Funding worth up to $90 million (£62m) has been announced to support the US biofuels industry.
The cash will be used to design, construct and operate integrated biorefinery facilities that convert biomass feedstocks to another form of fuel or energy product.
The Department of Energy said the production of biofuels is an important strategy to meet the nation’s goals to reduce carbon emissions and dependence on imported oil.
It adds the US spends around $1 billion (£0.6bn) every three days on imported oil.
Estimates suggest the nation could sustainably produce more than one billion tons of biomass that could be converted into biofuels and bioproducts.
That would help displace more than 25% of US fuel use and reduce greenhouse gas emissions by 550 million tons.
Lynn Orr, DOE’s Under Secretary for Science and Energy said: “The domestic bio industry could play an important part in the growing clean energy economy and in reducing American dependence on imported oil. This funding opportunity will support companies that are working to advance current technologies and help them overcome existing challenges in bioenergy so the industry can meet its full potential.”