Ethanol Infrastructure Efforts Keep Expanding

By Robert White, RFA | October 07, 2021

Significantly increasing the use of low-carbon renewable fuels like ethanol follows along different tracks. Legislatively, for example, there’s the bipartisan Clean Fuels Vehicle Act of 2021, which would provide incentives for automakers to build more flex-fuel vehicles that can run on higher blends like E85. At the same time, there are efforts to build out infrastructure at retail fuel stations so that blends higher than E10 can be sold.

There’s good news on this front, with the U.S. Department of Agriculture in August announcing it is investing another $26 million to build infrastructure to expand the availability of E15 and other higher blends of renewable fuels. These grants could expand domestic demand by more than 800 million gallons annually across 23 states, the USDA estimates. RFA is proud to have assisted many retailers and marketers in identifying their equipment needs and preparing their grant applications for this program. There’s also the Alternative Fuel Infrastructure Tax Credit offered via the IRS, where you may be able to receive a tax credit of 30% of the cost, not to exceed $30,000, for installing infrastructure for E85 and other alternative fuels. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location.

Now nationally, biofuel infrastructure remains a part of the Build Back Better Act under consideration in Congress, thanks to Rep. Cindy Axne (D-IA) and other biofuels champions in Congress, who secured $1 billion in matching funding, to be spread over eight years. Other federal legislation offers similar programs, such as the Biofuel Infrastructure and Agricultural Product Market Expansion Act of 2021 in the Senate, which offers $1 billion over 10 years, and the Renewable Fuel Infrastructure Investment and Market Expansion Act of 2021 in both houses, which provides $500 million over five years.

At the same time, some states are moving forward with infrastructure programs of their own. Last month, the corn checkoff boards of Missouri, Kansas and Nebraska announced an effort to provide California fuel retailers up to $1.25 million over the next year to increase the availability of E85 in that state. Ethanol has been the single-greatest contributor to the success of that state’s low-carbon fuel standard; the use of ethanol under the LCFS has generated 26.9 million metric tons of GHG savings, 35% of the total, since implementation began—more than any other low-carbon fuel used in the state.

In Iowa, that state’s Renewable Fuels Infrastructure Program helps retailers convert equipment to allow the expanded use of renewable fuels, via grant incentives, and is credited with helping fund 335 E85 dispensers/blenders and 72 E15 projects, as well as scores of biodiesel projects. Last month, the Missouri Agricultural and Small Business Development Authority rolled out the $2 million Biofuel Infrastructure Incentive Program to increase the distribution and use of low-carbon renewable fuels in the state.

These are just a few examples. Bottom line: Retailers need to keep aware of the many infrastructure programs offered or being considered at both the state and national level. Involvement with trade associations like RFA at the national and state level can help you—as does building a strong, positive working relationship with elected leaders at your statehouse and on Capitol Hill. Matching funds can help move a project forward quickly—and RFA always stands ready to help fuel marketers build a better, smarter facility for today’s retail climate. In fact, if you avoid the higher blends of ethanol and need to replace your equipment in the near future, there is a very good chance it will cost you more to avoid them.

Robert White is vice president of industry relations for the Renewable Fuels Association.