Higher Blends Infrastructure Incentive Program

What is the Higher Blends Infrastructure Incentive Program?

The Higher Blends Infrastructure Incentive Program is a new program that will expand the availability of domestic ethanol and biodiesel by incentivizing the expansion of sales of renewable fuels.

The United States Department of Agriculture requests input from all interested parties on a Higher Blends Infrastructure Incentive Program (HBIIP). The Department is exploring options to expand domestic ethanol and biodiesel availability and is seeking information on opportunities to consider infrastructure projects to facilitate increased sales of higher biofuel blends (E15/B20 or higher.)

Comments submitted in response to the Federal Register Notice may be submitted online Via the Federal eRulmaking Portal.

Federal Register Notice & Comments RFI Press Release Subscribe to Updates

Contact Mark Brodziski (202) 690-4730 for more information.

Program Goals

The overall goal of HBIIP is to increase biodiesel fuel and ethanol sales and use. HBIIP is an incentive program intended to encourage a more comprehensive approach to marketing biodiesel fuel and higher levels of ethanol by incentivizing the installation of infrastructure for biodiesel fuel and higher blends of ethanol.

The Commodity Credit Corporation (CCC) is an agency and instrumentality of the United States within the Department of Agriculture and operates under the supervision of the Secretary of Agriculture. Among the activities that section 5 of the CCC Charter Act authorizes CCC to undertake are actions to:

  • Make available materials and facilities required in connection with the production and marketing of agricultural commodities (other than tobacco); and
  • Increase the domestic consumption of agricultural commodities (other than tobacco) by expanding or aiding in the expansion of domestic markets or by developing or aiding in the development of new and additional markets, marketing facilities, and uses for such commodities.

Background

U.S. farmers are producing record amounts of feedstocks for renewable fuels.  However, lower commodity prices, paired with this record production, have created uncertain times for U.S. feedstocks producers.  Biofuels, which contribute to energy security, reduce air pollution, and support rural economic development, are an important market for U.S. feedstock producers. Infrastructure constraints and other barriers currently limit the market for biofuels and thereby the commodities used to produce them, contributing to lower commodity prices.  In particular, the nation’s fueling infrastructure is not sufficiently flexible to accommodate large additional quantities of higher ethanol blends that could enable biofuels to fill a significantly greater portion of the nation’s fuel supply.  Most vehicle fueling pumps can deliver only one type of fuel – E10, which contains a maximum of 10 percent ethanol.  Fuels containing a higher percentage of ethanol are also available; the most prevalent of these fuels are those containing 15 percent ethanol (“E15”) and those containing more ethanol than gasoline (“E85” refers to blends between 51 percent and 83 percent ethanol).

These higher blend fuels are compatible with a significant portion of the nation’s vehicle fleet.  After extensive testing by the Department of Energy, in 2012 EPA approved E15 for use in vehicles for the 2001 and newer model years.  In May 2019, EPA finalized regulatory changes to allow gasoline blended with up to 15 percent ethanol (E15) to take advantage of the 1-psi Reid Vapor Pressure (RVP) waiver that had only applied to E10 during the summer months.  This action removed a key regulatory barrier to using gasoline blended with up to 15% ethanol (E15) during the summer driving season. 
 
Approximately 93 percent of the 263 million vehicles registered in the United States are able to use E15.  In addition, there are more than 22 million flex-fuel vehicles (FFVs) in the United States which are capable of utilizing ethanol blends up to E85.  Based on 2018 fuel consumption levels, these vehicles – vehicles for the 2001 and new model years, plus FFVs – together had the capacity to consume approximately 29 billion gallons of ethanol in the form of E15 and E85.  

Use of E15 in 2018 was limited by the small number of stations that offer E15: 1,826 of the estimated 153,000 vehicle fueling stations nationwide.  Similarly, only 3,617 stations offered E85 as of 2018 – approximately 2.4% percent of vehicle fueling stations nationwide.  

While the production and availability of higher-level ethanol blends is increasing and barriers to expansion are being removed, it is clear, that fueling infrastructure, remains constrained and limits the distribution of higher blends.