EPA Fine-Tunes Biofuel Mandates for 2026 Greener Fuels
Published Date: 4/1/2026
Rule
Summary
The EPA just set new rules for renewable fuels in 2026 and 2027, including how much biofuel must be used. They’re also easing the 2025 cellulosic biofuel goals because production fell short and dropping renewable electricity as a qualifying fuel. These changes affect fuel producers and sellers, kick in mostly by mid-2026, and aim to keep America’s fuel cleaner and greener without breaking the bank.
Analyzed Economic Effects
7 provisions identified: 2 benefits, 2 costs, 3 mixed.
New 2026–2027 Renewable Fuel Volumes
The EPA established final renewable fuel volume requirements and percentage standards for 2026 and 2027 that are over 15 percent higher than the volumes set for 2023–2025. The agency projects about 21.87 billion gallons supplied in 2026 and 22.25 billion gallons in 2027, and the rule implies a conventional renewable fuel volume requirement of 15 billion gallons each year.
70% Reallocation of Small Refinery Exemptions
EPA is reallocating 70 percent of the renewable volume obligations (RVOs) exempted for 2023–2025 due to small refinery exemptions into the 2026 and 2027 compliance years. The partial reallocation is intended to reduce negative impacts on biofuel demand in 2026 and 2027 while preserving carryover RIN liquidity.
Partial Waiver of 2025 Cellulosic Requirement
EPA used its cellulosic waiver authority to reduce the 2025 cellulosic biofuel volume from 1.38 billion RINs to 1.21 billion RINs, reflecting a 0.17 billion RIN shortfall, and made cellulosic waiver credits (CWCs) available for 2025 compliance. This adjusts the 2025 percentage standard for cellulosic biofuel accordingly.
Removal of Renewable Electricity (eRINs)
EPA is removing renewable electricity as a qualifying renewable fuel under the RFS program, including deleting the definition of "renewable electricity," the renewable electricity pathways in 40 CFR 80.1426, and the related facility registration and RIN-generation provisions. EPA is also withdrawing its December 2022 proposal on renewable electricity.
No RINs for Process Heat or Electricity Use
The final rule clarifies that RINs cannot be generated for renewable fuel that is used for process heat or electricity generation. Only renewable fuel used as transportation fuel can generate RINs under the RFS program.
New Equivalence Values for Certain Fuels
EPA is specifying new equivalence values for renewable diesel, naphtha, and jet fuel, which change how many RINs are generated per unit of those fuels. These equivalence values affect how compliance obligations and RIN generation are calculated for those fuel types.
Biogas Measurement Flexibility and Clarifications
EPA is clarifying and providing flexibility for how biogas, renewable natural gas (RNG), and renewable CNG/LNG are measured, sampled, and tested to demonstrate compliance, and is making technical clarifications about RNG batch definitions, RIN generation/assignment/separation, registration, and attest engagement requirements for biogas producers and separators.
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