USDA HBIIP Update

Last week, President Donald Trump and his team announced through Executive Order, a freeze on federal agency spending while the Administration implements its initiative to review agency expenditures. The freeze on federal agency spending included federal agency grants which directly impacts access to the USDA HBIIP grant program funds. USDA HBIIP funds have served as the single-most impactful investment program in the history of high blend biofuel infrastructure investment.

Following the Administration’s announcement, lawsuits challenging the Executive Order were quickly filed. In response, the Administration rescinded the memorandum issuing the Executive Order along with a statement that the Administration’s review of federal agency expenditures would continue. On Monday, February 3, a pause on the Administration’s freezing of federal funds was extended by a U.S. District Court judge.

Nonetheless, at the time of this drafting, USDA HBIIP grant disbursements are not flowing to successful applicants. Agencies are likely awaiting clear direction from the Office of Management and Budget and the Administration before continuing disbursements.

FUELIowa is aware of the challenges and uncertainty members face in response to this pause as you work to secure bank notes as well as pay deposits for contractors and equipment purchases. FUELIowa estimates over 275 projects in Iowa alone have seen disbursements delayed by this funding freeze. All against the backdrop of a looming deadline for compliance with Iowa law on January 1, 2026.

Rest assured, FUELIowa is working closely with Senators Grassley and Ernst, Representatives Feenstra, Hinson, Miller - Meeks, and Nunn to make certain the disbursement of contractually committed funding under the USDA HBIIP grant program is expedited under the Trump Administration’s review of federal expenditures. FUELIowa members impacted by the funding freeze are encouraged to contact John Maynes (john@fueliowa.com; 515-421-4043). Sharing your commitment to the advancement in sales of high blend biofuels will be critical to show the impact of HBIIP funds and its alignment with the Administration’s energy policy priorities.