USDA Makes Biofuels Push

Agency to offer grants for fueling equipment upgrades to sell ethanol blends and biodiesel
Photograph: Shutterstock

WASHINGTON — The U.S. Department of Agriculture (USDA) is offering up to $100 million in grants to support infrastructure upgrades for E15, biodiesel and other biofuels.

Operators of fueling and fuel distribution operations will be able to apply for grants through the Higher Blends Infrastructure Incentive Program (HBIIP), which defrays costs for installing, retrofitting and upgrading fuel storage, fuel dispensers and related equipment and infrastructure to sell ethanol and biodiesel. The USDA plans to publish more details, including eligibility requirements, application deadlines and how applications will be scored in the Federal Register this spring.

The HBIIP will provide cost-share grants and incentives for selling E15 and B20, the 20% biodiesel blend, or higher blends, at sites including gas stations, convenience stores, hypermarket fueling sites and fleet facilities, as well as fuel terminals that offer biodiesel. The HBIIP program follows the USDA’s Biofuels Infrastructure Partnership (BIP), which provided state and private entities with grants to expand the availability of E15 and E85.

The USDA said 93% of the 263 million registered vehicles can use E15, and that an additional 22 million flex-fuel vehicles can use higher ethanol blends up to E85, the 85% ethanol blend. Combined, these vehicles have the capacity to use about 29 billion gallons of ethanol from E15 and E85.

The agency cited 2018 figures showing that, at that time, only about 2.4% of the 153,000 fueling sites in the United States offered ethanol blends higher than E10. That included 1,826 sites that offered E15 and just more than 3,600 that sold E85. More recent figures from ethanol industry groups peg the current number of E15 sites at more than 2,000.

Fleet Requirements

In addition to the grants, USDA Secretary Sonny Perdue issued a memo that directs the agency to prioritize biofuel usage both in the types of vehicles it acquires for its fleet and the types of fuels they use. The USDA fleet includes 37,000 vehicles, of which it replaces about 3,000 each year.

This shift, which “will occur over time during the normal fleet renewal process,” includes buying flex-fuel vehicles or biodiesel-capable vehicles; using station locators and apps to find sites that offer E15, E85 and biodiesel; fuel up with E15 for any vehicles that are not flex-fuel vehicles; buy renewable diesel blends for diesel vehicles that cannot use B20; and source biofuel blends such as E15, E85 and B20 for agency-owned fueling sites.

Combined, these moves could increase the USDA fleet’s annual consumption of E15 by up to 9 million gallons, E85 by 10 million gallons and biodiesel and renewable diesel blends by up to 3 million gallons, the agency said.

“Both of these actions underscore USDA is putting our money where our mouth is when it comes to increased biofuels usage,” Perdue said in a statement. “Expanding nationwide infrastructure that offers biofuels and increasing the number of biofuel capable vehicles in our fleet will increase the use of environmentally friendly fuel with decreased emissions, driving demand for our farmers and improving the air we breathe.” 

The announcement builds on the Trump administration’s push to placate the ethanol industry and farm state legislators after a series of controversial waivers of biofuel blending requirements for refiners. Critics have argued these waivers, which are designed to assist small refineries in financial trouble, have been given out too freely.

In 2019, the Trump administration granted a waiver of summertime Reid vapor pressure requirements for E15, which effectively enabled fuel retailers to sell it year-round.

“We are grateful for USDA Secretary Sonny Perdue for this commitment to expanding infrastructure and access to higher blends of biofuels,” said Emily Skor, CEO of ethanol industry group Growth Energy.

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