EPA’s Next Biofuels Battle: Attention Turning to 2028 RFS Volumes, Other Details
Proposed Renewable Fuel Standard Targets for 2028 and perhaps beyond could shape farm income, soybean demand and biofuel investment for the next decade
While the biofuels industry is still digesting EPA’s finalized Renewable Fuel Standard (RFS) volumes for 2026 and 2027, attention is rapidly shifting toward the agency’s next major rulemaking: proposed Renewable Volume Obligations (RVOs) for 2028 and perhaps beyond. For agriculture, the forthcoming proposal could ultimately prove more consequential than the volumes finalized this year because it will establish the first set of targets under a dramatically different policy framework.
EPA’s March 2026 rule set renewable fuel blending requirements through 2027, but the agency is currently working on their proposal covering 2028 and potentially multiple years thereafter. The timing is important because several major policy changes embedded in the current rule do not take effect until the 2028 compliance year.
Most notably, EPA finalized provisions that reduce the value of Renewable Identification Numbers (RINs) generated from imported biofuels and foreign feedstocks beginning in 2028. The change was designed to favor domestic feedstock production and processing, a move strongly supported by many farm groups, soybean organizations and domestic biofuel producers. However, it also means EPA must now determine how much renewable fuel demand can realistically be generated under a market structure that places greater emphasis on U.S.-produced feedstocks.
Details: Under the new framework, renewable fuels produced from imported feedstocks — or imported as finished fuels — will generate only half the RIN value compared to fuels produced from qualifying domestic feedstocks. In practical terms, a renewable diesel producer using imported used cooking oil, imported canola oil, imported soybean oil, or other foreign-origin feedstocks will receive fewer compliance credits than a producer using U.S.-grown soybeans, corn oil, animal fats, or other domestic feedstocks.
EPA’s rationale is straightforward: the agency argues that the RFS was intended to promote U.S. energy security, domestic agricultural production, and American biofuel manufacturing. Over the past several years, rapidly growing renewable diesel production created a surge in demand for feedstocks, leading many producers to rely increasingly on imported used cooking oil from Asia, imported tallow, and other foreign feedstocks. Critics argued that federal incentives designed to support U.S. farmers were increasingly benefiting overseas suppliers instead.
That decision carries significant implications for agriculture. Over the past several years, soybean crush capacity has expanded aggressively across the Midwest as companies invested billions of dollars in facilities designed to meet growing renewable diesel demand. Much of that investment was made with the expectation that federal biofuel policies would continue encouraging higher consumption of soybean oil and other domestic feedstocks.
The next RVO proposal will be the first major test of whether EPA intends to maintain that growth trajectory. If the agency establishes aggressive biomass-based diesel and advanced biofuel targets for 2028 and beyond, it could provide additional support for soybean oil demand, crush margins and farm income. Conversely, if EPA adopts a more conservative approach, questions could emerge about whether recent processing investments will generate the returns anticipated when they were announced.
Another major issue is the interaction between the RFS and the emerging 45Z Clean Fuel Production Credit. The Treasury Department and USDA still have several key implementation decisions pending regarding 45Z, including carbon intensity calculations and feedstock treatment under the updated GREET model. As a result, biofuel producers are increasingly viewing the RFS and 45Z as interconnected policies rather than separate programs.
The challenge for EPA will be determining renewable fuel volumes in a marketplace where tax credits, carbon scoring, feedstock availability and global trade flows are all changing simultaneously. That complexity helps explain why many analysts believe the next RFS proposal may become one of the most closely watched biofuel rulemakings since Congress established the original program.
The debate is also likely to extend beyond volume requirements. Industry stakeholders will be watching for signals regarding small refinery exemptions, treatment of carryover RIN inventories, advanced biofuel categories and EPA’s assessment of long-term domestic feedstock supplies. Each of those factors can materially influence RIN values and producer profitability.
