The government is preparing to allocate $210 million in matching funds to help construct three refineries that would have the potential to produce 10 million gallons of biofuel annually for the military.
Through the agreement, the Navy would provide $170 million and the Energy Department $40 million, according to Reuters.
The program which was announced last week would help private companies construct biofuel refineries.
Five awards for the first phase of the program will be announced this fall. The initial contracts are worth $30 million each, Reuters reports.
The second phase of the program will begin next year, narrowing the contenders to three. If the contract winners can match federal investments, $180 million will be allocated for financing.
Interested parties must submit their business plans and strategies to create refineries that can produce $10 million gallons of biofuel annually and blend fuel with equal amounts of petroleum, according to Reuters.
Navy Secretary Ray Mabus announced $100 million has already been appropriated for the program under the FY 2012 budget.
In conjunction, an additional $110 million will be appropriated for the program’s FY 2013 budget, starting in October, Reuters reports.