Obama Administration Pledges $510 Million for Biofuels

Three-year initiative calls for private-sector matching funds.

Biofuel Big

Biofuel Big

The Obama Administration this week announced a plan to invest up to $510 million over three years in advanced drop-in aviation and marine biofuels as part of an initiative to cut America's dependency on foreign oil.

President Obama announced Tuesday that the Departments of Agriculture, Energy and Navy will be investing in partnerships with the private sector to produce biofuels for commercial and military transportation. With the announcement, the federal government becomes a major investor in aviation biofuels, which are alternative aviation fuels that can be mixed with existing jet fuels to provide the same or more efficient performance, and marine biofuels, both of which can be used effectively for commercial and military purposes. The investment will also require a one-to-one match of cost sharing from the private sector.

“This initiative is crucial to help turn the promise of advanced aviation biofuels into reality, enhancing America's energy security and reducing greenhouse gas emissions while creating jobs," said Air Transport Association president Nicholas Calio. "We already know how to produce and safely fly aviation biofuels, so the government investment will help clear the last hurdle and make the fuels commercially viable.”

U.S. biodiesel production reached a new monthly high of 81 million gallons in June, according to the latest statistics from the EPA, marking it the third consecutive month of record volumes and continuing a turnaround in which biodiesel production in the first half of 2011 has already surpassed production for all of 2010.

Despite the weak economy, the biodiesel industry is on track to produce at least 800 million gallons this year, more than double biodiesel production of 315 million gallons last year.

By 2016, the U.S. Air Force wants half of its domestically purchased aviation fuel to be derived from renewable resources.