The US Department of Agriculture (USDA) plans to invest up to $500 million from the Inflation Reduction Act to increase the availability of domestic biofuels. In December 2022, USDA made available $50 million in Inflation Reduction Act funding to expand the use and availability of higher-blend biofuels through the Higher Blends Infrastructure Incentive Program (HBIIP), created in 2020. (Earlier post.)
USDA Secretary Tom Vilsack has now announced the first awardees of 59 infrastructure projects that will receive a total of $25 million from that first tranche of funding. In addition, USDA announced today that in July the Department will begin accepting applications for $450 million in grants through HBIIP.
These grants will continue to support the infrastructure needed 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.
Among the awards Secretary Vilsack announced:
In Iowa, Kimmes Enterprises LLC will use a $510,500 grant to replace four E15 dispensers and four ethanol storage tanks at three fueling stations located in Carroll, Rockwell City and Baxter. This project is expected to increase annual sales of ethanol by approximately 635,000 gallons.
In Minnesota, Farmers Cooperative Oil Company will use a $623,500 grant to replace nine E85 dispensers, two B20 dispensers, two ethanol storage tanks and two biodiesel storage tanks at a fueling station in Barnesville. The project is expected to increase annual sales of biofuels by nearly 122,000 gallons.
In New York, Carmel Terminals Inc. will use a $1 million grant to install four 50,000-gallon B10 bioheat storage tanks, a 25,000-gallon B10 on-road biodiesel storage tank and a B100 biodiesel storage tank at a fuel distribution facility in Carmel. The funds also will be used to install piping, circulation lines, a heating system for biodiesel flow control, electronics and other equipment. This project is expected to increase annual sales of biodiesel by more than 16 million gallons.
Additional awards will be announced in the coming weeks.
Background: Higher Blends Infrastructure Incentive Program. HBIIP seeks to increase the availability of higher blends of ethanol and biodiesel derived from US agricultural products by sharing the costs to build and retrofit biofuel-related infrastructure.
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.
The $450 million in new funds will be available quarterly starting 1 July. Each quarter, $90 million will be available to support a variety of fueling operations:
Approximately $67.5 million will be made available to transportation fueling facilities, including fueling stations; convenience stores; larger retail stores that also sell fuel; and transportation, freight, rail and marine fleet facilities.
Approximately $18 million will be available to fuel distribution facilities, including terminal operations, depots and midstream operations.
Up to $4.5 million will be made available to home heating oil distribution facilities.
There will be five application windows for HBIIP between 1 July 2023, and 30 September 2024. A sixth application window will be opened if funding has not been exhausted.
