The U.S. EPA on June 13 released a proposed rule to set strong 2026 and 2027 Renewable Fuel Standard renewable volume obligations (RVOs). The rulemaking also alters the RFS to limit the participation of imported fuels and feedstocks, eliminates electricity from the program, and reduces the 2025 cellulosic RVO. 

The EPA is proposing to set the total 2026 RVO at 24.02 billion renewable identification numbers (RINs), a nearly 8% increase when compared to the 2025 RVO. The proposed 2027 RVO is 24.46 billion RINs, up nearly 2% when compared to the previous year. 

The proposed 2026 RVO of 24.02 billion RINs includes the nested targets of 1.3 billion cellulosic biofuel RINs, 7.12 billion biobased diesel RINs, and 9.02 billion advanced biofuel RINs. The implied mandate for conventional biofuel, primarily met by corn ethanol, would be set at 15 billion RINs. In previous years, the EPA proposed the biobased diesel targets in terms of gallons rather than RINs. The agency has proposed to now specify the biobased diesel target in RINs, projecting that 5.61 billion gallons of biobased diesel would be needed to comply with the 2026 RVOs. 

The proposed 2027 RVO of 24.46 billion RINs includes the nested targets of 1.36 billion cellulosic biofuel RINs, 7.5 billion biomass-based diesel RINs, and 9.46 billion advanced biofuel RINs. The implied mandate for conventional biofuel would be set at 15 billion RINs. The EPA estimates that 5.86 billion gallons of biobased diesel would be needed to meet the 2027 RVOs. 

The EPA is also proposing to reduce the 2025 RVO for cellulosic biofuel to 1.19 billion RINs, down from the previously finalized RVO of 1.38 billion RINs. To help avoid the need to make future cellulosic biofuel RVO adjustments, the EPA is proposing to change the way it projects cellulosic volumes. The new approach proposes to account for projected fuel use in the CNG/LNG vehicle fleet. 

The proposed rule also includes provisions aimed at boosting domestic biofuel production by limiting the ability for imported fuels and feedstocks to participate in the RFS. Specifically, the EPA is proposing to modify the value of a RIN based on whether the biofuel is derived from domestic or foreign sources. Under the proposed regulations, foreign biofuels and feedstocks would only generate 50% of the RIN value relative to domestic biofuels and feedstocks. 

Under the proposed approach, renewable fuel producers and importers would generate 50% fewer RINs than they generate for the same volume of import-based renewable fuel under the current RFS regulations. Renewable fuel produced by domestic producers using domestic feedstocks would continue to generate the same number of RINs that they currently do. The import RIN reduction would apply to all foreign-produced renewable fuel, regardless of whether those fuels are produced from domestic or foreign feedstocks. 

To ensure renewable fuel producers are generating the appropriate number of RINs, the EPA is proposing that all domestic renewable fuel producers be required to keep records of feedstock purchases and transfers that identify the point of origin for each feedstock and report that information to the EPA. 

The feedstock origin would generally be defined as the location where a feedstock is grown, produced, generated, extracted, collected or harvested. For planted crops, cover crops or crop residue, the point of origin would be the location of the feedstock supplier that supplied the feedstock to the renewable fuel producer or biointermediate producers, such as the grain elevator. For oil derived from planted crops, cover crops, or algae, the point of origin would be the crushing facility where the oil is extracted. For biogenic waste oils/fats/greases, separated yard waste, separated food waste, or municipal solid waste (MSW), the point of origin is the location of the establishment where the waste is collected, such as a restaurant or food processing facility. For biogas, the point of origin is defined as the location of the landfill or digester that produces the biogas, and for woody biomass, the point of origin is the location where the feedstock is harvested. 

The proposed rule also aims to eliminate electricity, or eRINs, from the RFS. The EPA has taken steps in recent years to roll electricity into the RFS program, but, to date, has failed to approve a single eRIN pathway. The proposed rule aims to remove the definition of “renewable electricity” from RFS regulations along with the regulations associated with generating eRINs. If finalized, the proposed action will ensure that no RINs are generated in the future for electricity used in motor vehicles, according to EPA. 

A public comment period on the proposed rule is open through Aug. 8. The EPA has announced it will hold a virtual public hearing on the proposed rule on July 8. An additional session could be held July 9, if needed. 

The Renewable Fuels Association said the proposed rule provides crucial growth opportunities. “Today’s proposal is an important step toward achieving President Trump’s vision of lower gas prices, a stronger agriculture industry, and American energy dominance,” said Geoff Cooper, president and CEO of the RFA. “The volumes proposed today provide crucial growth opportunities for U.S. ethanol producers and farmers, while boosting the supply of lower-cost, American-made energy. We thank Administrator Lee Zeldin and his team at EPA for listening to stakeholders from agriculture and the entire fuels industry as this proposal was being crafted.”

