RFS 2.0: Refiners, Farmers and Ethanol Producers Need to Know

On June 13, 2025, the EPA under the current administration announced a major proposed boost to the Renewable Fuel Standard for 2026 and 2027. Pending final sign-off, the plan is designed to spur U.S. biofuel output, cut dependence on imported feedstocks and crude, and trim oil imports by roughly 150,000 barrels per day. Key proposed volumes include:

• Overall biofuel blending: 24.02 billion gallons in 2026 and 24.46 billion in 2027 (up from 22.33 billion in 2025)
  
• Biomass-based diesel: 5.61 billion gallons in 2026 and 5.86 billion in 2027 (a roughly 67–75 percent rise)
  
• RIN tweaks: Biodiesel RINs per gallon cut from about 1.6 to 1.27–1.28 to discourage imports and prioritize U.S. feedstocks

Opportunities and Obstacles: Benefits Abound, But So Do Challenges

Clients have been asking how these tougher blending targets will ripple through energy and commodity markets, and the effects promise to be far-reaching.

For refiners, new standards mean upfront capital outlays, tighter compliance burdens, and complex logistics. To meet higher biofuel quotas, facilities will need to retrofit or expand blending pumps, storage tanks, and quality-control systems or else buy additional RIN credits, which now carry more value when tied to U.S.-sourced fuels. As imported RINs lose appeal, domestic credits become more attractive, reshaping trading strategies. 

Meanwhile, over 160 small-refinery exemption requests are pending, adding another layer of uncertainty. And although marginally higher blend levels could push fuel prices up, regulators maintain that gains in rural prosperity and energy security will more than justify any incremental cost.

For biofuel producers and farmers, rising demand offers a strong tailwind: ethanol and biodiesel plants, especially those sitting idle, stand to ramp up output, backed by clearer investment signals. 

Yet higher feedstock prices and intensifying environmental scrutiny mean producers must balance expansion with sustainability. Early market reactions reflect this dynamic: soybean-oil prices have already climbed on the rule’s announcement, and corn prices historically jump 12–30% when ethanol mandates rise, good news for growers.

In rural communities, the influx of jobs in farming, crushing facilities, and biofuel plants could spur local economies, plus wider boosts for equipment vendors, transport services, and construction. But these benefits come alongside questions of environmental impact and equitable growth issues..

Weighing Environmental and Socioeconomic Trade-Offs

• Food vs. fuel: Stronger corn and soybean demand can tighten grocery markets. Research offers mixed verdicts on the magnitude of food-price impacts.
  
• Ecological footprint: Expanded cropland and fertilizer use risk higher greenhouse-gas emissions and water pollution. Some lifecycle analyses even cast doubt on corn ethanol’s climate benefit once land-use changes are factored in.
  
• Trade realignment: By making imported biodiesel less attractive, the rule lifts U.S. farmers—but may reshape global feedstock flows, especially in the Midwest, where import fears have sparked protests in the past.

How Refiners Should Gear Up

1. Lock in U.S. supplies. Audit current inventories, renegotiate contracts, and forge partnerships with domestic biofuel producers.
   
2. Plan infrastructure upgrades. Identify where new pumps, tanks and lab equipment are needed to meet higher blend volumes.
   
3. Optimize RIN management. Upgrade systems to track, trade and retire credits in real time, minimizing penalties and maximizing value.
   
4. Stay policy-alert. Monitor EPA’s waiver rulings, legal challenges and any adjustments to final volume levels or RIN formulas.

Meeting 2026–2027 Biofuel Mandates: Technology Today

With the U.S. biofuel sector growing in complexity, energy and agricultural firms alike need integrated tools to ensure compliance, streamline operations, and optimize their supply chains. 

A unified platform that handles both grains and liquids, covering trading, risk management, logistics, and day-to-day operations, will be essential. Partnering with an E/CTRM provider that offers the following capabilities can make all the difference:

1. Domestic Feedstock Supply-Chain Optimization

As imports become less attractive, refiners and producers must shift toward U.S.-sourced ethanol, biodiesel, soybean oil, and other inputs. Advanced analytics should enable you to:

• Pinpoint top domestic suppliers based on location, cost, and sustainability ratings.
  
• Optimize transportation routes to cut logistics expenses and guarantee on-time deliveries.
  
• Forecast availability by analyzing harvest projections, crushing capacity, and seasonal patterns.
  

2. Real-Time Compliance Monitoring

Navigating the RIN market and meeting blend requirements is tougher than ever. A robust compliance dashboard will let you:

• Track RINs live from generation through trading to retirement.
  
• Receive instant alerts when blend thresholds, deadlines, or credit balances approach critical levels.
  
• Reference built-in EPA guidelines to reduce the risk of non-compliance.
  

3. Infrastructure Planning and ROI Modeling

Higher blend mandates often demand new or upgraded blending, storage, and transport assets. Your technology should help you:

• Calculate ROI for new builds or retrofits of biofuel handling facilities.
  
• Simulate blend scenarios (e.g., B20, E85) at each plant to match regional demand profiles.
  
• Project the long-term benefits of infrastructure investments under various policy trajectories.
  

4. Market Intelligence for Competitive Edge

Policy shifts create windows of opportunity, but only if you have timely, accurate data. Essential market-intelligence features include:

• Price forecasts for corn, soybean oil, renewable diesel, and RIN credits.
  
• Policy-watch alerts that track EPA rulemakings, international trade developments, and relevant court rulings.
  
• Peer benchmarking to see how competitors are adjusting their strategies.

Path Forward

Although the rule must still clear the public comment phase and could be revised before it’s finalized, it nonetheless represents a significant turning point. Refiners will need to revisit their fuel strategies, producers must boost domestic output, and rural economies stand to gain a powerful lift.

Now is the moment for every link in the energy and commodity trading chain to audit their processes. Only by arming themselves with the right data, technology, and insights can businesses pivot swiftly, seize new opportunities, and enhance their bottom line.