The US biofuels industry is at a pivotal juncture as advocacy groups, including the National Oilseeds Processors Association (NOPA), Clean Fuels Alliance America, and the American Soybean Association, press the Environmental Protection Agency (EPA) to set ambitious 2026 Renewable Fuel Standard (RFS) volumes.
These groups are calling for a biomass-based diesel (BBD) volume of at least 5.25 billion gallons, supported by a commensurate increase in advanced biofuel volumes.This push is underpinned by a NOPA-commissioned feedstock study, which demonstrates that US domestic feedstocks can support 5.3 billion gallons of BBD production in 2026 and 6.7 billion gallons by 2030. The report highlights significant investments in domestic biofuel production and feedstock supply, including a $6 billion expansion in US oilseed crushing capacity.
Renewable Fuel Standard (RFS) and Biomass-Based Diesel (BBD) Volumes
- Advocacy groups are urging the EPA to set 2026 RFS volumes at 5.25 billion gallons for BBD, with a corresponding increase in advanced biofuel volumes. This target aligns with the industry’s capacity and feedstock availability, as demonstrated by NOPA’s feedstock study.
- The study projects that US domestic feedstocks can support 5.3 billion gallons of BBD in 2026 and 6.7 billion gallons by 2030, ensuring sustainable growth in biofuel production without compromising food and feed supply chains.
Feedstock Availability and Crushing Capacity Expansion
- The US oilseed processing industry has invested $6 billion to expand crushing capacity by 25% relative to 2023 levels. This expansion is critical to meeting the growing demand for biofuel feedstocks, including soybeans, canola, and rendered fats.
- In 2023, domestic and imported feedstocks supported the production of 4.3 billion gallons of BBD, surpassing the renewable volume obligations for 2023, 2024, and 2025. This underscores the industry’s ability to scale production in line with policy targets.
Economic and Environmental Benefits
- Increased BBD production supports rural economies by creating demand for agricultural feedstocks and driving investment in domestic manufacturing. It also enhances energy security by reducing reliance on fossil fuels.
- Biodiesel, renewable diesel, and sustainable aviation fuel (SAF) are essential to decarbonizing the transportation sector. Setting ambitious RFS volumes for 2026 and beyond will accelerate the transition to clean energy and help the US achieve its climate goals.
Policy Implications and Industry Growth
- The EPA’s previous RFS volumes have been criticized for being set below industry capacity, creating uncertainty and limiting growth. Advocacy groups are calling for a policy framework that reflects the industry’s capabilities and provides a clear pathway for expansion.
- Consistent growth in RFS volumes for 2027 and beyond will incentivize further investment in biofuel production and feedstock supply, ensuring that American consumers have access to affordable and sustainable transportation options.
- Stakeholders should continue to engage with policymakers to ensure that 2026 RFS volumes are set at levels that reflect industry capacity and feedstock availability. This will provide certainty for investors and support long-term growth in the biofuels sector.
- Expanding crushing capacity and diversifying feedstock sources (e.g., soybeans, canola, rendered fats) will be critical to meeting future demand for BBD. Investments in agricultural innovation and sustainable farming practices can further enhance feedstock availability.
Leverage the Grain-Fuel Nexus
- The grain-fuel nexus presents significant opportunities for synergies between agriculture and energy. Stakeholders should explore integrated strategies that maximize the value of agricultural feedstocks while supporting the transition to renewable energy.
- The biofuels industry is heavily influenced by polic and market dynamics. Traders and investors should closely monitor developments in RFS volumes, feedstock prices, and global energy markets to identify opportunities and mitigate risks.
Promote Sustainable Aviation Fuel (SAF)
SAF represents a growing market for biofuels, with significant potential to reduce emissions in the aviation sector. Stakeholders should prioritize investments in SAF production and advocate for policies that support its adoption.
GrainFuel Nexus® stands ready to provide in-depth insights and strategic guidance to clients aiming to capitalize on these emerging opportunities.
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