Biofuel, farm and oil groups have been anxiously awaiting the Environmental Protection Agency’s proposed Renewable Volume Obligations for fuels, fearing they might once again fall below industry requests.
The Biden administration had missed the Nov. 1 statutory deadline for announcing those targets, leading to a great deal of uncertainty and some biofuel plants to idle.
But in a somewhat surprising turn of events, EPA Administrator Lee Zeldin’s proposal exceeded what many industry leaders had expected.
Under the Renewable Fuel Standard, the agency sets renewable volume obligations for different fuel types like biomass-based diesel, advanced and cellulosic biofuels.
Ahead of the announcement, a coalition of oil, biofuel and farm groups had teamed up to present a unified request that called for a 5.25-billion-gallon volume for biomass-based diesel, a 15-billion-gallon differential for ethanol and 10 billion Renewable Identification Number gallons for overall advanced biofuels.
That coalition included the American Petroleum Institute, National Oilseed Processors Association, Clean Fuels Alliance, Renewable Fuels Association, American Soybean Association, and Growth Energy.
Under the recently announced proposal, the total RVO for 2026 would be 24.02 billion gallons. This includes 15 billion gallons for ethanol, 5.61 billion gallons for biomass-based diesel, 9.02 billion gallons for advanced biofuels and 1.3 billion gallons for cellulosic biofuels.
In 2027, this would increase to a total RVO of 24.46 billion gallons. Ethanol volumes would remain the same, but biomass-based diesel volumes would increase to 5.86 billion gallons.
EPA’s proposal is a major jump from Set 1 RVOs, which put targets for biomass-based diesel at 2.82 billion in 2023, 3.04 billion in 2024 and 3.35 billion in 2025.
“As we celebrate the 20th anniversary of the Renewable Fuel Standard, the American Soybean Association applauds the work of President Trump, Administrator Zeldin and Secretary Rollins in promoting American energy dominance and strengthening a key domestic market for U.S. soybean farmers,” said Caleb Ragland, ASA president and soybean farmer from Magnolia, Kentucky,in a statement. “The significant increase in proposed volumes for biomass-based diesel will support soybean farmers, soybean processors, and biofuel producers in rural America, and serves as a much-needed win for our communities. We thank the Trump administration for recognizing and supporting this vital value chain for U.S. agriculture.”
Growth Energy CEO Emily Skor was equally enthusiastic, noting the proposed RVOs “secure an economic lifeline for the nation’s farmers and ethanol producers.
“EPA’s proposal will unlock investments, create jobs, and support growth in rural America, expanding renewable fuel production and creating the kind of certainty that spurs innovation and truly unleashes American energy dominance,” Skor said. “Although EPA has yet to project future SREs, we expect that it will ensure that any lost gallons from exemptions will be reallocated to ensure that blending obligations are met. President Trump first proposed a way to account for lost gallons in 2019 and maintaining that approach will protect biofuel producers and their farm partners from demand destruction.
Focus on domestic feedstocks
In addition to the RVO proposal, EPA proposed cutting in half the RINs generated for imported fuels and fuels produced from foreign feedstocks. This could boost competitiveness for domestically produced fuels, or those made with domestic feedstocks like oilseeds and corn.
EPA wrote in the proposal that the new requirement responds to the influx in imported biofuels and feedstocks like used cooking oil. Groups involved in the domestic biofuel supply chain have raised alarm over the increase in UCO and tallow imported from China. They also argue current fuel standards incentivize these imported feedstocks over domestic ones through lower carbon intensity scores.
Both expanding the RVOs and boosting domestic production will send a strong signal to markets, bring stalled capacity back online and encourage additional investment in the oilseed industry, said the National Oilseed Processors Association.
The group also celebrated the raised RVO, and said it reflects the full domestic capabilities of U.S. crushers and biofuel producers.
“These strong volumes and prioritization of U.S. farmers aligns policy with actual domestic production capacity and ensures that American-grown feedstocks remain at the heart of a secure and affordable energy future,” said Devin Mogler, president and CEO of NOPA.
Small refinery exemptions still in question
The first Trump administration granted dozens of small refinery exemptions, which go to facilities where the RFS would cause them undue economic harm. Granting these SREs effectively allowed the administration to trim the volume obligations.
Zeldin previously told lawmakers that he hoped to quickly work through the backlog of SRE petitions. There are currently 161 outstanding petitions, according to EPA.
In the proposal, EPA said it was still evaluating how it will address these and future petitions. In the meantime, EPA provided an estimated range of exempt volumes from SREs for 2026 and 2027. This ranges from zero gallons, assuming EPA denies all SRE petitions, to 18 billion gallons if all are granted.
In response to this provision of the proposal, Geoff Cooper, president and CEO of the Renewable Fuels Association, said RFA understands the agency’s legal obligation to reallocated exempted blending volumes. But the top priority should be maintaining a high standard for evaluating SRE petitions.
“The entire supply chain is seeking certainty regarding EPA’s plans on SREs, and today’s proposal helps to clarify the agency’s approach moving forward,” Cooper said in a statement. “The marketplace needs to be reassured that the RVOs published by EPA are real and will not be watered down or eroded by SREs.”
Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.
