After 15 years of work with some extraordinary collaborators, I’m thrilled to share that “The Biofuels Blueprint: Understanding the U.S. Renewable Fuel Standard” has been published as a Featured Article in Applied Economic Perspectives and Policy — and it’s open access.
This is the comprehensive review of the RFS I wish I’d had when I started working on biofuel policy. Co-authored with Maria Gerveni (Cal Poly), Todd Hubbs (Oklahoma State), and James Stock (Harvard), it synthesizes nearly two decades of program evolution, market outcomes, and economic analysis, all in one place. We aimed to produce a reference that explains how the RFS actually works in practice, not just in theory. Also, we wanted the article to be accessible to a general audience interested in biofuels and the RFS. A Ph.D. is not required to read the article.
In the article, we provide a detailed review of the program’s institutional framework and nested mandate structure based on life-cycle greenhouse gas reductions, the RIN compliance system and recent trends in biofuel production, the history of weekly RIN prices across categories, the calculation of RIN bundle prices and overall compliance costs, the economic fundamentals that drive RIN pricing, and the pass-through of RIN costs through the fuel supply chain.
A few of the key findings in the article:
• The substantial divergence between statutory targets (36 billion gallons by 2022) and actual implementation (~20 billion gallons), driven largely by the failure of cellulosic biofuels to scale.
• RIN price volatility — often blamed on speculation or manipulation — actually follows rational economic fundamentals, once the E10 blend wall and the role of biomass-based diesel as the “marginal gallon” are properly accounted for.
• Total inflation-adjusted RFS compliance costs of $252.1 billion over 2011–2025.
• Full pass-through of RIN compliance costs at the bulk wholesale level, with a more mixed picture at retail for higher biofuel blends.
• The rise of renewable diesel as a structural shift with major implications for the program’s future.
The lessons here matter well beyond the RFS itself. As state and national governments pursue new renewable fuel policies — sustainable aviation fuel being the most prominent example — the U.S. experience offers an honest accounting of what works, what doesn’t, and what happens when policy ambition outruns market reality.
Lastly, an honest warning: this is not a short paper. But how could a comprehensive review of the most ambitious and complicated biofuel policy ever implemented possibly be short? I genuinely believe you won’t find anything like it anywhere else, and it is well worth reading from beginning to end.
Laurence J. Norton Chair of Agricultural Marketing
University of Illinois at Urbana-Champaign