USDA Offers Up to $500 Million in Biofuel Grants

(United Soybean Board)

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Agriculture Secretary Tom Vilsack announced that up to $500 million in federal funds are available to boost supplies of American-made biofuel while awarding $25 million to 59 biodiesel and ethanol infrastructure projects across the country.

“By expanding the availability of homegrown biofuels, we are strengthening our energy independence, creating new market opportunities and revenue streams for American producers, and bringing good-paying jobs and other economic benefits to rural and farm communities,” Vilsack said June 26.

The U.S. Department of Agriculture intends to allocate up to $500 million from President Joe Biden’s Inflation Reduction Act to increase domestic biofuels to have more greener fuel available for consumers.

The primary funding mechanism will be through the USDA’s Higher Blends Infrastructure Incentive Program (HBIIP) that funds rural projects to raise the output of ethanol and biodiesel derived from U.S. agricultural products.

Grants cover up to 75% or $5 million of total project costs to help facilities convert to higher-blend fuels. The fuels must be greater than 10% for ethanol and greater than 5% for biodiesel.

As of July 1, $450 million will be available, including $67.5 million for transportation fueling facilities (such as fueling stations and freight transportation facilities) and $18 million for fuel distribution facilities (terminal operations and depots). Five application periods are expected between July 1 and Sept. 30, 2024.

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Vilsack

Vilsack also mentioned half of the $50 million of HBIIP funds made available in December were awarded to 59 infrastructure projects, of which California captured the most projects (21 worth $7.7 million), followed by Minnesota’s 17 projects (awarded $8.6 million). Iowa came in third with eight projects receiving $2.1 million.

With its heavy push to decarbonize transportation emissions, California’s winning projects seek to make more ethanol available at fuel pumps. Of interest is that 81% of the total federal dollars awarded to California are earmarked to raise biodiesel supplies made and distributed in the state.

A $1.5 million grant to fuel distributor AltAir Paramount LLC will help increase the amount of biodiesel (by 10 million gallons) sold from Elk Grove, Calif., which borders Interstate 5 and State Route 99 south of Sacramento. The money will help pay to upgrade existing rail unloading rack spill protection, install new pumps and overhead piping, and improve existing tanks and track truck loading racks.

Another grant went to Denver-based fuel distributor Crimson Renewable Energy, which calls itself the West Coast’s largest biodiesel producer. A grant just over $399,521 was awarded to the company for its Bakersfield plant in California to create the infrastructure to expand biodiesel sales by 30.4 million gallons annually. Funds will help install a blending skid with two loading bays and an in-house blending system.

Part of a $520,248 grant to Amidi Petroleum Inc. will build and expand renewable fuel sales, such as replacing two B20 biodiesel dispensers and one biodiesel storage tank at a fueling station in Los Gatos in Santa Clara County.

California grants were also awarded to increase biodiesel production and sales in Carmichael, Fontana, San Jose and Snelling.

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U.S. Agriculture Secretary Tom Vilsack said expanding biofuel availability strengthens the country's energy independence and brings good-paying jobs to rural communities. (United Soybean Board)

Minnesota’s largest grant ($2.2 million) was awarded to Northern Fuel and Convenience Inc. to create infrastructure to expand the sales and use of biodiesel and ethanol. Some of the funds will go toward installing 17 B20 biodiesel dispensers and 13 biodiesel storage tanks at 10 fueling stations in the state.

Sizable grants were also made to spur biodiesel production in the Northeast. New Hampshire-based Sprague Operating Resources will receive $1.2 million to create infrastructure to expand biodiesel sold by 34 million gallons yearly. Funds will be used to retrofit two fuel storage tanks for biodiesel and add rack blending equipment in the Bronx in New York and at East Providence, R.I.

Also, fuel distributor Carmel Terminals Inc. of New York won a $1 million grant to make infrastructure improvements to raise biodiesel sales by 16 million gallons annually. It plans to commission a new system in New York.

Two travel plazas also received biofuel grants. One of the smaller awards ($259,853) was made to Wisconsin’s BP Kenosha Travel Plaza to make such improvements as installing two B20 biodiesel dispensers and one biodiesel storage tank. The goal is to increase the amount of biodiesel sold by 1 million gallons per year.

The Route 63 Travel Plaza Inc. in Chester, Iowa, was awarded $310,750 to replace 10 ethanol dispensers (for E15 and E85), one ethanol storage tank and one biodiesel storage tank. The refurbishments will lift its total annual biofuels sales by 73,311 gallons.

In Georgia, Down to Earth Energy LLC of Monroe received a $62,708 grant to replace a B20 biodiesel dispenser at one fueling location and install two others at another station to increase biodiesel sales by 21,960 gallons each year.