BY TAMMIE SLOUP
Significant increases in proposed renewable volume obligations (RVOs), as well as preference for domestic feedstocks will help provide market certainty for farmers and strengthen long-term demand for corn and soybeans, Illinois Farm Bureau President Brian Duncan wrote in comments to the U.S. Environmental Protection Agency (EPA).
Following the June release of proposed higher biofuel volume requirements for 2026 and 2027, EPA requested comments on the proposed rule, which includes a surprise surge in biomass-based diesel volumes as well as regulatory changes.
Overall, the proposal increases the amount of biofuels that oil refiners must blend into the nation’s fuel mix over the next two years under the Renewable Fuel Standard (RFS). EPA set the total biofuel blending volumes at 24.02 billion gallons in 2026 and 24.46 billion gallons in 2027. That compares with blending requirements of 22.33 billion gallons in 2025. Biomass-based diesel blending requirements jump from 3.35 billion gallons in 2025 to 5.61 billion and 5.86 billion gallons in 2026 and 2027, respectively.
“Biofuel regulated under the RFS contributes to a vital and ever-expanding market for our members, supporting both commodity prices and rural economic development,” Duncan wrote. “Specifically, the increased volume requirements for BBD will help address ongoing challenges in the soy biodiesel industry. Recently, a lack of clear regulatory direction has hindered biodiesel production, forcing some biodiesel plants to operate below capacity or completely idle.”
IFB also believes RVO levels should be announced on a two-year rotation.
“A biennial schedule provides greater predictability and enables U.S. EPA to make informed decisions based on current and future production capacity,” Duncan wrote. “Extending the timeline between announcements creates an unnecessary risk that fails to account for new biofuel plants that come online after a specific rule is set, limiting the program’s responsiveness to market developments.”
Historically, the RFS was a “one dial” system, where the only changes to the program were increasing or decreasing volumes. EPA is proposing a second dial that relates to the value of a Renewable Identification Number (RIN) based on whether the biofuel is from domestic or foreign sources. Specifically, foreign biofuels and feedstocks are only being provided 50% of the value relative to domestic biofuels and feedstocks.
“The modification to RIN values for imported clean fuels and imported feedstock used to produce them marks an important step toward restoring market balance, supporting Illinois farmers, and garnering U.S. energy independence,” Duncan wrote.
The growing reliance on imported feedstocks, specifically used cooking oil and tallow, has had a significant impact on the non-cellulosic advanced biofuel sector, Duncan noted. According to rulemaking analysis, almost 50% of non-cellulosic advanced biofuel was either imported or produced from imported feedstock in 2024. This shift away from U.S. grown vegetable oils has impacted smaller biodiesel facilities, as well as domestic commodity markets.
Notably, EPA did not specifically address 195 pending small refinery exemption (SRE) petitions in its proposed rulemaking, but noted in its proposal the agency is developing a new approach to evaluating SRE petitions.
The treatment of the pending SREs will play a crucial role in the overall effectiveness of the 2026 and 2027 RFS, and IFB appreciates the proposed RVOs account for projected SREs likely to be granted. This strategy helps minimize disruption in the RIN and commodity markets, while supporting the soundness of the RFS.
“However, that does not underscore the concerning trend in which SREs are increasingly used to avoid compliance, rather than to address a unique circumstance. As the pending SRE petitions are reviewed, IFB urges U.S. EPA to take a careful, evidence-based approach to granting exemptions so the original intent of the RFS is protected,” Duncan wrote.
Duncan also encouraged removal of renewable electricity from the RFS program and urged expanding pathways for sustainable aviation fuel and carbon capture and storage.
“Biofuels play a crucial role in supporting American agriculture by fostering a strong and consistent demand for domestically grown feedstocks,” Duncan wrote. “Renewable fuels also support rural economies by driving investment in infrastructure and creating jobs.”