The Environmental Protection Agency has proposed Renewable Volume Obligations for renewable fuels that exceed recent industry requests, along with incentives for domestically produced fuels.
Under the 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 for advanced biofuels and 1.3 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.
This outpaces the ask from a coalition of oil, biofuel and farm groups. Earlier this year, the American Petroleum Institute, National Oilseed Processors Association, Clean Fuels Alliance, Renewable Fuels Association, American Soybean Association and Growth Energy sent a unified request on the RVOs to the EPA.
The coalition represents a major shift from renewable fuel politics under the first Trump administration, when some of these groups were at odds on previous RVOs. But since then, more oil groups have invested in renewable fuels, particularly biodiesel production.
In meetings with EPA, the groups recommended RVOs of 5.25 billion gallons for biomass-based diesel, 15 billion for ethanol and 10 billion RIN gallons for overall advanced biofuels.
EPA’s proposal is a major jump from what were called 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.
Shortly after the proposal was released, some ethanol groups signaled they want to see conventional biofuel volumes above the 15-billion-gallon mark.
“The stakes are high for this next phase of the RFS,” Brian Jennings, CEO of the American Coalition for Ethanol, said in a statement. “Ethanol producers and farmers are under tremendous economic pressure, particularly due to uncertainty caused by current efforts to reorder international trade, and we need EPA to substantially increase domestic ethanol blending under the RFS in 2026 and 2027.”
In another significant move, 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 is a response 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.
The proposal includes new recordkeeping and reporting requirements to go along with the push for domestic fuel production. EPA proposed all domestic renewable fuel produces keep records of feedstock purchases and transfers to track the point of origin. Depending on the feedstock type, this would require noting where the feedstock is grown, produced, generated, extracted, collected or harvested.
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Another big question and potential tension point for the renewable fuel industry under this new administration has been the handling of small refinery exemptions. The first Trump administration granted dozens of these exemptions, which go to facilities that argue complying with the RFS would cause them undue economic harm. Granting these SREs effectively allowed the administration to trim the volume obligations.
EPA Administrator Lee 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. The agency also hopes to have determined this new approach by the time it finalizes the new RVOs.
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.”
Originally, EPA was expected to release RVOs for 2026 to 2028. However, the agency thought it was appropriate to look at a shorter timeframe “due to the increased uncertainty of trying to project out further in the future,” which would increase the chances of having to adjust those future volumes, creating uncertainty in the RFS program and market, EPA wrote in the proposal.
Still, the agency is accepting comments to determine if it should set standards for more than two years.
EPA will hold a public hearing on July 8, and will accept written public comment until Aug. 8.
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