US EPA’s Bold New Course for the Renewable Fuel Standard

With long-sought policy certainty now in hand, time has come to reclaim the growth vision adopted years ago.

The biodiesel, renewable diesel and sustainable aviation fuel (SAF) industry is enjoying a rare level of policy certainty. After a year of waiting for rules on the Renewable Fuel Standard and section 45Z clean fuel production credit, we now have clear signals that support our production capacity, feedstock investments and continued growth.

It’s easy to say that U.S. EPA set final 2026-’27 RFS volumes at historic levels—more than 60 percent higher than the 2025 volume. But more than that, for the first time EPA prioritized farm security, rural economic prosperity and energy independence as the program’s primary goals.

Clean Fuels has always argued that the RFS biomass-based diesel volumes should be set to drive growth in the biodiesel and renewable diesel sector. In 2020, our organization came together and endorsed a vision to grow from roughly 2 billion gallons to 6 billion gallons of production by 2030. EPA’s 2026 RFS volumes will require just over 6 billion gallons of biomass-based diesel for this year—and provide room to continue growing in 2027.

EPA set final volumes that exceed the industry’s unified request for 5.25 billion gallons for 2026. In the end, the agency chose final volumes directly in line with the production and feedstock supplies that our industry agreed were achievable.

The agency listened to industry and carefully considered the investments U.S. companies made in both fuel production and feedstock supplies. The industry has built as much as 7 billion gallons of clean-fuel production capacity. And the soybean-processing industry has built capacity for as much as 2.7 billion bushels—approximately 60 percent of what U.S. farmers grew in the past market year.

In one of the most significant changes from past rules, EPA acknowledged that feedstock availability is not a limiting factor for the clean-fuel industry. The agency concluded that U.S. supplies of vegetable oils and animal fats can grow if the RFS continues to support investment. EPA calculates that the volumes will drive annual increases in the use of soy, canola and animal fats from the U.S. and Canada, along with some imported tallow and animal fats from elsewhere.

But more importantly, EPA recognized that if it once again chose minimal annual biomass-based diesel volumes, “it would reduce many of the positive impacts expected to result from the volumes we are finalizing in this rule.” Low biomass-based diesel volumes like those set in 2025 needlessly sacrifice the RFS program’s energy and farm security benefits—along with environmental improvements and consumer savings.

EPA determined the rule will establish a stable, more reliable domestic market for U.S. crops and generate $10 billion in new economic opportunity and over 100,000 good paying jobs for rural communities. Much of that anticipated growth—$7.7 billion and 26,000 jobs, EPA estimates—will be associated with the biomass-based diesel industry.

Those jobs and economic impacts would be a significant increase from Clean Fuels’ current estimates of economic impact and job creation associated with biomass-based diesel production.

EPA’s rule is both an opportunity and a challenge for the entire clean-fuel value chain. We have to acknowledge—as EPA did—that 2025 was a down year. But we need to do more than just recover now. We need to thrive and resume the growth path we established in 2024.

Data from EPA and other federal agencies always lags behind by a few months, but signs are emerging that fuel generation and feedstock use are increasing. Biodiesel, renewable diesel and SAF production all increased in March, according to EPA data—biodiesel in particular achieved the highest monthly production volume in more than a year. Soybean-oil use in biomass-based diesel again topped 1 billion pounds for the month of February.

We need to work hard to ensure that there is continued growth and opportunity for both biodiesel and renewable diesel producers as well as for all feedstock producers. EPA’s rule envisions both biodiesel and renewable diesel producers running at 90 percent or higher capacity utilization in 2026. That’s a tall order—but it is achievable.

The policy certainty we’ve asked for is in our hands. We must reclaim the vision we adopted years ago. After all, it included growth to 15 billion gallons by 2050—with new markets in rail, shipping and heating, and developing additional oilseed crops to expand feedstocks. Now more than ever, it is imperative we are as bold in our purpose as EPA’s new direction for the RFS program.

Author: Donnell Rehagen

CEO, Clean Fuels Alliance America

800-841-5849

drehagen@cleanfuels.org