Since last June, the U.S. Environmental Protection Agency (EPA) has released a series of decisions regarding implementation of the U.S. Renewable Fuel Standard (RFS) for 2026-2027. We analyzed the impact of these decisions on biomass-based diesel production and feedstock use in a series of farmdoc daily articles (October 29, 2025; November 5, 2025; November 12, 2025). The combined effect of higher renewable volume obligations (RVOs), more restrictive small refinery exemptions, and mandatory reallocation creates substantially higher biomass-based diesel requirements and feedstock use for 2026-2027. A particularly controversial part of the EPA proposals is the limitation of imported biofuel and feedstock to 50 percent of the RINs generated by domestic biofuel and feedstock. There has been widespread reporting in recent weeks that the so-called “half RIN” proposal may be eliminated in the final rulemaking to be issued soon and biomass-based diesel RVOs raised to offset this change. The purpose of this article is to project biomass-based diesel production and feedstock use for 2026-2027 without the half-RIN provision and higher biomass-based diesel RVOs.
Analysis
We begin by updating the RVOs for 2026-2027 presented in earlier farmdoc daily articles (October 29; November 5, 2025; November 12, 2025). The RVOs presented in these articles were based on five important EPA rulemakings: i) proposed RVOs for 2026 and 2027 released in June 2025; ii) a comprehensive rulemaking on small refinery exemptions (SREs) over 2016-2024 that was released in July 2025; iii) a reallocation policy framework for small refinery exemptions published in September 2025, iv) a new methodology for projecting obligated petroleum gasoline and diesel volumes released in September 2025, and v) additional SREs granted for 2021-2024 that were announced in November 2025. Two scenarios for reallocation of 2023-2025 SREs in 2026-2027 were presented: 100 percent and 50 percent reallocation. Projected SREs for 2026-2027 were also assumed to be fully reallocated within each compliance year.
Source : illinois.edu