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U.S. Funding $62M to Biofuels Industry

July 3, 2012

The U.S. Department of Agriculture (USDA), Navy and Department of Energy are announcing $30 million in federal funding to match private investments in commercial-scale advanced drop-in biofuels. The Energy Department is also announcing a total of $32 million in new investments for earlier stage research that will continue to drive technological breakthroughs and additional cost reductions in the industry.

As part of President Obama’s Blueprint for a Secure Energy Future, he directed the Navy, USDA and DOE to collaborate to support commercialization of “drop-in” biofuel substitutes for diesel and jet fuel. Competitively priced drop-in biofuels, he said, will help improve America’s energy security, meeting the fuel needs of U.S. armed forces, as well as the commercial aviation and shipping sectors. The recent announcement of an available $30 million in funding promotes speeding the development of biofuels for military and commercial transportation. The Funding Opportunity Announcement (FOA) is available.

This funding opportunity is made possible through the Defense Production Act (DPA), an authority that dates back to 1950 and has been used to boost industries such as steel, aluminum, titanium, semiconductors, beryllium, and radiation-hardened electronics.

“…through this DPA effort the nation will be able to harvest an aviation biofuels industry to satisfy the world’s needs, not just our U.S. military.” — USDA Secretary Tom Vilsack

The new funding comprises a two-phased approach, with government and industry sharing in the cost. In Phase 1, applicants will submit a design package and comprehensive business plan for a commercial-scale biorefinery, identify and secure project sites and take additional required steps spelled out in the announcement. Awardees selected to continue into Phase 2 will submit additional information for the construction or retrofit of a biorefinery.

Agencies participating in this initiative will make additional funding requests to Congress to support the initiative, including President Obama’s FY 2013 budget request of $110 million.

“This is an important time for the biofuels industry to step up and show the Department of the Navy how they have developed biofuels that are certified and certifiable for military use,” said USDA Secretary Tom Vilsack. “The ability for U.S. industry to make, create and innovate has never been more important to our national and energy security. I know that through this DPA effort the nation will be able to harvest an aviation biofuels industry to satisfy the world’s needs, not just our U.S. military.”

The Energy Department has also announced new investments in earlier stage biofuels research that complement the commercial-scale efforts announced by the Navy and USDA. Totaling $32 million, these early-stage, pre-commercial investments are the latest steps in the Obama Administration’s efforts to advance biofuels technologies to continue to bring down costs, improve performance, and identify new effective, non-food feedstocks and processing technologies.

“Advanced biofuels are an important part of President Obama’s all-of-the-above strategy to reduce America’s dependence on foreign oil and support American industries and American jobs,” said Secretary Chu. “By pursuing new processes and technologies for producing next-generation biofuels, we are working to accelerate innovation in a critical and growing sector that will help to improve U.S. energy security and protect our air and water.”

The new funding announced by DOE includes $20 million to support innovative pilot-scale and demonstration-scale biorefineries that could produce renewable biofuels that meet military specifications for jet fuel and shipboard diesel using a variety of non-food biomass feedstocks, waste-based materials and algae. These projects may support new plant construction, retrofits on existing U.S. biorefineries or operation at plants ready to begin production at the pilot- or pre-commercial scale. This investment will also help federal and local governments, private developers and industry collect accurate data on the cost of producing fuels made from biomass and waste feedstocks. The full funding solicitation is available.

In addition, the Energy Department also announced $12 million to support up to eight projects focused on researching ways to develop bio-based transportation fuels and products using synthetic biological processing. Synthetic biological processing offers an innovative technique to enable efficient, cost-saving conversion of non-food biomass to biofuels. These projects will develop novel biological systems that can enhance the breakdown of raw biomass feedstocks and assist in converting feedstocks into transportation fuels.

The projects will be led by small businesses, universities, national laboratories and industry and will seek to overcome various technical and scientific barriers to cost-competitive advanced biofuels and bioproducts. The full funding opportunity announcement is available.

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