EPA Finalizes 2026-27 Renewable Volume Obligations

Last week during the White House Great American Agriculture Celebration, President Trump announced that the U.S. Environmental Protection Agency (EPA) has finalized the Renewable Fuel Standard (RFS) “Set 2” final rule, establishing renewable volume obligations (RVOs) for the next two compliance years.

“In the 20th year of the RFS program, ‘Set 2’ establishes the renewable fuel volume requirements for 2026 and 2027 at the highest levels in program history,” EPA said.

To meet the “historic” 2026 and 2027 volume levels, EPA said it estimates that biodiesel and renewable diesel production and use will need to increase by over 60% compared to 2025 volumes, the last year of the Biden-Harris administration’s “Set 1” rule.

The Trump administration believes these RVOs will drive renewed demand for American soybean producers. EPA estimates that the rule will generate over $10 billion for rural economies and create over 100,000 new jobs in the agricultural and manufacturing sectors. To provide continued certainty for American corn growers and ethanol producers, EPA said it will maintain the 15 billion conventional biofuel level for 2026 and 2027.

“EPA’s final rule demonstrates the Trump administration’s ongoing commitment to America’s farmers and unleashing American energy by reducing America’s reliance on foreign oil, delivering long-term certainty and stability for America’s farmers and biofuel producers, and ultimately creating a path for rural economies to boom,” EPA said.

In a statement, NACS applauded the issuance of ambitious RVOs but simultaneously urged Congress to quickly enact biofuel tax incentives that can help bring down retail fuel costs.

When the RFS works alongside well-functioning incentives like the former Section 40A Biodiesel Tax Credit, it improves the economics for fuel retailers to buy and blend biofuels. These cost savings are passed on to consumers.

“Strong RVOs send an important market signal, but they work best when paired with consumer-friendly fuel tax policy,” said Matt Durand, deputy general counsel for NACS. “When Congress aligns the RFS with proven incentives like the Biodiesel Tax Credit, fuel retailers and their suppliers are better positioned to deliver lower-cost fuels to end users.”

NACS sent a letter to congressional leaders last week reiterating that the lapsed 40A biodiesel blenders credit, if reinstated, can work quickly and efficiently to control rising diesel prices across the supply chain, which effects the cost of virtually all consumer goods.