EPA rule bolsters biofuel growth

WASHINGTON — The U.S. Environmental Protection Agency finalized the Renewable Fuel Standard “Set 2” ruling that locks in the highest-ever Renewable Volume Obligations.

EPA’s final rule maintains the required 15 billion gallons of conventional renewable fuels like corn ethanol in both 2026 and 2027.

In addition, 10.82 billion gallons in advanced biofuels renewable identification numbers are required in 2026, increasing to 10.98 billion RINs in 2027.

The new volumes represent a 60% increase over 2025 for both biodiesel and renewable diesel, according to the EPA.

The previously advanced biofuels RINs were proposed at 9.02 billion gallons this year and 9.46 billion in 2027.

EPA will also reallocate 70% of the renewable fuel volumes lost to small refinery exemptions for 2023-2025, effectively restoring 2.03 billion gallons of previously lost demand.

The agency also announced that starting in 2028 foreign fuels and feedstocks will receive half the RFS compliance value compared to American-made products, providing American biofuel producers with time to prepare for the change while ensuring that American farmers benefit from the RFS program and American energy independence.

“This announcement is truly historic for our nation’s farmers and energy producers. These numbers represent the highest levels of biofuels ever required to be blended into our fuel supply,” said Agriculture Secretary Brooke Rollins.

“With President Donald Trump and Administrator Lee Zeldin’s leadership, these historically high volumes are expected to create a $3 billion to $4 billion increase in net farm income. The RFS ‘Set 2’ rule will create a $31 billion dollar value for American corn and soybean oil for biofuel production in 2026, which is $2 billion more than in 2025. Our farmers are stepping up to grow American energy dominance.”

Soybean Boost

“U.S. soybean farmers needed a win to boost domestic markets this year, and President Trump, EPA Administrator Lee Zeldin and Secretary Rollins delivered in a big way. ASA is grateful for the tireless efforts of EPA and USDA to ensure the soy biofuel value chain could benefit from the strongest RVOs ever finalized,” said Scott Metzger, American Soybean Association president and Ohio farmer.

“The 2026-2027 RVOs will increase soybean oil use, boost U.S. soybean processing and grow domestic biofuel markets for our crop. ASA and our soybean farmer members applaud the Trump administration for getting this tremendous rule across the finish line.”

While the rule does not make immediate changes to prioritize domestically sourced biofuel feedstocks, ASA celebrated the EPA announcement to reduce credit generation for imported biofuels and biofuel feedstocks beginning in 2028.

If maintained in the next RVOs, the credit reduction for imports will serve as a significant economic driver for the entire domestic biomass-based diesel value chain and will catalyze domestic demand for U.S. soy.

Domestic biofuel production accounts for over half of all domestic soybean oil consumption and serves as a critical U.S. market for soybean farmers. RVOs set through the RFS are the cornerstone of driving domestic soy-based biofuel demand.

“EPA’s 2026-2027 Renewable Volume Obligations are the most significant year-over-year improvement in RFS rule-making for biomass-based diesel and, subsequently, for U.S. soybean farmers,” Metzger said.

More Clarity

“The final rule locks in the highest-ever renewable fuel volume obligations and provides clarity for farmers, ethanol producers, oil refiners and fuel distributors alike. This action by EPA and the White House will boost the farm economy, strengthen American energy security and reduce fuel prices for hardworking families,” said Geoff Cooper, Renewable Fuels Association president and CEO.

RFA noted that by not fully reallocating the renewable fuel volumes lost to SREs issued for 2023-2025, this rule stops just short of providing farmers and ethanol producers the market expansion opportunity Congress envisioned in establishing the RFS program.

Cooper noted that while RFA advocated for full reallocation of the 2023-2025 SREs, the 70% reallocation included in the rule is better than other options that were under consideration.

EPA had proposed 50% reallocation as an option and also solicited public feedback on no reallocation at all.

“We continue to believe small refinery exemptions are completely unjustified, and the SRE petition process — including EPA’s reliance on the Department of Energy’s ‘scoring matrix’ — is fundamentally flawed,” Cooper said.

“SREs distort the market, undermine fair competition and destabilize the RFS program. And while RFA appreciates EPA’s efforts to minimize market disruptions by reallocating most of the renewable volume lost to SREs, we believe the agency has a duty to fully restore all exempted volumes.”