farmdoc

The EPA’s recent Renewable Fuel Standard decisions will drive substantial increases in biomass-based diesel production and feedstock demand over 2026-2027, but the full impact is heavily backloaded to 2027. Total feedstock demand will increase 19% in 2026 and 48% in 2027 relative to 2023-2025. For domestic feedstock, the increases are even more dramatic: 63% in 2026 and 113% in 2027. This back-loading means 2027 is the critical year when production approaches full capacity utilization.

The U.S. Environmental Protection Agency (EPA) released a trilogy of decisions for the U.S. Renewable Fuel Standard (RFS) in recent months that represents some of the most significant regulatory developments for biomass-based diesel in the program’s history. The combined effect of higher renewable volume obligations (RVOs), more restrictive small refinery exemptions, and mandatory reallocation creates substantially higher biomass-based diesel requirements for 2026-2027.

The analysis presented in this article demonstrates that the EPA’s recent trilogy of RFS decisions will have a substantial impact on D4 RIN generation requirements for 2026-2027. We use a balance sheet approach to project a 22 percent increase in D4 RIN generation — from an average of 7.84 billion gallons over 2023-2025 to 10.56 billion gallons for 2026-2027 — a large increase by any reasonable standard.

The EPA’s trilogy of recent RFS decisions represents one of the most significant regulatory developments for biomass-based diesel in the program’s history. The combined effect of higher RVOs, more restrictive small refinery exemptions, and mandatory reallocation creates substantially higher biomass-based diesel requirements for 2026 and 2027. Compared to 2023-2025, revised biomass-based diesel RVOs look to increase around 50 percent over 2026-2027.