The funding will advance administration plans to reduce carbon emissions and enhance American energy security.
The agency will fund pilot and demonstration scale manufacturing of biofuels, bioproducts, and biopower projects. It will help in the construction biorefinery infrastructure to integrate advanced pretreatment, process and convergence technologies.
It will support projects which will enhance and demonstrate processes that break down complex biomass feedstocks and convert them to gasoline, diesel and jet fuel, as well as plastics and chemicals.
DOE Science and Energy under secretary Lynn Orr 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."
According to estimates, the US spends about $1bn, every three days to import oil. On the other hand, the government also estimates that they can produce more than 1 billion tonnes of biomass that could be converted to biofuels, bioproducts and biopower.
The biofuel produced from biomass has potential to replace 25% of country’s petroleum requirement helping it reduce 550 million tons of green house gas.
Funding from the DOE will support at least three commercial pioneer commercial plants over the next twelve years.