The New RVOs Are Set to Support US Biodiesel Industry Recovery

Evonik’s sodium-methylate production facility in Mobile, Alabama. (Photo: Evonik Corp.)

With biodiesel becoming more competitive against crude oil due to geopolitical price pressures, demand for secure, locally produced inputs is expected to grow.

Last year was certainly a challenging one for the biodiesel industry. Since early 2025, the U.S. biodiesel sector has navigated an uncertain landscape. Production fell sharply as regulatory changes reduced incentives and left producers unclear on who qualified for credits or how they would be calculated. With unpredictable economics, many facilities scaled back output or shut down altogether.

For years, strong economics encouraged the sector to blend above renewable volume obligations (RVOs) under the federal Renewable Fuel Standard. The downturn came when tax credits changed and the 45Z framework was introduced without clear rules, as producers could no longer model margins with confidence. Geopolitical tensions added further pressure. Tariffs and disruptions to the global supply chain increased risks, amplifying the impact of uncertain economics. This is now set to change.

A Turning Point for the Biodiesel Market

In March, the U.S. EPA announced ambitious new RVOs for 2026-’27. These record-high RVOs will increase required blending of biodiesel, renewable diesel, advanced biofuels and cellulosic fuels. Combined with clearer guidance on the 45Z tax-credit eligibility, the new rule offers producers greater predictability and encouragement to ramp up production. This regulation is expected to help steer the market back toward growth, and as producers prepare to respond, the reliability of local partners will matter more than ever.

Why Local Catalyst Production Matters

As the market prepares for renewed growth, producers will seek partners who can match the pace of rising RVOs and provide stability in an unpredictable global climate. The past year has shown how quickly supply chains can be disrupted by tariffs, geopolitical tensions and shipping delays—making imports far less reliable. For producers, this level of volatility is not sustainable.

An important raw material used in biodiesel production is the catalyst sodium methylate. The catalyst is essential in the production of biodiesel, where it helps achieve the highest possible yield. In the transesterification process, triglycerides from vegetable oils, used cooking oils and other fat-based waste react with methanol to form fatty acid methyl esters (FAME)—the chemical name for biodiesel. Without a catalyst to accelerate the reaction, it would proceed very slowly or not at all. By ensuring it runs nearly to completion, the catalyst makes biodiesel production both efficient and cost-effective, turning waste materials into valuable renewable energy.

Domestic sodium-methylate supply is therefore essential to maintaining consistent production. Shorter transport distances reduce exposure to global disruptions, while established logistics networks in the U.S. provide greater flexibility as demand shifts. In a market where producers may need to ramp up output quickly to meet higher blending requirements, reliable and local access to catalysts is critical.

Meeting Sodium Methylate Demand Reliably

Evonik is strongly committed to the global biodiesel industry, supporting decarbonization and a more sustainable world. With four active production sites in the U.S., Germany, Argentina and Singapore, Evonik’s sodium-methylate production network covers the main biodiesel-producing regions.

Over time, the need for secure, localized supply will only grow. Mandates are rising across all regions as countries seek to reduce dependence on fossil diesel and strengthen energy security. With biodiesel becoming more competitive against crude oil due to geopolitical price pressures, demand for secure, locally produced inputs is expected to grow further. By producing catalysts in the regions where biodiesel demand is expanding, Evonik helps ensure that producers have access to the materials they need—without the risks associated with import routes.

In the U.S., Evonik’s local production site is located in Mobile, Alabama. With strong logistical infrastructure, including transloading terminals in the main biodiesel production areas and the capacity to accommodate significant shifts in demand, Evonik offers producers reliability and flexibility as the market scales. The company’s track-and-trace delivery system adds an additional layer of assurance and transparency, providing secure end-to-end visibility across every shipment.

As the regulatory landscape stabilizes and production is expected to increase, the industry is entering a new phase of opportunity. Evonik is ready to support that momentum by offering biodiesel producers a combination of local and global presence, capacity and reliability as they move forward.

Author: Fabio Tufano

Alkoxides Product Line Director for Biodiesel

Evonik

331-666-8235

fabio.tufano@evonik.com