USDA To Provide $500 Million For Higher Blends Infrastructure

  • Monday, 26 June 2023 13:56

The United States Department of Agriculture (USDA) announced today it will be providing $500 million in funding to increase access to E15 and higher blends of ethanol and biodiesel in Minnesota and across the country.

“We thank the Biden Administration and Secretary Tom Vilsack for today’s announcement of significant new investment to expand market access for higher blends of ethanol in Minnesota and across the country. Minnesota has been a leader on adopting higher blends of ethanol - from offering E15 at a nation-leading 439 retail locations to having the nation’s highest ethanol blend rate at 12.58 percent. As a result, we know that investment in biofuel infrastructure has multiple benefits in that it drives commodity demand for farmers, lowers consumer energy costs at the pump, creates economic development in rural Minnesota, and improves air quality through decreased emissions.

“We also recognize that these critical investments would not have been possible without the work of those who led the legislative effort to include them in the Inflation Reduction Act. Many thanks are due to Senators Amy Klobuchar and Joni Ernst for introducing the bipartisan legislation that was the basis for today’s announcement. The fact of the matter is that this $500 million investment in biofuel infrastructure from USDA, combined with the $6.75 million in Minnesota Department of Agriculture funding this past legislative session, will help cleaner-burning, lower-cost biofuels reach more consumers and ensure that Minnesota’s ethanol industry can continue to play a larger role in our homegrown, low-carbon transportation future,” said Brian Werner, executive director of the Minnesota Bio-Fuels Association. 

In a statement, the USDA said $50 million in funding was made available in December 2020 while another $450 million will be made available from July 1 for its Higher Blends Infrastructure Incentive Program (HBIIP). Funding for the the program is sourced from the Inflation Reduction Act. 

The USDA said the grants cover up to 75 percent or $5 million of the total project’s cost to help facilities convert to higher-blend fuels. The fuels must be greater than 10 percent for ethanol and 5 percent for biodiesel.

For the initial $50 million, the USDA said it was awarding today $25 million for 59 infrastructure projects, of which 17 are in Minnesota. In total, $8.63 million in funding was awarded for higher blend projects in Minnesota. 

The USDA said the recipients of the remaining $25 million will be announced in the coming weeks.

As for the $450 million in new funds, the USDA said there will be five application windows between July 1 and Sept 30.