The nation’s biofuels industry got a huge shot in the arm Friday.
EPA Sets Record Blending Mandate for Biomass Based Diesel
The Environmental Protection Agency (EPA) proposed record blending mandates for biomass based diesel in the Renewable Fuels Standard.
The agency raised the levels 67% from 2025 to 5.61 billion gallons for 2026 and upped volumes to 5.86 billion gallons for 2027.
The levels for 2026 exceeded the industry’s recommendation of 5.25 billion gallons, according to Kurt Kovarik, Vice President, Federal Affairs for Clean Fuels Alliance America:
“EPA’s math would indicate that the volume requirement for biomass -based diesel for 2026 is going to be about 5.6 billion gallons, which by any measure, if they’re close or in the ballpark, This is a significant step change from the 3.35 billion gallons that was mandated for biomass -based diesel for 2025, which is exactly what we asked for.”
Biofuels and Feed Stock Imports Discounted
To level the playing field, EPA is also discounting the value of the RIN credit by half for foreign biofuels imports or the use of foreign feed stocks.
“So, only 50% credit for a fuel that’s produced abroad and imported or a fuel that’s produced domestically from a foreign feed stock. And in this case, foreign is any country other than the United States. So even feed stocks from Canada and Mexico,” he explains.
EPA Decision Signals Growth
Both of these actions will send a huge message of growth to farmers and the industry, which is already producing biomass based diesel near these levels.
“This is a real recognition of the investments that have made in in feed stock development the investments made by soybean farmers the enormous expansion of capacity in renewable diesel and biodiesel production,” he adds.
Small Refinery Exemptions Could be Reallocated
While EPA did not deal with the backlog of 169 Small Refinery Exemptions in this proposal, the agency has signaled reallocation, a precedent set under the first Trump administration.
“So by estimating or committing to estimate those gallons and reallocate them. It means that biofuels producers will be held harmless the small refiners will get the Relief that they seek but those that those gallons or those that mandate won’t simply evaporate,” he says.
Meanwhile, the mandate for conventional corn-based ethanol will remain at 15 billion gallons for both years, which is in line with what the industry recommended.
This proposal now goes through a comment period but EPA has indicated they expect to have it finalized by November 1 at the latest.
