Companies have been invited to submit proposals to a $30m biofuels initiative aimed at reducing the US military’s reliance on imported oil.

The funding is set to be provided by the US Department of Agriculture (USDA), the Navy, and the Department of Energy (DOE) to match private investments in commercial-scale advanced ‘drop-in’ biofuels – so-called because they can act as immediate substitutes for diesel and jet fuel without the need for new engines or fuelling infrastructure.

The latest fund is part of a $500m programme launched by the three bodies last year to help build up the supply of biofuels to help meet President Obama’s goal of reducing oil imports by a third by 2025.

Alongside the funding, the DOE also announced a further $32m of new investments in early stage research to accelerate the development of biofuel technologies.

The department announced that $20m would be made available to support pilot-scale bio-refineries that produce jet fuel and diesel to military specifications using a variety of non-food biomass feedstocks, waste-based materials, and algae, with an additional $12m for research into synthetic biofuels processing.

The armed forces have been leading US efforts to develop alternative fuels and on Friday the Navy officially launched a six-week operation in the Pacific dubbed the “great green fleet” that will be fuelled largely by a blend of biofuel and petrol.

However, Republicans have criticised the administration’s expenditure on the programme, citing the $26-a-gallon cost of the blend, compared to $3.60 a gallon for conventional fuels.

The secretary of the Navy, Ray Mabus, one of the programme’s biggest cheerleaders, dismissed the criticism as short-sighted. “Our reliance on foreign oil is a significant military vulnerability and it would be irresponsible not to address it,” he said in a statement.

“Pursuing a viable, domestic alternative is the best way to preserve the budget for operational necessities like training and shipbuilding, and this funding opportunity is an important step in accelerating an economically self-sufficient alternative fuels market.”