The biodiesel industry is successfully leveraging federal funds for a significant increase in providing low-carbon fuel to consumers. Through a series of grants, the Higher Blends Infrastructure Incentive Program (HBIIP) is aiding the build out of infrastructure to increase access to low carbon liquid fuels including biodiesel.
“The grants help us put more renewable fuels into the nation’s fuel pool,” said Paul Nazzaro, president at Nazzaro Group, LLC, who serves as Clean Fuels Alliance America Supply Chain Advisor.
The first round of grant funding is expected to increase biofuel sales by 1.2 billion gallons annually, of which biodiesel accounted for nearly 1 billion gallons, according to the United States Department of Agriculture (USDA). Applications are currently being accepted for a second funding round with a $100 million pot – each project requires a 50% match and is capped at $5 million.
“All recipients and prospective recipients are working towards installing the required assets – such as injectors, piping, tanks and electronic hardware – to accommodate the emerging demand for low-carbon liquid fuels, such as biodiesel,” Nazzaro said.
In particular, the home heating sector is benefiting from increased access to biodiesel. The northeastern U.S. relies on heating oil to heat homes and, in many cases, domestic water heaters. With regulatory entities setting carbon-neutral goals, homeowners have two main options for low-carbon energy: Install air source heat pumps or transition existing equipment to biodiesel blends, called Bioheat® fuel, which is a lower cost carbon reduction pathway.
“With the ever-increasing interest to reduce carbon emissions, biodiesel is an immediate solution that reduces lifecycle greenhouse gas emissions by more than 70% compared to petroleum. Reducing CO2 emissions now can avoid decades of associated warming, delivering more value than a similar or greater reduction made in the future,” said Kate Shenk, director of regulatory affairs for Clean Fuels Alliance America. She added that the biodiesel increase from the first funding round will reduce greenhouse gas emissions by 9.4 million metric tons per year.
Residents with heating oil systems can transition to biodiesel without any capital investment while switching to an air source heat pump can cost $16,900 for a 2000 square foot home – and for areas in the Northeast, such as Massachusetts, the costs could be higher. Transitioning to Bioheat® fuel can be optimized by the service technician during the annual tune-up and may be as simple as an adjustment to the air settings.
“We are able to say, ‘we can meet – and possibly exceed – the carbon-neutral goals while saving the homeowner money.’ It’s no cost to start using biodiesel in homes,” said Bobby Brown, owner of Broco Energy. He added that biodiesel burns significantly cleaner and is an exceptionally reliable fuel that will never be situational at peak demand.
To increase clean fuels access, there is infrastructure that companies must put in place, such as storage tanks, pumps, values and blending equipment. That is where the program comes into play. The HBIIP grants are helping companies meet the demand for cleaner burning energy by aiding them in making the necessary capital investments.
“For my business, the grant was able to produce more jobs and renewably power customers,” Brown said.
Broco Energy was able to add two biodiesel storage tanks, double the number of positions that offer blended biodiesel, and increase the pumps off the rail to accommodate more cars. Brown added that his company isn’t the only one expanding its low-carbon options, that it is an industry-wide initiative.
“The broader the infrastructure builds out, the more widely available Bioheat® fuel will become,” said Nazzaro.
“Continuing the Higher Blends Infrastructure Incentive Program will continue the investments required for biodiesel and its benefits to reach even more consumers and meet their demands for clean fuels,” Shenk said.
The program aims to expand the accessibility of higher blend biodiesel and ethanol by funding infrastructure projects. The current round of grant funding, which is accepting applications through Nov. 21, has $100 million available, with $75 million allocated to retailers and $25 million to distribution facilities. More information is available online at https://www.rd.usda.gov/hbiip.
This article was funded by the United Soybean Board and state checkoff organizations.