The U.S. Department of Agriculture plans to award up to $100 million in competitive grants to expand the sale and use of renewable fuels, including biodiesel. Under the Higher Blends Infrastructure Incentive Program, USDA will award $14 million to expand the infrastructure for higher blends of biodiesel and $86 million for higher blends of ethanol in an effort to increase the sale and use of higher blend renewable fuels.
Grants will be for up to 50 percent of total eligible project costs, but not more than $5 million. Grant money can be used for (among other things) infrastructure projects at both retail outlets and terminal facilities. NATSO members may be interested in utilizing the grants to install, retrofit, or upgrade underground storage tank equipment and related equipment (piping, etc.) as well as fuel dispensers. This also includes heating oil distribution facilities.
The program aims to encourage a comprehensive approach to marketing higher blends by sharing the costs relating to building out biofuel-related infrastructure.
NATSO members interested in applying for a grant should consider the following:
The grant program is structured as a 50-50 cost share, covering half of a project’s costs up to $5 million.
The grant program aims to direct 40 percent of funds for “targeted assistance,” which would benefit those companies that have either 10 or fewer total stations and/or are located in New England or the Western States (not including the Midwest).
For existing stations: the program places a 25 percent cap on Underground Storage Tank (UST) expenses related to USTs that require upgraded and/or retrofitted and/or additional USTs. All required related UST equipment including piping, sumps, spill buckets, etc. are eligible for funding.
For new construction facilities: the funding of USTs is not allowed under this grant as USDA has determined that USTs would be required of any new fueling facility, regardless of whether higher blends will be dispensed at the facility. However, other required related equipment such as dispensers and other UST components that are compatible with higher blends of renewable fuel may be considered as eligible.
It’s important to note that all eligible costs must be incurred during the grant period and may not be used to cover expenses that have already been incurred – even if a project hasn’t begun. Companies may spend up to 10 percent of their matching funds toward marketing and consumer education (including signage). However, grant funds may not be used for those purposes.
If companies are interested in applying for this funding, NATSO members are encouraged to register within the System for Award Management (SAM) (https://sam.gov/SAM/ or call 866-705-5711) as soon as possible. Each company must also have a DUNS number, which can be obtained online (http://fedgov.dnb.com/webform) or by phone (866-705-5711).
NATSO members with questions on how to apply are encouraged to contact the Alternative Fuels Council.
NATSO members are advised that grant applicants may be required to share what may be considered proprietary information, such as E-10 sales volumes for the previous three years. Applicants should consider their willingness to share such information before applying for grant funds.
It should also be noted that funding is available for biodiesel blending at terminals, rather than exclusively at the retail level. This poses a significant concern for those retailers who have invested their own capital on store-level blending equipment as nearby terminals with blending infrastructure could eliminate the value of those investments. It would also result in consumers paying a higher price for biodiesel blends than if such infrastructure were located at retail outlets.
The online application system will be available at http://www.rd.usda.gov/HBIIP.
NATSO members with questions about how to apply should contact Ginger Laidlaw with the Alternative Fuels Council at email@example.com or https://www.natsoaltfuels.com/about.html.
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