The Environmental Protection Agency has finalized its Renewable Fuel Standard Set 2 rule for 2026 and 2027, boosting biodiesel targets and reallocating 70 percent of waived blending obligations tied to small refinery exemptions. The move strengthens demand for biofuels while aiming to keep credit markets stable. Higher biomass-based diesel volumes, combined with the reallocation, could push requirements to roughly 9.07 billion RINs in 2026 and 9.20 billion in 2027. The agency also delayed a rule cutting Renewable Identification Number values for imported feedstocks until 2028, giving markets more time to adjust. At the same time, renewable electricity was removed from eligibility, narrowing the program’s focus to liquid and gaseous fuels. EPA officials say the changes reinforce domestic biofuel production while maintaining a “stable and functioning credit market.” Analysts expect the rule to support soybean oil demand and tighten RIN markets, while increasing compliance costs for some refiners. Overall, the policy signals a more demand-driven approach heading into 2026 and 2027, with stronger support for U.S. biofuel producers and agricultural feedstocks.