For corn growers, ethanol producers, soybean farmers and renewable diesel companies, the stakes are substantial. The 2026-27 rule largely settled immediate compliance questions. The next proposal will focus on the longer-term future of the biofuels sector and whether federal policy continues to encourage expansion of domestic renewable fuel production.
| EPA could deliver 2028 biofuel mandates more than a year earlyEarly RFS decision would provide unusual market certainty as new imported-feedstock rules take effect Attention in the biofuels sector is increasingly turning toward EPA’s next Renewable Fuel Standard (RFS) rulemaking, with many industry observers expecting the agency to release proposed Renewable Volume Obligations (RVOs) for 2028 and beyond later this summer and potentially finalize them by late October 2026. While the Clean Air Act generally requires EPA to establish annual renewable fuel obligations by Nov. 30 of the year preceding the compliance year, that statutory deadline would not require 2028 volumes to be finalized until Nov. 30, 2027. However, the agency appears interested in providing significantly more advance notice than the law requires, a move that would be welcomed by biofuel producers, refiners, feedstock suppliers and agricultural groups seeking greater regulatory certainty. When EPA finalized the 2026-27 RVO rule earlier this year, EPA Administrator Lee Zeldin emphasized the importance of providing market participants with predictability and sufficient lead time to make investment and production decisions. That commitment has fueled expectations that the agency will move well ahead of statutory deadlines on the next round of mandates. A widely discussed industry timeline would involve EPA issuing a proposed rule during the summer of 2026, followed by a roughly 60-day comment period that could extend into early fall. Public hearings and agency review would likely occur during August and September, setting the stage for a final rule by late October 2026 or shortly thereafter. Such a schedule would provide more than a full year of certainty before the 2028 compliance year begins. That timing is particularly important because 2028 marks the first year that EPA’s newly finalized restrictions on imported biofuels and foreign feedstocks become effective. Under those provisions, as noted above, renewable fuels produced from imported feedstocks or imported as finished fuels will generate fewer compliance credits than fuels produced from qualifying domestic feedstocks, a policy change expected to reshape feedstock procurement decisions throughout the renewable diesel industry. The prospect of an October 2026 final rule is also supported by the fact that EPA already has much of the analytical groundwork in place. The agency recently completed its 2026-27 rulemaking and now possesses extensive data on renewable diesel capacity, ethanol production, feedstock availability, RIN markets and projected fuel demand. Unlike some previous RFS rulemakings that were delayed by litigation, administration transitions or unresolved policy questions, EPA may have a clearer path forward as it develops the post-2027 framework. For agriculture, an early final rule could carry significant market implications. Soybean crushers, renewable diesel producers, ethanol plants and farmers would receive an unusually early indication of future demand trends. If EPA establishes aggressive biomass-based diesel and advanced biofuel targets extending through 2030, markets could begin incorporating those expectations into soybean oil, soybean, corn and feedstock pricing more than a year before the mandates take effect. The largest uncertainty remains whether EPA chooses to establish only 2028 volumes or adopts a broader multi-year package covering 2028 through 2030, similar to previous “Set” rules. A multi-year proposal would likely generate extensive comments from refiners, biofuel producers, farm organizations and environmental groups, potentially lengthening the review process. Nevertheless, if the administration’s goal is maximizing certainty for market participants and encouraging long-term investment, a final rule by October 2026 remains a realistic and increasingly expected outcome. For the agricultural sector, the timing may ultimately prove as important as the volumes themselves. Early clarity on post-2027 renewable fuel mandates would allow producers and investors to make decisions with greater confidence at a time when billions of dollars have already been committed to expanding domestic biofuel and feedstock production capacity. |
As EPA begins developing the post-2027 framework, agriculture’s focus will shift from the volumes finalized today to the demand outlook for the next decade. The agency’s decisions on 2028 RVOs may ultimately determine whether the recent wave of biofuel and soybean-processing investment represents the beginning of another growth cycle or the high-water mark of the renewable fuels boom.
