January 6, 2021
BY Robert White, vice president of industry relations, Renewable Fuels Association
Whether you are looking at installing new equipment, converting or retrofitting older equipment, or need to meet EMV compliance, introducing higher blends of ethanol might be a way to expand your fuel offerings while at the same time lowering the costs of your equipment needs. How is this possible? By taking advantage of two important incentives that are offered with the goal of supporting expanded availability for ethanol and other alternative fuels.
The U.S. Department of Agriculture is currently accepting applications for its Higher Blends Infrastructure Incentive Program (HBIIP). This $100 million program was announced in early 2020 and originally had an application window over the summer. It recently announced that approximately $22 million in unused funding is still available, and USDA is accepting applications until January 19. This funding is for fueling stations, convenience stores, hypermarket fueling stations, and fleet facilities to add higher ethanol blends like E15 and flex fuels like E85.
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Throughout the first phase of this grant program, RFA, with the support of the National Corn Growers Association, assisted over three dozen fuel retailers in submitting their applications and had a 100 percent success rate, with those who submitted applications receiving grant funds. Cumulatively, $52 million will be invested into installing higher ethanol blends across the country, including in states outside of the Corn Belt, thanks to RFA’s leadership on this infrastructure opportunity.
The cost-share grants provide up to 50 percent of total eligible project costs, not to exceed $3 million per applicant. The program will share the costs related to the upgrading of fuel dispensers (gas and diesel pumps), associated ancillary equipment, and other infrastructure necessary for a location to ensure the environmentally safe availability of fuel containing ethanol blends greater than 10 percent such as E15 and E85 or fuel containing biodiesel blends greater than 5 percent.
Need more incentive? Don’t forget about the federal tax credit that provides an income tax credit of 30 percent, up to $30,000, for each fueling station that installs equipment to offer E85, or other alternative fuels. This credit has been around for many years and while it technically expired on December 31, 2020, it was extended again when President Trump signed the Consolidated Appropriations Act into law on December 27. This tax credit can drastically offset the cost of offering E85, or simply offset the cost of already planned equipment purchases if E85 is included.
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Interested in the USDA grant opportunity? RFA is again ready to assist all those qualified to apply, and we have more support from the National Corn Growers Association. Please contact Cassie Mullen, RFA Director of Market Development, via email at cmullen@ethanolrfa.org, or by calling (832) 415-7882. Depending on where your stations are located, there might be other funding opportunities too. If you would like to learn more about the tax credit, you can find language here. Expect an update once the new law is published.
The U.S. Energy Information Administration maintained its forecast for 2025 and 2026 biodiesel, renewable diesel and sustainable aviation fuel (SAF) production in its latest Short-Term Energy Outlook, released July 8.
XCF Global Inc. on July 10 shared its strategic plan to invest close to $1 billion in developing a network of SAF production facilities, expanding its U.S. footprint, and advancing its international growth strategy.
U.S. fuel ethanol capacity fell slightly in April, while biodiesel and renewable diesel capacity held steady, according to data released by the U.S. EIA on June 30. Feedstock consumption was down when compared to the previous month.
XCF Global Inc. on July 8 provided a production update on its flagship New Rise Reno facility, underscoring that the plant has successfully produced SAF, renewable diesel, and renewable naphtha during its initial ramp-up.
The U.S. EPA on July 8 hosted virtual public hearing to gather input on the agency’s recently released proposed rule to set 2026 and 2027 RFS RVOs. Members of the biofuel industry were among those to offer testimony during the event.