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US mandates record-high biofuel use: Update 2

US mandates record-high biofuel use: Update 2

Updates with details from final regulatory text New York, 27 March (Argus) — The US will require record-high biofuel use over the next two years, boosting soybean farmers and alternative diesel producers at the expense of oil refiners that warned of higher pump prices. Oil refiners will have to bring billions more gallons of biodiesel and renewable diesel to market in 2026 and 2027, according to new blend requirements released by President Donald Trump's administration Friday. The mandates for biomass-based diesel this year alone are more than 60pc above targets in the category last year, the biggest annual step change in program history. The requirements come as Trump and Republicans in Congress see more support for biofuels as one way to help farmers hurt by trade wars and rising input costs. They also come at the same time as war in the Middle East has pushed up the cost of oil products, raising interest in alternatives like biofuels. Requiring "the highest volumes of renewable fuels in history" will create rural jobs and "massively increase our nation's energy supply", Trump said at a White House event. The Environmental Protection Agency (EPA) requires oil refiners and importers to annually blend different types of biofuels or buy Renewable Identification Number (RIN) credits from those that do. Traders expecting high quotas had already boosted the price of RINs — and key renewable diesel inputs like soybean oil — to multiyear highs this week. Friday's final rule includes a record-high mandate of 26.81bn RINs from total renewable fuel blending in 2026 and 27.02bn RINs in 2027, though fewer RINs per gallon next year for some fuels mean those future requirements are even more ambitious than they first appear. EPA sets total blend requirements and requires that a portion come from lower-carbon "advanced" biofuel types including biomass-based diesel. A gallon of corn ethanol generates one RIN, while more energy-dense fuels like renewable diesel earn more. Other updates show the Trump administration siding clearly with farmers over refiners. Larger oil companies, for instance, will have to blend more biofuels to offset the demand hit from recently generous program exemptions for some small refining rivals. Spread over the next two years, the added mandate of more than 2bn RINs equals around 70pc of biofuel volumes expected to be exempted from 2023-2025 blend quotas, higher than other options EPA considered. The administration did punt an earlier plan to penalize imports, which would have been one of the most substantial and legally contested reforms in program history. While the final rule includes few more details, EPA expects to implement some version of that provision — which could mean foreign biofuels and feedstocks receive half the RINs as domestic product — starting in 2028. Farm groups have pushed regulators to do more to restrict inputs that compete with US crops, including recycled cooking oil that major renewable diesel plants bring in from countries like China. Refiners had lobbied the administration this month to shift course, warning that higher mandates would spill into retail fuel prices already rising because of war in the Middle East. With affordability concerns top of mind for voters ahead of this year's midterm elections, the possibility of higher food and fuel prices presents political risk for Republicans. "It's baffling, with fuel prices already rising due to the conflict in Iran, that EPA is finalizing a rule that will make things far worse for consumers", said Chet Thompson, president of the American Fuel & Petrochemical Manufacturers, a group usually on board with Trump's energy policy. The mandates are certain to draw legal challenges, potentially from refiners or environmental groups. But as courts debate the details, the quotas are likely to support continued growth in not just US biofuel production but feedstock processing as well. Crop trading giants like Bunge and Cargill have invested heavily in new soybean and canola crush facilities, hoping to supply more vegetable oils to biofuel plants. Biomass-based diesel wins more than other fuels While the mandates will also support production margins for other biofuels, domestic demand for corn ethanol — the most widely used biofuel in the US — depends more on Congress. Lawmakers have struggled for months to reach a compromise on legislation that would permanently exempt a higher-ethanol gasoline blend from smog rules that currently limit summertime sales. Trump said Friday he was trusting legislative leaders to soon reach a deal. Gasoline stations can continue supplying fuel with up to 15pc ethanol this summer, more than the typical 10pc blend, because of temporary emergency regulations that the Trump administration started issuing this week. But so-called "E15" is still not sold at most US retail outlets. Renewable diesel production capacity in the US, already at record highs and growing, has boomed in part because the biofuel has fewer blend limits. By Cole Martin Final renewable volume obligations bn RINs 2025 2026 2027 Cellulosic biofuel 1.21 1.36 1.43 Biomass-based diesel 5.36* 9.07 9.20 Advanced biofuel 7.33 11.10 11.32 Total renewable fuel 22.33 26.81 27.02 *2025 biomass-based diesel mandate set in gallons, converted here to RINs Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.