Biden administration to spend $450 million on higher-blend biofuels

By Leah Douglas

WASHINGTON (Reuters) - The U.S. Department of Agriculture will spend $450 million to expand the production and availability of transportation fuels that are blended with higher volumes of biofuels, the agency said on Monday.

The Biden administration sees the expanded use of lower-emission biofuels as critical to decarbonizing the transportation sector.

The Environmental Protection Agency last week announced the highest-ever targets for a federal program that requires oil refiners to blend biofuels into the nation's fuel mix, though the targets were lower than the ethanol industry had expected.

"No administration has been more supportive of the biofuel industry than the Biden-Harris administration," Agriculture Secretary Tom Vilsack told reporters on a conference call.

The money, which comes from the Inflation Reduction Act, will go to the USDA's Higher Blends Infrastructure Incentive Program (HBIIP), a cost-share program for fuel facilities to build and retrofit infrastructure that supports biofuel blending and distribution.

The agency also announced the recipients of $25 million in grants from a previous HBIIP funding round.

Senators Tina Smith and Amy Klobuchar of Minnesota, a key biofuel state, joined Vilsack on the call and said the investment will create new jobs and increase national security.

"We don’t want to be dependent on other countries when it comes to energy," Klobuchar said.

Corn-derived ethanol, the most commonly used biofuel, can cut greenhouse gas emissions by as much as 52% over gasoline, according to the Renewable Fuels Association, a trade group.

Some academics and environmental groups have challenged that figure, arguing that biofuel use actually increases emissions due to the carbon released when farmers till land for crops.

(Reporting by Leah Douglas in Washington; Editing by Matthew Lewis)

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