USDA announces $800 million in support for biofuels

By Erin Voegele | December 07, 2021

The USDA on Dec. 7 announced the agency will make up to $800 million available to support biofuel producers and infrastructure, including $700 million in pandemic relief and $100 million in infrastructure funding to support the use of higher blends of ethanol and biodiesel.

The announcement comes roughly six months after the USDA first announced it would provide up to $700 million in COVID-19 relief to biofuel producers as part of the Pandemic Assistance for Producers initiative.

“Under the leadership of President Biden and Vice President Harris, USDA is providing direct relief to the people of rural America who are still reeling from the economic impacts of the pandemic,” said Agriculture Secretary Tom Vilsack. “As we continue to rebuild the nation’s economy, USDA is targeting resources and investments to improve the strength and resiliency of America’s sustainable fuel markets. The relief we’re announcing today will pave the way to economic recovery for America’s biofuel producers, stimulate a critical market for U.S. farmers and ranchers and move the country closer to President Biden’s goal of net-zero carbon emissions by 2050.”

The USDA said the $700 million in pandemic relief will be in the form of direct payments through the Biofuel Producer Program to biofuel producers who faced unexpected market losses due to the pandemic. According to the agency, the Biofuel Producer Program will help agricultural producers maintain and create more viable markets for products that supply biofuel production, such as corn, soybeans and biomass. Payments will be based on the producer’s market loss volume in 2020, which is calculated by the amount of fuel produced in 2020 when compared to 2019. The USDA said it will announce the official application window for the Biofuel Producer Program within the coming week.

The $100 million in infrastructure funding will go to new grants for biofuels infrastructure, including blender pumps, which the agency said ensure biofuels have greater availability in the retail market. The funding will provide grants to refueling and distribution facilities for the cost of installation, retrofitting or otherwise upgrading infrastructure required at a location to supply ethanol blends of E15 and greater and biodiesel blends of B20 and greater. An application window for the funds will be announced within the coming months, according to the USDA.

The Renewable Fuels Association thanked the USDA for rolling out the COVID relief package and infrastructure funds. “Ethanol producers are still struggling to recover from COVID-related market losses after what has been the most difficult and trying time in the industry’s history,” said Geoff Cooper, president and CEO of the RFA. “At the peak of the pandemic, more than half of our nation’s ethanol capacity was idled. To this day, many plants remain offline or are operating at reduced output rates and the pandemic has cost the industry well over $5 billion in lost revenue. We are grateful to USDA Sec. Vilsack and the Biden administration for finalizing this relief package to help our industry recover, as well as the additional infrastructure funding.”

The American Coalition for Ethanol has also spoken out in support of the USDA’s action. “While we sought for a higher level of funding to offset the damage done to ethanol producers from the unprecedented global pandemic, we’re appreciative of USDA Secretary Vilsack for following through and delivering on a process for biofuel producers to receive assistance and for the additional support for biofuel infrastructure,” said Ron Lamberty, senior vice president at ACE.

“These limited funds will not cover the totality of economic loss suffered by ethanol producers from the pandemic, which reinforces our belief that USDA should not allow a disproportionate amount of funds to go to large conglomerates at the expense of farmer-owned and smaller ethanol producers and exacerbate consolidation in the industry.

“We look forward to informing our members about how to apply for assistance and helping them engage in the process to finally get some much-needed help as they continue to recover from the severe market disruption,” Lamberty continued.

Growth Energy applauded the USDA’s actions. “Biofuel producers were among the hardest hit by COVID-19, which forced over half the industry offline at the peak of the pandemic,” said Emily Skor, CEO of Growth Energy. “Given the uncertainties still confronting rural families, this is a welcome boost for those working to produce low-carbon biofuels, support clean energy jobs, and achieve our nation’s carbon reduction goals. We also greatly appreciate USDA’s continued commitment to expanding fuel infrastructure that offer American drivers greater access to lower cost, low carbon ethanol.” 

 

 

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