The EPA finalized record Renewable Volume Obligations for 2026 and 2027, setting the highest total renewable fuel levels in the program’s history and concentrating growth in biomass-based diesel and advanced biofuels. The agency set total renewable fuel volumes at 26.81 billion gallons for 2026 and 27.02 billion gallons for 2027, reflecting stronger domestic production and rising demand for lower-carbon fuels. Conventional ethanol obligations remain unchanged, while policy adjustments around small refinery exemptions and cellulosic waivers aim to stabilize markets.
EPA stopped short of immediately curbing imports in the RIN market, choosing not to finalize proposed import-related RIN restrictions for the 2026–2027 rule. Instead the agency signaled it will pursue import-related changes to take effect beginning with the 2028 compliance year or shortly thereafter. The agency also issued a partial waiver for the 2025 cellulosic biofuel requirement to align obligations with actual production.
The rule sets specific category targets: cellulosic biofuel at 1.36 billion gallons in 2026 and 1.43 billion gallons in 2027; biomass-based diesel at 8.86 billion gallons in 2026 and 8.95 billion gallons in 2027 (rising to 9.07 and 9.20 billion gallons after accounting for small refinery exemption reallocations); and advanced biofuel at 10.82 billion gallons in 2026 and 10.98 billion gallons in 2027 (increasing to 11.10 and 11.32 billion gallons after SRE adjustments). EPA also redistributed previously exempted small refinery volumes, adding 0.99 billion gallons in 2026 and 1.04 billion gallons in 2027 back into future obligations.
How volumes break down
Keeping the conventional renewable fuel requirement steady at 15 billion gallons preserves a major source of demand for U.S. corn used in ethanol production. Expanding access to year-round E15 would allow higher ethanol blends to be sold throughout the year and could strengthen ethanol demand beyond the current 15-billion-gallon mandate. That policy change remains separate from the finalized RVOs.
Growth in biomass-based diesel obligations supports demand for soybean oil and other fats and oils as feedstocks for renewable diesel and biodiesel production. Higher RVOs for this category reflect recent capacity additions and industry investment in low-carbon fuels, and they are expected to support soybean and soybean oil markets. Advanced biofuel growth will also increase demand for waste oils, animal fats and a range of crop-based inputs.
Redistributing waived small refinery gallons into future RVOs is intended to reduce uncertainty that has lingered in biofuel and agricultural markets. By reallocating 0.99 billion and 1.04 billion gallons into 2026 and 2027 obligations respectively, EPA aims to preserve overall renewable fuel demand for farmers and biofuel producers while smoothing compliance expectations for obligated parties.
Market implications
EPA’s final rule raises the program’s overall scale while postponing import RIN restrictions until the 2028 compliance year, leaving room for additional adjustments. For U.S. agriculture the rule maintains a baseline for ethanol demand, boosts requirements that support soybean oil use in renewable diesel, and formalizes SRE accounting to restore waived volumes to the market. EPA finalized total renewable fuel volumes at 26.81 billion gallons for 2026 and 27.02 billion gallons for 2027.
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