This post was also written by Philip G. Lookadoo and Marco A. DeSousa.

In another move demonstrating the Defense Department’s commitment to renewable energy, the U.S. Navy recently announced that it intends to make its largest purchase of biofuels ever for a test run in 2012 of its “Great Green Fleet.” For several years the Navy, as well as other military branches, has been testing biofuels as an alternative to traditional fossil fuels. The Navy uses biofuels to power surface ships and aircraft.

The Defense Department is a major player in the renewable energy space, especially with respect to biofuels. Because of the Defense Department’s incredibly large appetite for energy, the Navy and other military branches have become market makers in the immature biofuels markets. Such large purchases provide much needed revenue to biofuel producers. The Navy has been as emphatic as any branch by setting a goal of procuring 50% of its energy from renewable sources by 2020.

The primary objective of the Navy’s progression towards renewable energy is national security. The security benefits of sourcing biofuels from domestic and diverse, non-domestic producers are obvious, but the profound effect on the economics of these developing markets is also a vested interest, and this is encouraging for renewable energy companies and for the broader goal of combating climate change. The large demand created by the Navy and other military branches for the physical delivery of biofuels is only one aspect of the influence these branches have on the biofuel markets. In addition to purchasing fuel from producers, the Navy has contracted with cutting-edge biotech companies in the R&D stage of production. It is clear that all companies in the biofuels space need to keep abreast of the Defense Department’s biofuels development initiatives.

When so much talk about the federal government involves the perception, whether real or fictional, of its encroachment on the private sector, the Defense Department’s significant influence in the biofuels markets is a net positive for all Americans.