The U.S. Department of Agriculture (USDA) is investing $537 million in 543 biofuel projects across 29 states, as USDA Secretary Brooke Rollins announced. This funding comes from the Higher Blends Infrastructure Incentive Program (HBIIP).
The investment includes projects approved in the first 100 days of the Trump Administration. It also supports President Trump’s 20th Executive Order to boost American energy production and help farmers, ranchers, and small businesses in rural areas.
Powering America’s Energy Landscape with Biofuels
Biofuels are liquid fuels made from plant or animal materials, commonly called feedstocks. They can also include gases like methane (from landfills or biogas) and hydrogen (from renewable sources). While most biofuels power vehicles, they can also be used for heating and electricity. Many government programs support biofuel use because they come from renewable sources.
Different industries and laws use various names for biofuels—like ethanol, biodiesel, biojet, or sustainable aviation fuel.
The press release highlighted that Secretary Rollins announced the investment at an event at Elite Octane LLC. This company is in Atlantic, Iowa, which has the highest capacity of biofuel production in America. Iowa has 42 ethanol plants that produce more than 4.7 billion gallons each year and 10 biodiesel plants that generate 416 million gallons annually.
The funding will help gas stations upgrade their storage tanks and fuel pumps. This makes higher ethanol and biodiesel blends more available. Farmers, small businesses, and local economies benefit from this as it creates more demand for corn and soybeans.
Biofuel exports are also on the rise. USDA revealed that in 2024, the U.S. exported 585,324 metric tons of ethanol, bringing in $5.11 billion. The key buyers were Canada, South Korea, and the European Union. They all want cleaner fuels more than ever.
What’s Inside the Higher Blends Infrastructure Incentive Program (HBIIP)
The Higher Blends Infrastructure Incentive Program (HBIIP) was established at USDA Rural Development during President Trump’s first term. Under this program, gas stations can offer biofuels like ethanol and biodiesel more easily. It helps cover the cost of upgrading fuel pumps and storage tanks so more drivers can choose cleaner, homegrown fuel.
About 290 million cars on U.S. roads can use E15, a fuel blend with 15% ethanol. More than 22 million vehicles can run on E85, which has even more ethanol. Diesel vehicles can use B20, a blend with 20% biodiesel. Expanding access to these fuels helps drivers save money and reduces pollution.
Supporting Farmers and Rural Businesses
HBIIP creates more demand for crops like corn and soybeans, which are used to make biofuels. This investment will help American farmers and boost rural economies. It will also give easy access to cleaner and homegrown fuel to drivers.
Overall, as families gain more access to biofuels like ethanol and biodiesel, they end up paying less.
Secretary Rollins confirmed this by noting,
“President Trump is honoring our commitment to America’s farmers, ranchers and small businesses, especially here in Iowa where corn and soy growers are crucial to supporting ethanol and biodiesel production. Under the President’s leadership, we are moving away from the harmful effects of misguided climate policies like the Green New Deal. Instead, the USDA will deploy energy investments that prioritize the needs of our rural communities. Through HBIIP, we will expand access to domestic, homegrown fuels which will increase good paying jobs for hardworking Americans, restore rural prosperity and strengthen our nation’s energy security.”
Ethanol: The Emission Control Champion
Ethanol is the most common biofuel. It’s a renewable alcohol fuel made from crops like corn, sugarcane, or other plant materials. Microbes (like yeast) break down or ferment plant sugars, turning them into ethanol.
It’s often mixed with gasoline, like E10 (10% ethanol, 90% gasoline), to reduce emissions and improve engine performance. Ethanol is also used in chemical and pharmaceutical manufacturing industries.
The Census Bureau of the U.S. revealed that ethanol exports for 2024 totaled 1.72 billion gallons just through November. It surpassed the previous annual record of 1.67 billion gallons set in 2018.
Poet Biorefining is the largest ethanol producer in the United States. As of 2024, the South Dakota-based company had an ethanol production capacity of 2.7 billion gallons per annum across 33 plants in the Midwest.
- A USDA study showed that greenhouse gas emissions from corn-based ethanol are about 39 percent lower than gasoline.
