Ethanol groups suggest improvements for HBIIP program

By Erin Voegele | November 29, 2022

Representatives of the ethanol industry filed public comments with the USDA ahead of a Nov. 28 deadline highlighting ways the agency can maximize the impact of $500 million in biofuel infrastructure funding appropriated by the Inflation Reduction Act.

Section 22003 of the IRA, signed by President Joe Biden in August, appropriates $500 million to support the development of biofuel infrastructure, including infrastructure improvements for blending, storing, supplying or distributing biofuels; installing, retrofitting or upgrading fuel dispensers to supply higher blends of biofuels; and for building and retrofitting home heating oil distribution centers to supply biofuels.

The USDA in late October opened a 30-day public comment period and scheduled a listening session to provide an opportunity for stakeholders and other interested parties to offer comments and input on the use of those funds. The American Coalition for Ethanol, Growth Energy and the Renewable Fuels Association are among the groups that submitted comments to the agency.

In his comments, ACE Chief Marketing Officer Ron Lamberty focused on how the USDA can ensure the funds are more accessible to small retail marketers and incentivize conversions beyond those directly funded. He also discussed how progress can be measured to meet greenhouse gas (GHG) reduction goals when expanding infrastructure for renewable, clean biofuels.

Previous Higher Blend Infrastructure Incentive Program grants have been awarded mainly to large retailers. Lamberty points out while those chains have added hundreds of E15 locations, they own and operate nearly 10,000 stations, and appear to be converting only locations for which they’ve received grants. Lamberty says small retailers are not following the big chains’ example because they are used to seeing large retailers offering products they don’t offer and often assume competitors have those products because they’re better funded. “To the contrary, when small retailers get funds and build or convert sites to become the first in their market to offer higher blends, the new fuels become part of the station’s identity, and historically, the larger chains add the same fuels to regain market share, using their own money,” Lamberty said.

In its comments, Growth Energy urged the USDA to release the full $500 million in funding as soon as possible; prioritize projects focused on higher ethanol blends; remove the $5 million per project funding cap; streamline the environmental review process, and work with the U.S. EPA to clarify lingering regulatory uncertainties on the year-round sale of E15.

“Our industry is poised to work with you and the administration to help achieve the ambitious climate goals sought by the enactment of the IRA,” said Growth Energy in its comment. “To that end, we look forward to working with you on the implementation of the new law including section 22003 that provides $500M in funding for biofuels infrastructure.”

In its comments, the RFA is urging the USDA to lengthen the application window for the HBIIP program from 90 days to 6 months. “With the current application timeframe, applicants begin at a time disadvantage because promotion of the program cannot commence until the application window opens,” the RFA said in its comments. “This leaves even less time to apply because interested parties often do not learn about grant availability until weeks into the application period.” The RFA is also calling on the USDA to raise the per-entity funding cap so that larger chains with many stations can take full advantage of the expanded funding; engage with the EPA and White House to promote opportunities for flex fuel vehicle (FFV) growth; expand the HBIIP program to include infrastructure for sustainable aviation fuel (SAF); and streamline the environmental review process.