The RFS Takes a Bold New Course

June 19, 2026

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By Donnel Rehagen (Clean Fuels Alliance America) EPA’s Final Renewable Fuel Standards for 2026 and 2027 are remarkable. It’s easy to say the agency set volumes at historic levels, of course. But more than that, for the first time EPA prioritized farm security, rural economic prosperity, and energy independence in the rule as Congress intended.

Clean Fuels has always argued that the RFS biomass-based diesel volumes should be set to drive growth in the biodiesel and renewable diesel sector. In 2020, our organization came together and endorsed a vision to grow from roughly 2 billion gallons to 6 billion gallons of production by the end of the decade. EPA’s 2026 RFS volumes will require just over 6 billion gallons of biomass-based diesel – and provide room to continue growing in 2027.

EPA set final volumes that exceed the industry’s unified request for 5.25 billion gallons for 2026. In the end, the agency chose final volumes directly in line with the production and feedstock supplies that our industry agreed were achievable.

EPA listened to industry and carefully considered the investments U.S. companies made in both fuel production and feedstock supplies. The industry has built as much as 7 billion gallons of clean fuel production capacity. And the soybean processing industry has built capacity for as much as 2.7 billion bushels – approximately 60% of what U.S. farmers grew in the most recent market year.

In one of the most significant changes from past rules, EPA acknowledged that feedstock availability is not a limiting factor for the clean fuel industry. They concluded that U.S. supplies of vegetable oils and animal fats can grow if the RFS continues to support investment. EPA calculates that the volumes will drive annual increases in use of soy, canola and animal fats from the United States and Canada along with some imported tallow and animal fats from elsewhere.

But more importantly, EPA recognized that continuing to limit biomass-based diesel volumes would needlessly sacrifice the energy and farm security benefits – along with environmental improvements and consumer savings.

“If we reduced the BBD volume to a minimal value, it would reduce many of the positive impacts expected to result from the volumes we are finalizing in this rule.” – EPA, Response to Comments, RFS Program Standards for 2026 and 2027

EPA determines the rule will establish a stable, more reliable domestic market for U.S. crops and generate $10 billion in new economic opportunity and over 100,000 good-paying jobs for rural communities. Much of that anticipated growth – $7.7 billion and 26,000 jobs, EPA estimates – will come from the biomass-based diesel industry.

Those jobs and economic impacts would be a significant increase from Clean Fuels’ current estimates. With 2024 production and market use, we estimate a current economic impact of $42.4 billion for the U.S. economy and 107,400 jobs. A large portion of that current economic impact benefits farmers and oilseed processors – combined $19.1 billion in economic impact and 39,200 jobs.

EPA’s rule is both an opportunity and a challenge for the entire clean fuel membership and value chain. We have to acknowledge – as EPA did – that 2025 was a down year. But we need to do more now than just recover. We need to thrive and resume the growth path we established in 2024.

And we need to work hard to ensure that there is continued growth and opportunity for both biodiesel and renewable diesel producers as well as for all feedstock producers. EPA’s rule envisions driving the biodiesel sector to 90% capacity utilization in 2026. But the agency projects no growth in biodiesel production or feedstock demand between 2026 and 2027. That is a view I’d like to prove wrong.

We need to reclaim the vision we adopted years ago. After all, it included growth to 15 billion gallons by 2050 – with new markets in rail, shipping, and heating and developing additional oilseed crops to expand feedstocks. And we need to be as bold in our purpose as EPA’s new direction for the RFS program.

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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Trump biofuel goals hit reality as US plants lag (Reuters)
Agri-Pulse Open Mic: Donnell Rehagen - Clean Fuels Alliance America (Agri-Pulse; includes AUDIO)

Excerpt from Reuters:

US biodiesel producers operated around 77% of capacity in May, below the EPA's 90% assumption for mandates
May generated 736 million biomass-based diesel RINs versus roughly 915 million needed monthly
AFPM has sued and urged lawmakers to reconsider the 2026 biofuel mandates

President Donald Trump's effort to boost production of bio-based diesel and deliver on promises to farmers and rural communities is colliding with a market reality: U.S. plants are not keeping up with his targets.

The production gap carries political and economic risks.

A sustained shortfall could send renewable fuel credit prices sharply higher and force the Trump administration to ‌invoke a rarely used provision allowing it to lower the mandates it previously set to reflect market conditions. Such an unusual retreat would upset farmers and biofuel producers who fought for larger quotas and who make up an important political constituency heading in to midterm elections.

...

For 2026, oil refiners must generate or purchase 8.86 billion RINs, the equivalent of blending a record 5.4 billion gallons of biodiesel and renewable diesel — a target that is over 60% higher than 2025 levels. Trump has touted the moves as a sign of his support for farmers.

...

Some production is also committed to export contracts, where prices have been stronger because of supply disruptions tied to the Iran war. Those gallons do not generate credits toward EPA mandates.

Refiners generated 736 million RINs in May, according to EPA data, well below the roughly 915 million needed each month to stay on pace, said Scott Irwin, an agricultural economist at the University of Illinois.

He estimates production through the first four months of 2026 lagged required levels by 1.41 billion RINs, a gap that would require output to exceed the industry's highest monthly production by more than 20% for the remainder of the year.

"The mandates effectively require biodiesel plants to run at their highest sustained pace on record and renewable diesel plants to operate well beyond any pace they’ve ever achieved," Irwin said.

...

"There is no way the industry is going to meet its targets at the rate they are going," said Paul Niznik, director of energy at Washington, D.C.-based Capstone LLC, which advises refineries, fuel marketers and hedge fund clients. "The shortfall is causing widespread concern across the industry and what the policy reaction might be."

He added that market participants do not expect the EPA to intervene, despite having the authority to grant a waiver, and instead could consider measures ‌such as lowering ⁠2028 obligations by changing how imported volumes are counted toward obligations.

POLICY UNCERTAINTY STALLED PRODUCTION

Production was held back for months as biodiesel and renewable diesel producers waited for the Trump administration to finalize guidance for the federal 45Z clean fuel production tax credit.

The guidance, released in recent weeks, removed some land-use restrictions and increased incentives for soy-based renewable diesel, changes the industry had sought for a year.

The changes provide greater certainty to expand production and sign feedstock contracts with farmers, said Jeramie Weller, general manager of Minnesota Soybean Processors, a biodiesel producer. Though the changes will likely hike output, it remains unclear whether they came soon enough to offset earlier production losses.

A surge in petroleum prices tied to the Iran conflict also dampened growth in biodiesel production, as supply disruptions boosted margins for conventional ⁠fuels, giving refiners greater incentive to maximize petroleum-based output rather than increase renewable fuel production.

SHRINKING CREDIT MARKET

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Bloomberg Intelligence analyst Brett Gibbs said the EPA could have underestimated the amount of biodiesel and renewable diesel exports and the constraints on importing feedstocks in the short term because of the Iran conflict.

"The EPA may very well have a problem on their hands by the midterms. Definitely into 2027," Gibbs said. READ MORE

Excerpt from Agri-Pulse: This week's Open Mic guest is Donnell Rehagen, CEO of Clean Fuels Alliance America. Members of the groups spent last week in Washington reporting the positive impact the EPA's higher RVO numbers are already having in their industry. Later in the week, USDA finalized the Regenerative Feedstocks rule and provided an updated version of the USDA Feedstock Carbon Intensity Calculator. Rehagen says the industry is poised for growth and hopes future RVO guidance can provide room for continued expansion of the renewable fuels sector. READ MORE