“This proposal sends a very positive and powerful signal to U.S. renewable fuel producers and farmers. It represents an excellent starting point for the 2026 and 2027 RVO discussion,” Cooper added. “We look forward to providing more feedback to EPA on the proposed volumes during the public comment period, and we’ll continue to underscore the vital importance of a strong RFS to America’s rural communities.”

The American Coalition for Ethanol is calling the rulemaking a pivotal opportunity. “The stakes are high for this next phase of the RFS,” said Brian Jennings, CEO of ACE. “Ethanol producers and farmers are under tremendous economic pressure, particularly due to uncertainty caused by current efforts to reorder international trade, and we need EPA to substantially increase domestic ethanol blending under the RFS in 2026 and 2027.

“This rulemaking is a pivotal opportunity for the Trump administration to fully utilize the RFS statutory authorities by setting ambitious blending targets that reflect the critical role American ethanol plays in strengthening U.S. energy security, boosting rural economies, and reducing prices at the pump,” he added. “While we’re encouraged the Agency has indicated it intends to move quickly toward finalizing the 2026-2027 RVOs, ACE will continue urging EPA to use its statutory authority to ensure conventional biofuel volumes are well above 15-billion gallons to support a growing U.S. ethanol industry.

“Our forthcoming comments will also emphasize the importance of projecting and reallocating small refinery exemptions (SREs) to provide greater certainty and uphold the integrity of the RFS program, as well as stress the need for EPA to adopt the most current GREET model for accurately accounting lifecycle greenhouse gas emissions — emissions that continue to trend lower for ethanol,” Jennings continued.

Growth Energy said the proposal will strengthen rural America. "Today's proposed RVOs secure an economic lifeline for the nation's farmers and ethanol producers,” said Eimly Skore, CEO of Growth Energy. “EPA's proposal will unlock investments, create jobs, and support growth in rural America, expanding renewable fuel production and creating the kind of certainty that spurs innovation and truly unleashes American energy dominance. Although EPA has yet to project future SREs, we expect that it will ensure that any lost gallons from exemptions will be reallocated to ensure that blending obligations are met. President Trump first proposed a way to account for lost gallons in 2019, and maintaining that approach will protect biofuel producers and their farm partners from demand destruction.

"Only biofuels can unlock the investments and jobs needed to strengthen the rural economy,” Skor continued. “ We applaud President Trump and EPA Administrator Zeldin for keeping their promise to fight for farmers and create opportunities in rural communities that have too often been left behind.”

Clean Fuels Alliance America is also welcoming the proposed rule. “Today’s RFS proposal is a welcome and timely signal to U.S. biodiesel, renewable diesel and SAF producers as well as America’s farmers and agricultural businesses,” said Kurt Kovarik, vice president of federal affairs at Clean Fuels. “The industry has made major investments in domestic production capacity and feedstocks to meet America’s energy needs and provide consumers affordable, cleaner fuels. We anticipate this will have a tremendous beneficial impact for American farmers and agricultural communities and we look forward to working with President Trump and EPA Administrator Zeldin to finalize this rule and fully unleash U.S. clean fuel producers.

“Our industry supplied more than 5 billion gallons of biodiesel, renewable diesel and SAF to the U.S. market in 2024, and is poised to deliver more in 2026,” Kovarik added. “The U.S. biomass-based diesel industry supports 107,400 jobs and generates $42.4 billion in economic activity. Continued market growth and stability through the RFS will enable more economic opportunities, create more jobs, and revitalize America’s agricultural sector.”

The American Biogas Council expressed disappointment in the proposed rule, noting the proposal is not a win for dairy and other livestock farmers. “The ABC is disappointed by EPA’s proposal, which reduces the growth of cellulosic biofuels under the RFS,” said Patrick Serfass, executive director of the ABC. “The proposed D3 RVO cuts growth in half, two years in a row, down to 5% annual growth, ignoring the demonstrated 20-30% growth of D3 fuel production.

“This proposal is not a win for all farmers. In particular, dairy and other livestock farmers are the most harmed,” he added.T”he RFS supports these communities through steady income generated from converting their waste to renewable fuel. This misalignment is particularly surprising given the Administration’s welcome, outspoken support for American farmers and the natural gas industry. 

“In addition to increasing the volumes to match actual production, EPA has several opportunities to increase the demand for more domestic, renewable fuels. We implore EPA to take action on outstanding pathways and tailpipe rules to help grow end-use markets,” Serfass continued. 

The RNG Coalition said the proposal undervalues demonstrated growth in renewable natural gas (RNG) production. “RNG COALITION appreciates the timely release of the proposed volumes for 2026 and 2027 as well as efforts to get the program back on track," said Johannes Escudero, RNG COALITION founder and CEO. "However, we believe RNG and the biogas value chain have a greater role to play in supporting the energy dominance pillar of the agency’s 'Powering the Great American Comeback' initiative."

Additional information, including a full copy of the proposed rule, is available on the EPA website.