USDA to Make $100 Million Available for Biofuels Infrastructure

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May 05, 2020

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by Jake Rinehart (KEYC News) U.S. Secretary of Agriculture Sonny Perdue announced Monday the U.S. Department of Agriculture intends to make up to $100 million available in competitive grants for activities that are designed to expand the availability and sale of renewable fuels.

“America’s energy independence is critical to our economic security, and President [Donald] Trump fully recognizes the importance of our ethanol and biofuels industries and the positive impacts they deliver to consumers and farmers with an affordable, abundant, and clean burning fuel,” Perdue said. “American ethanol and biofuel producers have been affected by decreased energy demands due to the coronavirus, and these grants to expand their availability will help increase their use during our economic resurgence.”

The Higher Blends Infrastructure Incentive Program funds will be made directly available to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blends by using a cost-sharing strategy and/or offering sales incentives for the installation of fuel pumps, related equipment and infrastructure.

Visit the USDA’s website for additional information and to apply for HBIIP funding. READ MORE

Higher Blends Infrastructure Incentive Program (US Department of Agriculture)

Ag Policy Blog: USDA Announces Food Purchase Program and Biofuel Infrastructure Grants (DTN Progressive Farmer)

Ethanol industry able to get grants from USDA (Topeka Capital Journal)

USDA ANNOUNCES BIOFUELS INFRASTRUCTURE GRANTS (Brownfield Ag News)

USDA to award $100 million under biofuels infrastructure program (Ethanol Producer Magazine)

USDA Announces Funds for Biofuels Infrastructure (AgWired)

Bipartisan bill, USDA program lift ethanol backers' spirits (E&E News)

RFA Welcomes Details on USDA Infrastructure Grant Program (Renewable Fuels Association)

OPINION: Funds for higher ethanol blends in USDA’s HBIIP pocket (Ethanol Producer Magazine/American Coalition for Ethanol)

USDA Begins Accepting Applications for Higher Blends Infrastructure Incentive Program Grants Today (May 15, 2020) (U.S. Department of Agriculture)

USDA OFFERS INFRASTRUCTURE GRANTS FOR HIGHER BIOFUEL BLEND OPTIONS (Brownfield Ag News)

OPINION: USDA grant program aims to expand ethanol infrastructure (Ethanol Producer Magazine)

Excerpt from DTN Progressive Farmer: The Higher Blends Infrastructure Incentive Program consists of up to $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand the sales and use of ethanol and biodiesel fuels.

Grants for up to 50% of total eligible project costs, but not more than $5 million, are available to vehicle fueling facilities, including, but not limited to, local fueling stations/locations, convenience stores, hypermarket fueling stations, fleet facilities, fuel terminal operations, midstream partners and/or distribution facilities.

USDA plans to make available approximately $86 million for implementation activities related to higher blends of fuel ethanol, and approximately $14 million for implementation activities related to higher blends of biodiesel. Higher biofuel blends are fuels containing ethanol greater than 10% by volume and/or fuels containing biodiesel blends greater than five percent by volume.

American Coalition for Ethanol Senior Vice President and Market Development Director Ron Lamberty said, “ACE is gratified to see many policies we recommended to USDA to make the program more accessible to single store and small chain operators were included in the final program.”

“In particular, we appreciate the Targeted Assistance Goal (TAG) which makes approximately 40% of funds available specifically for applicants owning 10 fueling stations/locations or fewer. USDA is also offering applicants ‘consideration for geographical diversity and markets underserved by higher blends’ to help establish higher blend retail facilities in a broader geographic area, which ACE identified as critical to widespread E15 use in our recommendations to USDA." READ MORE

Excerpt from Ethanol Producer Magazine: We are routinely asked if there is really a market for these higher ethanol blends. Will you attract more customers? The answer for the thousands of stations that have made the leap is clear: Yes! Not only will some current customers make the switch to higher octane, lower-priced fuel, but new customers will appear. This statistic jumps tremendously if these products appear on the price sign, because adding these fuels also helps you stand out from the competition.

These markets are also growing each year. Last year, for the first time, E15 was approved for year-round use in conventional gasoline markets. The fuel is also legally approved for 95% of the vehicles on the roads today and that number is growing each year. In states that track E15 sales, sales were up and average of 35%. E85 has also seen a resurgence as low-carbon fuel standards drive demand in some areas, but it is also appearing in areas that have never seen the fuel before. For those Flex Fuel Vehicle (FFV) drivers, it is their first chance to use this alternative fuel.

Enter the HBIIP initiative. This new iteration of the Biofuels Infrastructure Partnership (BIP) Program, is available to all 50 states and U.S. territories. Grants can be as large as $5M. For those fuel retailers with 10 or less stations, 40% of this money is reserved for you. There are bonus points if you are in geographic areas underserved by these fuels, as well as for interstate corridors. There is something for everyone, but funds are limited and matching funds are required. The amount of required match varies, based on the equipment.

If the matching funds concern you, please remember that HBIIP is not the only funding source available. Last year, Congress renewed a federal tax credit for the installation of alternative fuels like E85. The Alternative Fuel Vehicle Refueling Property Credit allows fuel retailers that installed E85 to become eligible for a federal tax credit equal to 30% of the total spent to purchase and install qualified equipment, with a maximum credit of $30,000 per station.

Additionally, some states have other programs available for dispensers and/or tanks. READ MORE