ENVIRONMENTAL PROTECTION AGENCY
HEARING ON PROPOSED RULE FOR RENEWABLE FUEL STANDARD
For questions on the note below, please contact the Delta Strategy Group team.
OVERVIEW
On June 13, the Environmental Protection Agency (EPA) announced a proposed rule to set the required Renewable Fuel Standard (RFS) volumes and percentage standards for 2026 and 2027. The proposed rule also contains a new policy that fuel produced from foreign feedstocks will only receive half, or fifty percent, of the awarded Renewable Identification Numbers (RINs). The proposed volume requirements are outlined below.
| Proposed Volume Requirements (billion RINs) | 2025 | 2026 | 2027 |
| Cellulosic biofuel | 1.19 | 1.30 | 1.36 |
| Biomass-based diesel | n/a | 7.12 | 7.50 |
| Advanced biofuel | n/a | 9.02 | 9.46 |
| Renewable fuel | n/a | 24.02 | 24.46 |
On July 8, the EPA held a hearing on the proposed RFS volumes and percentage standards for 2026 and 2027. The hearing provided industry perspectives on several proposed regulatory changes to the RFS program, including reducing the number of RINs generated for imported renewable fuel and renewable fuel produced from foreign feedstocks. The hearing had seventeen panels, composed of a variety of industry stakeholders ranging from biofuels producers and refiners to affiliated trade associations. An overview of the panelists is available here.
KEY TAKEAWAYS
The EPA’s proposed Renewable Volume Obligations (RVOs) for 2026 and 2027 largely received broad support from biofuel and agricultural stakeholders, with panelists commending the EPA’s timely proposal. Panelists praised the proposal for establishing record-high volumes, particularly fifteen billion gallons annually for conventional biofuels, which was framed as a critical step to revitalize rural economies, support U.S. agriculture, and advance energy security. Many discussed and agreed that the proposed D4 requirements are realistic and constructive, working to ensure demand for ag-based fuels, with U.S.-based producers generally supporting the measure as aligning with U.S. energy security goals and 45Z tax credit rules. Support for permanent year-round access to E15 was highlighted, alongside calls for the EPA to finalize its proposal to simplify E15 infrastructure and labeling requirements. Comments underscored the economic impact of expanding domestic renewable fuel production, citing significant investments in soybean crush capacity, biodiesel and renewable diesel infrastructure, and corn ethanol production.
The EPA’s proposal to reduce the number of Renewable Identification Numbers (RINs) generated for imported renewable fuel and feedstocks by fifty percent was debated as an area of concern. Several agriculture and biofuel advocates strongly supported the measure as essential to leveling the playing field for domestic producers and protecting against foreign imports overwhelming domestic production capacity. Importers of foreign feedstocks and associations representing coastal refineries criticized the approach as inconsistent with RFS statutory authority, with the potential to introduce non-tariff barriers that could invite trade retaliation and be disruptive to RIN markets. Many urged EPA to decouple the change to the proposed foreign import-derived RIN from the core RVO rulemaking and reassess the proposal’s economic, legal, and international implications before finalizing, to avoid constraining compliance options, raising program costs, and disrupting both feedstock availability and RIN market stability. Some also highlighted the need to ensure sufficient RVOs are maintained regardless of the import RIN proposal’s final status to avoid crowding out domestic capacity, in addition to concerns about agricultural products’ use for biofuel production disrupting domestic food supply and production. Several panelists brought up potentially expanding the EPA’s proposal to allow feedstock from Canada and Mexico to also receive the full RIN in comparison to USMCA countries.
In addition to outlining their support for the proposed volumes, multiple panelists raised concerns about the treatment of Small Refinery Exemptions (SREs). Industry stakeholders were largely consistent in calling for finalizing strong, enforceable volumes while ensuring RFS program transparency, rigorous SRE management, and protection for domestically produced bio-based fuels. Many called for the EPA to strictly limit SREs to cases of demonstrated economic hardship and to ensure that any exempted volumes are reallocated to maintain overall blending requirements. Several warned that granting retroactive exemptions or failing to account for waived volumes could undermine program integrity and erode market certainty, deterring investment and harming demand for domestic feedstocks and fuel production. Regarding pending SRE petitions being granted for RFS compliance years that have already concluded, several comments included that any RINs returned to small refiners must be deemed invalid for use in meeting current or future RFS obligations.