. The USDA may also target applicants located in markets that are currently underserved by higher blends and give preference to first time applicants to the HBIIP program, according to the notice.

The USDA has already made three rounds of awards through the HBIIP. The agency awarded $22 million under the program to 40 recipients in 14 states in October 2020, $18.4 million to 23 recipients in 20 states in April 2021, and $26 million to support 34 projects located in 23 states in August 2021.

A full copy of the notice can be downloaded from the USDA website. READ MORE

Higher Blends Infrastructure Incentive Program (U.S. Department of Agriculture)

$100 Million Grant to Renewable Fuels Will Bring ‘New Wave of Growth’ (AgWeb)

Vilsack makes biofuels announcement in Illinois (Farm Progress)

USDA Rolls Out Next Phase of Higher-Blend Infrastructure Funding (Renewable Fuels Association)

Watch now: Vilsack, Duckworth announce funding to expand biofuel presence at gas pumps (Quad City Times; includes VIDEO)

Funding To Increase Availability of Clean Fuels Mirrors Axne Provision in Inflation Reduction Act (Office of Rep. Cindy Axne (IA-03) )

$100 Million Grant to Renewable Fuels Will Bring ‘New Wave of Growth’ (Scoop)

Growth Energy Welcomes $100 Million USDA Investment in Biofuel Infrastructure (Growth Energy)

USDA to Award $100 Million in Biofuel Grants -- Industry leaders offer insights into how the agency will score fuel retailers and terminal operators who apply. (NACS)

Ethanol groups applaud new round of USDA HBIIP funding (Ethanol Producer Magazine)

USDA offers fresh $100M for biofuels infrastructure (Agri-Pulse)

Vilsack in Illinois to Announce Major Biofuel Infrastructure Investments (American Ag Network)

Sen. Duckworth, USDA Secretary promote federal biofuel program (WCIA)

You’ve Got a Friend in Me: USDA makes $100M available for Biofuel Infrastructure Grants (Biofuels Digest)

Vilsack, Duckworth announce biofuel funding at Illinois gas station (Farm Week Now)

ACE Ready to Help Retailers With HBIIP (Energy.AgWired.com)

OPINION: Time for another higher blend infrastructure push (Ethanol Producer Magazine/Renewable Fuels Association)

FUEL RETAILERS, FARMERS TO BENEFIT FROM BIOFUELS INFRASTRUCTURE INVESTMENT (Brownfield Ag News)

USDA clarifies information on eligible applicants for HBIIP (Ethanol Producer Magazine)

Excerpt from NACS: Smaller retailers are at the forefront of the program. About 40% of the funds are intended for applicants owning 10 or fewer fueling stations. The goal is to exhaust this funding.

Another consideration focuses on geographical diversity and markets underserved by higher blends. This would generally be in states west of the Mississippi and throughout New England, though an applicant outside of those areas would not automatically be excluded.

“We harped on that when we went to the stakeholders meeting,” said Ron Lamberty, senior vice president for the American Coalition for Ethanol. “In order for E15 to be considered a ‘normal’ fuel—not an alternative fuel—it has to be everywhere.”

Volume potential is also a consideration so that the program generates the most bang for the government buck.

“They are saying we have got the money, but you need to demonstrate that you’re going to drive higher sales of E15,” said Mike O’Brien, vice president of market development for Growth Energy. “So, they’re going to look at the annual sales volume of existing sites for the last three years. They are going to look at the projected sales volume with new sites. And then, based on the data that we have on best practices, they’re going to start applying some of that criteria to the scoring system so they can project out how much more volume they will see out of the upgrades.”

He noted that one touchpoint will be the number of dispensers selling E15 relative to the total number of dispensers at a site. “If you put in one dispenser out of 12, you’re going to have a very low sales rate,” said O’Brien. “If you put 10 out of 12, it is much higher. So that is going to be something they’re going to look at.”

Interstate and highway locations are also going to be given advantages in the grant process to help promote cross-country availability.

Hurdles Ahead

While the new program is more thought out and diverse than the one that preceded it, industry leaders do find shortcomings.

