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

By Lea Douglas

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

The Biden administration sees increased use of low-emission biofuels as key 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 country’s fuel mix, though the targets are lower than what the ethanol industry had expected.

“No administration has been more supportive of the biofuels industry than the Biden-Harris administration,” Agriculture Secretary Tom Vilsack said on a conference call.

The money, which comes from the Cut Inflation Act, will go to the USDA’s Higher Blend Infrastructure Incentive Program (HBIIP), a cost-sharing program for fuel facilities to build and upgrade infrastructure that supports the blending and distribution of biofuels.

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 biofuels state, joined Vilsack on the call and said the investment will create new jobs and strengthen national security.

“We don’t want to depend on other countries for energy,” Klobuchar said.

Corn-derived ethanol, the most commonly used biofuel, can reduce greenhouse gas emissions by up to 52% compared to gasoline, according to the Renewable Fuels Association, a trade group.

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

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

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