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.
The post US Biofuels Get Big Boost: USDA Invests $537M to Power America’s Clean Energy Future appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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