“A gallon of E85 and a gallon of E15 are treated the same,” Lamberty said. “One of the things we would have liked to have seen is a preference given to the much higher blends, because that moves quite a bit more ethanol. But for right now, if we are going to get E15 selling at reasonable levels, there are going to have to be a lot of conversions.”

Cassie Mullen, director of market development for the Renewable Fuels Association, finds the process overly burdensome. “If I could turn back the hands of time, I would beg USDA to change the onboarding process for applicants,” she said. “A process like this is overwhelming in general, but add to that our new reality of living in a pandemic world and you have mass chaos. I personally wish the requirement of having a SAM CAGE code wasn’t a piece of the puzzle.”

The System for Award Management (SAM) is a web-enabled government registry to collect information on organizations applying for grants and contracts. The Commercial and Government Entity (CAGE) Code is a five-character ID that provides a standardized method of identifying a given legal entity for a pre-award survey.

“Obtaining one in normal circumstances can take two to three weeks—add to that a COVID19 landscape and all bets are off,” said Mullen. “I would have liked the advantage of more time—in all honesty time is what we need.”

Unlike ethanol with its focus on retail, the primary focus with biodiesel is on terminal upgrades. Roughly $14 million of the grant funding will go to transportation fueling facilities and fuel distribution facilities (including terminal operations, depots and midstream partners). This will be used to implement higher blends of biodiesel greater than 5% (B5), such as B20.

Application Process

The fund availability is not guaranteed—a retailer or terminal operator must apply through a defined grant process to be in the running. Grant proposal writing can be an involved and aggravating process, even for entities that regularly use grant funding to support their operations. It can seem overwhelmingly intimidating for those who have never applied for a government grant.

“Retailers regularly see incentive programs, such as those from their oil company,” Lamberty said. “This might be a bit difficult for them, like it was with the BIP program. That’s why we’re hiring somebody to help us give the proper guidance to people so they’re more likely to get the grant.”

As with ACE, the other trade groups that are directly focused on the downstream biofuels markets are undertaking a range of efforts (short of writing the grant proposals themselves) to support retailers and terminal operators in successfully working through the process.

“With the help of National Corn Growers Association, we have secured funding that will allow us to assist in grant writing costs, surveys, marketing etc. We have been assisting all over the country with grant writing, application particulars, details, etc.,” Mullen said. “We also have a longtime working relationship with USDA, along with an extensive history with securing grants for our industry.”

Mullen noted that beyond those efforts (including a webinar series that drew more than 200 participants), RFA has assisted state petroleum marketers’ associations, such as Ohio, in helping their respective members understand the process.

“According to the USDA, it will take 78 hours of work to put together a single application,” O’Brien said. “It’s a commitment, but it’s worth it. The larger the retailer, the more resources they are going to have. It is the smaller retailer that I think may have some struggles. We’re doing our best to advise them on the actual application process.”

Should a retailer who is not currently providing E15 consider supporting the product?

“Pioneers like QuikTrip, Casey’s, Kum and Go and many others have paved the way and have proven unequivocally that not only can you offer a higher octane, lower cost fuel, but you can do so while gaining market share without sacrificing margins,” said Mullen. She also noted that some of the upgrades might help those facing the overwhelming costs associated with EMV.

For all the potential irritation involved, retailers and terminal operators should strongly consider making the effort. While it is not guaranteed, if a company’s profile meets the general requirements it is a far safer bet than rolling the dice in Vegas.

Read the full story at Fuels Market News. READ MORE

Excerpt from Ethanol Producer Magazine: The USDA on Nov. 15 published a notice clarifying information regarding eligible applicants for the current funding cycle for its Higher Blends Infrastructure Incentive Program, which opened in August. Applications for this round of HBIIP funds are due Nov. 21.

According to the notice, the funding opportunity announcement (FOA) issued Aug. 23 omitted clarifying information regarding eligible applicants for the funding. The FOA is being updated to clarify that hybrid applications, or those including transportation fueling facility implementation activities and fuel distribution facilities implementation activities, are ineligible. The notice clarifies that applicants can only apply for one of the two applicant types and those successful applicants will only receive the funding associated with one applicant type.

A full copy of the Nov. 15 notice is available on the Federal Register website. READ MORE