President Barack Obama last year announced plans to cut oil imports by more than 30 percent by 2025. During his administration, U.S. oil production is at historic highs as the country moves away from foreign oil.
The U.S. departments of Agriculture, Energy and Navy announced $30 million in funding would be put forward to match private investments for commercial-scale biofuels.
The departments said they'd work together on plans needed to make so-called drop-in biofuel substitutes for diesel and jet fuel available on the commercial level.
"Our reliance on foreign oil is a significant military vulnerability and it would be irresponsible not to address it," Navy Secretary Ray Mabus said in a statement.
Department of Energy funding includes $20 million for pilot-scale biorefineries that would produce renewable biofuels from non-food biomass feedstocks, waste-based materials and algae.
"By pursuing new processes and technologies for producing next-generation biofuels, we are working to accelerate innovation in a critical and growing sector that will help to improve U.S. energy security and protect our air and water," Energy Secretary Steven Chu said in a statement.