US EPA issues biggest jump in biobased diesel RVOs in RFS program history

The U.S. EPA released March 27 its long-awaited renewable volume obligations (RVOs) under the Renewable Fuel Standard for 2026 and 2027, including several important changes to the program. 

The biomass-based diesel (BBD) RVOs for the final rule are even higher than what EPA proposed last June, coming in at 8.86 billion RINs and 8.95 billion RINs for 2026 and 2027, respectively.  

When EPA released its volume proposal for BBD last June—7.12 billion RINs (approximately 5.61 billion gallons) for 2026 and 7.5 billion RINs (5.86 billion gallons) for 2027—the numbers exceeded industry expectations and represented the largest growth proposal for BBD in the history of the RFS program. 

These were up from 3.35 billion gallons for 2025 set by the previous administration, which was part of a three-year rule that disappointed stakeholders, as it fell far below what the industry could actually produce after the renewable diesel boom of the early 2020s. 

Source: U.S. EPA

Last June, the agency proposed to issue all future RVOs in renewable identification number (RIN) equivalents. Up until now, all RVOs for BBD were in gallons while other biofuel RVOs were in RINs. One RIN is equivalent to one ethanol-equivalent gallon of renewable fuel. A gallon of biodiesel, for instance, generates 1.5 D4 RINs.  

According to EPA, with approximately 210 million RINs being reallocated for 2026 and 250 million RINs for 2027, the total applicable BBD RVOs for 2026 and 2027 are 9.07 and 9.2 billion.  

“To meet the historic 2026 and 2027 volume levels, EPA estimates that biodiesel and renewable diesel production and use will need to increase by over 60 percent compared to 2025 volumes,” EPA stated.  

For total advanced biofuels under the RFS program, EPA proposed last June 9.02 billion ethanol-equivalent gallons for 2026 and 9.46 billion ethanol-equivalent gallons for 2027. This proposal was up from 7.33 billion ethanol-equivalent gallons in 2025 set by the previous administration. In the final rule, the agency set total advanced biofuel RVOs at 10.82 billion RINs for 2026 and 10.98 billion RINs for 2027. With reallocation, the applicable 2026 and 2027 total advanced biofuels are 11.1 billion and 11.32 billion RINs.  

In addition to much-anticipated RVOs, EPA made—or is soon expected to make—several other important decisions in the final RFS rule, including whether qualifying imports would generate fewer RINs (the “half-RIN” proposal from June) than domestic biofuels, and what percentage of waived gallons would be reallocated from small-refinery exemptions (SREs) granted to obligated parties. 

EPA announced that starting in 2028, foreign fuels and feedstocks will receive half the RIN value compared to domestic products, “providing American biofuel producers with time to prepare for the change while ensuring that American farmers benefit from the RFS program and American energy independence,” the agency stated.  

On reallocation, the biofuel industry had been urging EPA to reallocate 100 percent of waived SRE gallons from 2023-’25, but in the proposal last year the agency said it would consider comments on reallocating all, some or none of the gallons. In its final rule, EPA said it is reallocating 70 percent of waived SRE gallons from 2023-’25.  

“The entire U.S. clean-fuel industry—from farmers and feedstock providers to fuel customers—is grateful to see this rule finalized,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America. “U.S. biodiesel, renewable diesel and SAF producers are eager to get to work and bring the 7 billion gallons of existing production capacity up to speed to meet 10 percent or more of America’s demand for diesel fuel.” 

In 2025, biodiesel and renewable diesel facilities were forced to shut down or run far below prior-year production levels due to market uncertainty. U.S. biodiesel production declined by one-third in 2025, compared to 2024, according to Clean Fuels. 

Other important aspects of the final rule are expected to be announced or released soon.

Stay tuned to Biobased Diesel Daily® for updates.