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ACE welcomes USDA fleet directive, infrastructure funding to expand availability and use of higher ethanol blends

Sioux Falls, SD (March 2, 2020) – USDA Secretary Sonny Perdue announced that the USDA intends to make available up to $100 million in competitive grants under the Higher Blends Infrastructure Incentive Program (HBIIP) for activities designed to expand the sale and use of renewable fuels, $86 million of which is reserved for higher blends of ethanol and approximately $14 million for higher blends of biodiesel. USDA plans to publish application deadlines and other program information in the Federal Register this spring. Secretary Perdue also issued a memo directing USDA to acquire alternative fueled vehicles (AFV) when replacing conventionally fueled vehicles. American Coalition for Ethanol (ACE) Senior Vice President Ron Lamberty released the statement below following these announcements:

“ACE is pleased that under Secretary Perdue’s leadership, USDA is working quickly to implement a program to help fuel marketers make infrastructure upgrades that may be necessary to offer higher ethanol blends  at fuel stations and blending facilities,  as well as committing to utilize flex fuels in USDA vehicles.

“We believe a very high percentage of existing stations could add E15 using mostly existing equipment, and hope when the details are available, we will see grants  structured to encourage all fuel retailers - including single store and small chain owners - to look into their stations’ compatibility and add higher ethanol blends quickly if they are able. The original BIP program funded about 900 new E15 locations, according to NACS, and during that same time period, more than 2,000 locations added E85, bringing the total to nearly 5,000 stations and creating significant new ethanol volume.

“Because ethanol costs less than gasoline, fuel marketers who make more E15 and flex fuel available to consumers will put added pressure on their competitors to also offer higher ethanol blends or face the likelihood they will lose market share. Owners who act now can use the USDA HBIIP program to reduce their cost of getting ahead or keeping up with the competition, while those who grumble and resist change will be left behind. As ACE wrote in response to USDA’s request for information on a potential HBIIP, meaningful growth in E15 and flex fuel availability will require any infrastructure program created by USDA to assure ‘mom and pop’ c-stores they can afford to add E15 and participate in the program. We look forward to continuing to work with the administration to ensure successful implementation of the program to incentivize the highest number of locations available over the widest geography possible.”

ACE submitted comments on Jan. 30 in response to USDA’s request for information on the HBIIP on how the program should be implemented to create a larger market for ethanol at a low cost per gallon over the long-term.

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