USDA Plans $500 Million Investment in Domestic Biofuels as Part of Inflation Reduction Act

The Biden administration has allocated $500 million in Inflation Reduction Act funds to amplify the availability of domestic biofuels.

On June 26, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced the first round of funding for 59 infrastructure projects as well as an additional $450 million in grants.

“President Biden’s Inflation Reduction Act is a historic investment that will expand clean energy, lower costs for Americans, and build an economy that benefits working families and small businesses,” Vilsack commented in a statement. “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.”

A total of $50 million was made available in December 2022 through the Higher Blends Infrastructure Incentive Program (HBIIP). The first 59 awardees received a total of $25 million in funding. The application process for the additional $450 million in grants opens in July. Funds will be allocated on a $90-per-quarter basis. The efforts support infrastructure improvements to lower out-of-pocket costs for transportation fueling and distribution facilities to install and upgrade biofuel-related infrastructure such as pumps, dispensers and storage tanks, according to the USDA.

The HBIIP aims to increase high blends of of ethanol and biodiesel derived from U.S. agricultural products through sharing infrastructure support costs. Grants awarded cover up to 75 percent of $5 million of project costs for fuels greater than 10 percent ethanol and 5 percent biodiesel.

About $67 million is allocated for transportation fueling facilities, including fueling stations; convenience stores; larger retail stores that also sell fuel; and transportation, freight, rail and marine fleet facilities. Another $18 million is allocated for terminal operations, depots and midstream operations.

Five application windows for funding opportunities are available between July 1, 2023, and Sept. 30, 2024, and a sixth application window will be opened if funding has not been exhausted, according to the USDA.

More information is available at the  HBIIP webpage, the Federal Register or Grants.gov. A webinar scheduled for July 6 at 3:30 p.m. ET.

Source: USDA