The RFS Takes a Bold New Course Copy

By Donnel Rehagen, CEO

EPA's Final Renewable Fuel Standards for 2026 and 2027 are remarkable. It's easy to say the agency set volumes at historic levels, of course. But more than that, for the first time EPA prioritized farm security, rural economic prosperity, and energy independence in the rule as Congress intended.

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 the end of the decade. EPA's 2026 RFS volumes will require just over 6 billion gallons of biomass-based diesel - 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.

EPA 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% of what U.S. farmers grew in the most recent 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. They 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 use of soy, canola and animal fats from the United States and Canada along with some imported tallow and animal fats from elsewhere.

But more importantly, EPA recognized that continuing to limit biomass-based diesel volumes would needlessly sacrifice the energy and farm security benefits - along with environmental improvements and consumer savings.

"If we reduced the BBD volume to a minimal value, it would reduce many of the positive impacts expected to result from the volumes we are finalizing in this rule." - EPA, Response to Comments, RFS Program Standards for 2026 and 2027

EPA determines 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 come from the biomass-based diesel industry.

Those jobs and economic impacts would be a significant increase from Clean Fuels' current estimates. With 2024 production and market use, we estimate a current economic impact of $42.4 billion for the U.S. economy and 107,400 jobs. A large portion of that current economic impact benefits farmers and oilseed processors - combined $19.1 billion in economic impact and 39,200 jobs.

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

And 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 driving the biodiesel sector to 90% capacity utilization in 2026. But the agency projects no growth in biodiesel production or feedstock demand between 2026 and 2027. That is a view I'd like to prove wrong.

We need to 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. And we need to be as bold in our purpose as EPA's new direction for the RFS program.

ABOUT CLEAN FUELS ALLIANCE AMERICA

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil, and animal fats, the clean fuels industry is a proven, integral part of America's clean energy future. Clean Fuels Alliance America is the U.S. trade association representing the entire biodiesel, renewable diesel and sustainable aviation fuel supply chain, including producers, feedstock suppliers and fuel distributors. Clean Fuels receives funding from a broad mix of private companies and associations, including the United Soybean Board and state checkoff organizations.