USDA Announces $ 800 Million Support for Biofuels
On December 7, USDA announced that the agency would 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 about six months after the first USDA announcement it would provide up to $ 700 million in COVID-19 assistance to biofuel producers under the Pandemic Grower Assistance initiative.
“Under the leadership of President Biden and Vice President Harris, the USDA is providing direct relief to people in rural America who are still reeling from the economic impacts of the pandemic,” the Secretary of State said. Agriculture Tom Vilsack. “As we continue to rebuild the nation’s economy, the USDA is targeting resources and investments to improve the strength and resilience of US sustainable fuel markets. The relief we are announcing today will pave the way for an economic recovery for U.S. biofuel producers, stimulate a vital market for U.S. farmers and ranchers, and move the country closer to President Biden’s goal of net zero emissions of carbon by 2050. ”
The USDA said the $ 700 million in pandemic relief would come in the form of direct payments through the Biofuel Producers Program to biofuel producers who have suffered unexpected market losses due to the pandemic. According to the agency, the program for biofuel producers will help agricultural producers maintain and create more viable markets for the products that fuel the production of biofuels, such as corn, soybeans and biomass. Payments will be based on the volume of the producer’s market losses in 2020, which is calculated by the amount of fuel produced in 2020 compared to 2019. The USDA has announced that it will announce the official application window for the program. biofuel producers in the coming week.
The $ 100 million infrastructure funding will go to new grants for biofuels infrastructure, including blending pumps, which the agency says will ensure greater availability of biofuels in the retail market. The funding will provide grants to fueling and distribution facilities for the costs of installing, modernizing or upgrading the infrastructure required at a location to supply ethanol blends of E15 and above and biodiesel blends. of B20 and more. A fund request window will be announced in the coming months, according to the USDA.
The Renewable Fuels Association thanked USDA for rolling out the COVID relief program 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 industry history,” said Geoff Cooper, president and Chief Executive Officer of the FRG. “At the height of the pandemic, more than half of our country’s ethanol capacity was unused. To date, many factories remain offline or operate at reduced production 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 back-up plan to help our industry recover, along with the additional infrastructure funding. “
The American Coalition for Ethanol has also spoken out in support of the USDA’s action. “As we seek a higher level of funding to offset the damage caused to ethanol producers by the unprecedented global pandemic, we thank USDA Secretary Vilsack for following and implementing a process that allows biofuel producers to receive help and support for biofuel infrastructure, ”said Ron Lamberty, senior vice president at ACE.
“These limited funds will not cover all of the economic losses suffered by ethanol producers from the pandemic, which strengthens our belief that the USDA should not allow a disproportionate amount of funds to go to large conglomerates in the United States. to the detriment of farmers and small producers of ethanol. and exacerbate consolidation in the industry.
“We look forward to educating our members on how to ask for help and help them begin the process to finally get the help they so badly need as they continue to recover from the disease. serious market disruption, ”Lamberty continued.
Growth Energy applauded USDA actions. “Biofuel producers have been among the hardest hit by COVID-19, which has forced more than half of the industry to go offline at the height of the pandemic,” said Emily Skor, CEO of Growth Energy. “Given the uncertainties that rural families still face, this is a welcome boost for those working to produce low-carbon biofuels, support clean energy jobs and achieve our country’s carbon reduction targets. We also greatly appreciate the USDA’s continued commitment to expand the fuel infrastructure that provides U.S. drivers with greater access to low-cost, low-carbon ethanol.