USDA Announces $100 Million for American Biofuels Infrastructure

CHICAGO, May 12, 2020 – The U.S. Department of Agriculture (USDA) has announced the upcoming Higher Blends Infrastructure Incentive Program (HBIIP). The purpose of this program is to provide grant funds to encourage private investment and expand the availability of higher blends of ethanol, and biodiesel. Providing grant funds to cover a portion of the cost of installing high-blend fueling infrastructure and for building out distribution facilities will decrease out-of-pocket expenses and enable businesses and other public or private entities to invest in infrastructure to sell and/or dispense higher blends of ethanol and biodiesel.

Biofuels, like ethanol and biodiesel, that are produced locally decrease dependence on fossil fuel imports and reduce vehicle emissions. There are multiple constraints that place limitations on the utilization of large quantities of higher biofuel blends at the consumer level. Due to these ongoing limitations, most stations are only able to offer E10 (10% ethanol/90% gasoline) for gasoline users and up to B20 (20% biodiesel/80% diesel) for diesel users. By increasing consumer options with sustainable fuel selections, the program supports local biofuel producers, farmers and rural communities, while improving air quality and combating climate change.

The USDA plans to release $86 million for the implementation of higher blends of ethanol, and an estimated $14 million for further implementation of higher blends of biodiesel. Applications incorporating recommendations provided in the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity are encouraged to support the quality of life in rural communities. HBIIP funds are intended for distribution facilities, public and private fueling stations, retail convenience stores, fleet facilities, terminal operations, home heating oil distribution centers, and other similar amenities. The USDA is requiring one application per applicant for a one-year grant period but will allow proposed investments for multiple locations. Important items to note about the eligibility criteria have been pulled from the Notice of Funds Availability for the Higher Blends Infrastructure Incentive Program (HBIIP) for Fiscal Year 2020 and are outlined below. We will continue to update you with important information as the program details progress.

  1. Funding Restrictions: There is no minimum HBIIP grant award, and the maximum HBIIP grant award is not to exceed $5,000,000. HBIIP grants are awarded on a cost share basis for no more than 50 percent of the total eligible project costs. No HBIIP grant award may exceed the amount calculated as 50% of total eligible project costs or the maximum award amount of $5,000,000.
  2. Underground Storage Tanks and Systems (USTs): Fueling stations/locations/facilities constructed during the grant period are not allowed to receive HBIIP grant funds for underground storage tanks. Equipment such as fuel dispensers/pumps and other parts for underground storage tank systems that are available in traditional and higher blend compatible models may be considered for funding.
  3. Notice for Owners of Fewer Stations: A Targeted Assistance Goal is available for applicants owning the fewest number of transportation fueling stations/locations, but at least owning one. The Targeted Assistance is intended for applicants owning 10 fueling stations/locations or fewer. The USDA has established this assistance in order to distribute a portion of program funds across diverse geographic areas, and those located in underserved areas.
  4. Cost Sharing or Matching: The USDA has established a matching fund (cost-sharing) minimum requirement of $1 for every $1 in grant funds provided. Matching funds, in addition to grant funds, must equal total eligible project costs, and may be accepted in the form of cash or in-kind contributions. Matching funds can only be used for eligible project costs, including contributions exceeding the minimum amount required. The applicant is responsible for acquiring the remainder of total eligible project costs not covered by grant funds. In-kind contributions by the applicant cannot be used to meet matching fund requirements.

The USDA plans to hold a webinar focused on HBIIP orientation and enrollment on May 12, a webinar focused on HBIIP fueling station and fleet facility on May 19, and a webinar focused on HBIIP fuel distribution facilities on May 26. For more information and to register click here.

The American Lung Association was involved in the USDA HBIIP grant of 2016. It played a major role in helping to submit eligible applications for the state and individual station owners. We were able to help the state of Illinois receive over $12 million dollars in grant funding. The USDA will begin accepting applications on May 15th.

To view the full formal announcement released by the USDA, please click here. For program questions, please contact Senior Manager, Bailey Arnold via email or call (217) 241-9011. For technical questions regarding the grant, please contact Clean Air Specialists, Tara Brooks via email or call (217) 718-6698, or Shannon Haines via email or call (217) 718-6669.

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