It’s rare, but U.S. biofuels and petroleum industry groups have been working together with EPA to broker higher mandated blending levels for biomass based diesel.
The groups have finalized a deal to raise the renewable volume obligations (RVOs) in the Renewable Fuels Standard for biomass-based diesel and advanced biofuels to 5.25 billion gallons for 2026.
Kurt Kovarik, vice president of federal affairs, Clean Fuels Alliance America says it is a historic agreement.
“If you consider where our volume is that EPA set for this year is at 3.35 billion gallons, so 5.25 is an increase of 1.9 billion gallons,” he explains. “That’s probably five-fold larger than any increase that EPA has ever granted, but the reality is that’s where our market is at.,”
He points out that when the Biden administration’s EPA, set a three-year RVO in 2023 and set the volume at 3.35 billion gallons for this year, the industry knew it was likely to be 2 billion gallons under where it should have been,
“And we were exactly right,” he says.
That’s why a coalition of farm and biofuels groups had been asking EPA for more robust volumes even then.
This week a bipartisan coalition of lawmakers also urged EPA Administrator Lee Zeldin to finalize these blending levels as they are consistent with production and availability.
He says: “A letter went just this earlier this week from Senators Grassley from Iowa and Senator Klobuchar, Democrat of Minnesota. A bipartisan letter, I think it had 16 ultimate signatures on there endorsing robust volumes under the Renewable Fuel Standard, pointing to these the RVOs as an opportunity to strengthen value added agriculture, which is better for our economy.”
Kovarik says they expect EPA to release the final volumes for 2026, and perhaps 2027, in April or more likely May.
But how likely is the agency to adhere to the agreed volumes?
According to Kovarik, “So do I think that we’re guaranteed to get 5.25 in 2026? There’s no guarantee whatsoever. However, as I stated, I think it makes a decision a lot easier for the policymakers when they can be presented with a unified position where conflict will be reduced.”
He adds that an RVO level of 5.25 billion gallons alone will solve 80% of the market uncertainty the industry’s been facing, allowing the nation’s biodiesel plants to get back online.
Many slowed production due to the biofuels policy uncertainty and flat-lined mandates in the last RVOs.
