2025 Positions Biodiesel, Renewable Diesel for Success in 2026

January 05, 2026

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(Clean Fuels Alliance America) The clean fuels industry strengthened its foundation in 2025 behind record policy targets, new engine capabilities and proven performance, setting expectations for continued growth in 2026.

“Government agencies, fleets, manufacturers and consumers in 2025 recognized that biodiesel and renewable diesel have stepped forward and taken a leadership position in fueling our nation’s transportation systems,” Clean Fuels Alliance America CEO Donnell Rehagen said. “Clean fuel use has grown dramatically in recent years, and for the first time, policymakers took full account of that growth.”

Renewable Fuel Standard sets aggressive targets

Last year, for the first time in the history of the Renewable Fuel Standard (RFS), EPA proposed robust biomass-based diesel volumes that accurately reflected the industry’s potential. EPA proposed a renewable volume obligation of 5.61 billion gallons for 2026, and a growth path of annual volume increases for 2027 and beyond.

In doing so, EPA acknowledged the industry’s investments in production capacity and domestic feedstock supplies produced by U.S. farmers.

“Today’s RFS proposal is a welcome and timely signal to U.S. biodiesel, renewable diesel and SAF producers as well as America’s farmers and agricultural businesses,” said Kurt Kovarik, Clean Fuels’ Vice President of Federal Affairs, following the June announcement.

The industry now awaits the long-overdue final rule on these volume targets from EPA.

John Deere Announces B30 Biodiesel Compatibility

Over the past decade, the Clean Fuels technical team has worked closely with John Deere to build confidence in biodiesel performance and quality through the BQ-9000® program. That collaboration helped lay the groundwork for John Deere’s August announcement approving B30 biodiesel use across its entire portfolio of Tier 4 engines. This opens opportunities for farmers who provide soybeans and other feedstocks to use even more of the products they support.

BQ-9000

The eighth annual BQ-9000® Biodiesel Quality Report once again demonstrated that accredited producers consistently deliver fuel that exceeds ASTM requirements. This assurance has helped original equipment manufacturers (OEMs) and fleets embrace higher blends, from John Deere’s equipment approvals to PepsiCo’s fleet of more than 700 B100-capable assets.

Clean fuels support the U.S. economy

Clean Fuels unveiled a new study in 2025 that updated the impact of biodiesel and renewable diesel production on America’s economy. According to the report, clean fuels support:

$42.4 billion in economic activity
107,400 jobs
$6 billion paid in annual wages

Environmental scoring improves

The environmental impact of soy-based biodiesel was shown to be even better than previous reports. Argonne National Lab in 2025 updated its GREET model for Carbon Intensity (CI) scoring with the latest data on soy production, resulting in a 40% decrease in soy biodiesel’s CI score over the past 5 years.

Clean fuels support soybean demand

All of these factors and more in 2025 set the stage for continued growth in clean fuel production and use, and improved stability for soybean markets and U.S. farmers.

Biodiesel and renewable diesel production represent 10% of the value of all soybeans grown in the United States, providing an expanding market for half of all the soybean oil processed domestically.

Today, the industry consumes, on average, more than 1 billion pounds of soybean oil every month. Looking ahead, Clean Fuels envisions that by 2030, total biodiesel and renewable diesel use across on-road, off-road, air transportation, electricity generation and home heating applications will exceed 6 billion gallons, using 18 billion pounds of soybean oil.

ABOUT CLEAN FUELS ALLIANCE AMERICA

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil, and animal fats, the clean fuels industry is a proven, integral part of America’s clean energy future. Clean Fuels Alliance America is the U.S. trade association representing the entire biodiesel, renewable diesel and sustainable aviation fuel supply chain, including producers, feedstock suppliers and fuel distributors. Clean Fuels receives funding from a broad mix of private companies and associations, including the United Soybean Board and state checkoff organizations. READ MORE

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Top 5 Insights for the 2026 Biofuels Market (ResourceWise)

Excerpt from ResourceWise: During our latest ResourceWise webinar, Biofuels Market Outlook 2026, VP of Low-Carbon Fuels, Matthew Stone, highlighted the market signals that will define its short- and longer-term future.

