On May 5, 2009, the Department of Energy ("DOE") announced detailed plans to distribute $786.5 million to fund biofuels research and commercialization initiatives under the American Recovery and Reinvestment Act of 2009[1] (the "Stimulus Package Act"). The DOE will distribute these funds across four main areas:

  1. integrated pilot- and demonstration-scale biorefineries;
  2. commercial-scale biorefinery projects;
  3. fundamental research programs (algal biofuels, infrastructure compatible biofuels, and sustainability); and
  4. ethanol infrastructure research.  

These investments will position the private sector, DOE's national laboratories, and universities to help improve biofuels reliability, and develop third generation biofuels like green gasoline, diesel, and jet fuels. Developing these next generation biofuels will be instrumental in ending U.S. dependence on foreign oil and creating a new green energy economy.

On May 6, 2009, the DOE published a Funding Opportunity Announcement ("FOA") soliciting applicants to apply for grants under the integrated pilot- and demonstration-scale biorefineries program. Interested applicants are strongly encouraged to notify DOE by May 29, 2009 of their intent to apply for funding under this FOA. The DOE will accept grant applications through June 30, 2009.

The DOE's Office of the Biomass Program ("OBP") announced that it expects to publish FOAs for the algal biofuels, infrastructure-compatible biofuels, and ethanol infrastructure research programs in the summer of 2009. OBP issued a special FOA containing brief descriptions of these programs to provide potential applicants the opportunity to develop partnerships and begin the process of gathering data to prepare their applications. Additional information on applying for these grants is forthcoming.

We expect in the very near future, the DOE will issue FOAs soliciting applicants to apply for grants to fund commercial-scale biorefinery projects and sustainability research projects.

Summary of Investments

The DOE plans to invest the $786.5 million for biofuels research and commercialization in both new funding opportunities and existing projects. The funding will be allocated across four main areas, as follows (in millions): see table  

Integrated Pilot- and Demonstration-Scale Biorefineries. These funds will be invested in projects aimed at validating integrated biorefinery technologies that produce advanced biofuels, bioproducts, and heat and power in an integrated system. The program is designed to enable private financing of commercial-scale replications. The DOE anticipates making 10 to 20 awards for refineries of various scales and designs, with a funding ceiling of $25 million for pilot-scale projects, and $50 million for demonstration-scale projects. Eligible projects must be operational within the next three years.

Commercial-Scale Biorefinery Projects. These investments will increase the federal funding ceiling for demonstration- or commercial-scale biorefinery projects that were selected and awarded within the last two years. The DOE will supplement existing project awards with Stimulus Package Act funds to reduce the risk of developing and deploying these first-of-a-kind operations. Two or more projects will be selected to receive this supplemental funding which is intended to expedite the construction phase of selected projects, with the ultimate goal of accelerating the timeline for start up and commissioning.

Fundamental Research in Key Program Areas. The DOE allocated funding to fundamental research initiatives with the goal of developing cutting-edge conversion technologies, including generating more desirable catalysts, fuel producing microbes, and feedstocks. Investments in algal biofuel demonstrations will create a consortium to accelerate the demonstration of this technology through a competitive solicitation.

Investments in the development and demonstration of infrastructure-compatible biofuels will create an advanced research consortium to develop technologies and facilitate subsequent demonstration of infrastructure-compatible biofuels through a competitive solicitation.

Funds allocated to sustainability research will expand the resources currently available for sustainability research through the Office of Science Bioenergy Research Centers. Funding for sustainability research also will be used to establish a user-facility/small-scale integrated pilot plant.

Ethanol Infrastructure Research. Investments in ethanol research will center on E85 fuel, an 85 percent ethanol, 15 percent gasoline blend. This investment was included in OBP's special advance notice FOA in order to increase the availability and use of potential blends of E85 fuel. Following the expected publication of the FOA in the summer of 2009, these funds will be distributed through a competitive solicitation.

Two areas of interest have been identified to increase both the awareness and the use of ethanol blends for transportation. Cost-sharing programs selected to receive funding under Area of Interest 1, "Refueling Infrastructure for Ethanol Blends," must demonstrate they will achieve the following: (1) optimize flex-fuel vehicles operating on high octane E85 fuel; (2) evaluate the impact of higher ethanol blends in conventional vehicles; and (3) upgrade existing refueling infrastructure to be compatible with fuels up to E85. Programs selected to receive funding under Area of Interest 2, "Education and Outreach for Ethanol Blends," must aim to increase public awareness of the benefits, safety, and use requirements of ethanol blends in an accurate, unbiased manner.