The U.S. Department of Energy announced on Monday that it will give $200 million in grants to build refineries for such advanced biofuels as bio-butanol and cellulosic ethanol.

The funding is intended to be used to help speed up commercialization of cleaner, alternative transportation fuels, which use renewable biomass such as fast growing grasses and trees as feedstocks.

The grants are meant to help finance construction of biorefineries in pilot or demonstration mode that could lead to commercialization in the “near term.” The financing will be available over six years, beginning in 2009.

The announcement comes just weeks before the Energy Independence and Security Act of 2007 goes into effect. Beginning in 2009, the legislation mandates the increasing use of renewable biofuel, from 10.5 billion gallons in 2009 to 36 billion in 2022. The act also requires by 2022 that 21 billion gallons of that total be so-called advanced biofuels, the kind targeted in this funding.