US Biofuels Get Big Boost: USDA Invests $537M to Power America’s Clean Energy Future

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 20^th 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:

• Blender’s Tax Credit cuts production costs by giving tax breaks to companies that blend renewable diesel with petroleum diesel.

• 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.

• READ MORE: Gevo and Axens Boost SAF with Innovative Ethanol-to-Jet Technology 

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