Thus, using more biofuels is a step toward a cleaner, energy-independent future.
US Biodiesel Exports Drop Sharply in 2024
Biodiesel is a clean-burning alternative to regular diesel, made from vegetable oils, animal fats, or recycled cooking grease. It’s non-toxic and breaks down naturally.
The most common blend is B20, which is 20% biodiesel and 80% regular diesel.
While most biodiesel fuels trucks and heavy machinery, a small amount is now used for heating and electricity. In 2023, about 95% of U.S. biodiesel went to transportation.
The US Census Bureau reported that biodiesel exports took a steep dive in 2024, falling 30% from the previous year’s record high. The US exported 176.8 million gallons in 2024, down from 254.5 million gallons in 2023. This was the lowest volume since 2020, when 142.8 million gallons were shipped.
Export volume of biodiesel from the United States from 2001 to 2023 (in 1,000 barrels)
Canada and Peru remained the top buyers, together accounting for over 99% of total US biodiesel exports in both years. However, exports to Canada dropped 33%, while volumes to Peru saw a modest 2.4% rise.
Fastmarkets noted that some exporters pointed to stricter Canadian rules as a key reason for the drop. This means that new traceability and harvest attestation requirements under Canada’s CFR likely slowed shipments starting in September.
Others suggested that growing renewable diesel imports may have reduced Canada’s need for biodiesel. Unlike biodiesel, renewable diesel performs well in cold weather.
Renewable Diesel Reshaping U.S. Fuel Market
Regular gasoline, diesel, and jet fuel are made from hydrocarbons (hydrogen + carbon molecules). But renewable variants are made from feedstocks such as vegetable oils, animal fats, or used cooking oil. The raw materials for biodiesel and renewable diesel are the same. Renewable hydrocarbon fuels are also called Drop-in” Fuels.
There has been a significant rise in the U.S. to import more fats and oils because of the strong demand for renewable hydrocarbon fuels.
The renewable versions are nearly identical to petroleum diesel and, therefore, are compatible with existing engines and pipelines. This makes them an easy switch from fossil fuels. However, the cost of renewable diesel is higher than traditional petroleum.
From the chart, we can see that last year, the renewable diesel capacity of the U.S. was around 5.5 billion gallons per year. USDA also forecasts the capacity to hit ~ 6.5 billion gallons per year by 2025.
California Drives Real Growth
California’s Low-Carbon Fuel Standard (LCFS) played a major role in renewable diesel’s growth. It gives carbon credits to fuel producers who cut emissions. Since the state maxed out ethanol and biodiesel blending, blenders switched to renewable diesel, as it has no blending limit.
This policy gave investors confidence. They invested in new projects, knowing the demand would last. Notably, because of LCFS, renewable diesel is now a key player in America’s clean fuel market.
Two major federal programs support the growth of renewable diesel:
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Blender’s Tax Credit cuts production costs by giving tax breaks to companies that blend renewable diesel with petroleum diesel.
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Renewable Fuel Standard (RFS) requires biofuels—like ethanol, biodiesel, and renewable diesel—to be part of the national fuel supply.
Oil and Biofuel Groups Debate Higher Blending Mandates
Reuters reported that oil and biofuel companies met with the EPA, pushing for higher biomass diesel blending mandates. This could signal upcoming changes to U.S. biofuel policies.
The coalition wants to raise biomass diesel mandates to 5.5–5.75 billion gallons, up from 3.35 billion, and keep the ethanol mandate at 15 billion gallons. However, smaller refiners argue these increases could hurt jobs and raise fuel prices.
Fuel retailers and truck stop operators skipped the talks, demanding the return of the blenders tax credit, which they say helped keep fuel costs down. Without it, they warn that higher mandates could lead to price hikes (diesel prices by 30¢/USG) and political backlash.
The EPA has not commented on the issue yet.
Overall, biofuels offer cleaner alternatives to traditional fuels, helping reduce pollution while keeping cars, trucks, and planes running smoothly. Amid all resistance and higher costs, it could be a key factor in America’s energy transition.
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The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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