As we look ahead to 2026, the global biofuels market is entering a period of rapid change. These shifts will be shaped by evolving policy frameworks, tightening feedstock availability, and intensifying demand from hard-to-abate sectors.

Here are the top five insights shaping the 2026 biofuels landscape.

1. Policy Tightening Around Waste Oils Will Fundamentally Reshape Feedstock Flows

Several global regions are implementing stricter rules on used cooking oil (UCO) imports and traceability. The EU’s increasing scrutiny of Asian-origin UCO, along with broader concerns about fraudulent feedstock reporting and anti-dumping rulings, is tightening compliance requirements across the board.

These changes will directly impact trade flows into Europe by raising the bar on documentation and verification. This will also put pressure on producers dependent on imported waste oils.

As these developments show, policy is no longer just a background factor in the biofuels market. It's one of the primary market drivers for 2026.

2. SAF Demand Continues Climbing, While Blending Timing is Becoming More Seasonal

Sustainable aviation fuel (SAF) remains one of the fastest-growing segments, driven largely by mandates and airline commitments. But the webinar highlighted an emerging pattern: buyers increasingly delay blending until the second half of the year, leading to a seasonal “catch-up” effect.

This behavior is likely to persist into 2026 as buyers optimize credit positions, navigate uncertain pricing, and respond to evolving compliance rules. SAF demand will stay strong. But supply planning will become more complex and uneven through the year.

3. Renewable Diesel Markets Face Continued Volatility with Margin Pressure and Imports

Renewable diesel (HVO/RD) markets are feeling the strain from multiple factors:

Fluctuating Feedstock Prices
Uncertain Import Volumes
Tightening Renewable Fuel Standards

While demand remains resilient, margins are sensitive. And producers are paying closer attention to trade developments from the US, Asia, and the Middle East.

Expect 2026 to bring greater emphasis on flexible feedstock strategies, diversification of supply chains, and heightened sensitivity to regulatory shifts in major producing regions.

4. Biofuel Producers Will Prioritize Reliable, Scalable Feedstocks

One of the strongest themes in the webinar was that producers are shifting away from purely cost-driven feedstock procurement. Instead, they are focusing on:

Long-Term Supply Security
Robust Sustainability Documentation
Scalable Volumes Tolerant of Policy Tightening

The convergence of fraud concerns, import restrictions, and rising verification costs means that buyers are placing a premium on trusted supply partners rather than opportunistic sourcing. This shift will deepen in 2026, especially for UCO, tallow, and other key waste-based fats.

5. The Market is Preparing for a Major Cross-Commodity Scramble

SAF, e-Fuels, and renewable diesel are all competing for the same limited waste-oil and bio-intermediate pools. Accordingly, pressure across the value chain is intensifying.

The webinar noted that inter-sector competition for feedstocks is already reshaping price signals. This is particularly strong where obligations are the most prevalent, such as aviation.

This multi-sector pull on finite supplies is expected to escalate through 2026. It will place upward pressure on premium waste oils and increase the need for advanced verification and logistics solutions.

Ultimately, this convergence of demand means that producers, traders, and obligated parties will need more streamlined sourcing strategies, more transparent partnerships, and deeper biofuels market intelligence to stay ahead.

2026: Rewards Ahead for Early Planners and Adopters

The 2026 biofuels market will be shaped by the interaction of tightening policy, constrained feedstock availability, and accelerating demand from aviation and renewable diesel.

Industry players that invest early in documentation, risk management, and diversified supply chains will be better positioned to maintain compliance. Doing so will also protect their margins in a more competitive environment.

ResourceWise will continue tracking these developments as the market evolve, providing ongoing insights to help you navigate the shifting landscape. READ MORE