EPA Finalizes RFS Rule

March 27, 2026 by Energy Marketers of America | comments

Regulatory Alert

EPA Finalizes RFS Rule

EMA Regulatory Counsel Contacts: Jeff Leiter and Jorge Roman

Friday, March 27, 2026 – EPA finalized today its Renewable Fuel Standard (RFS) “Set 2” rule, establishing renewable fuel volume requirements for 2026 and 2027 at the highest levels in the program’s 20-year history. EPA also said it will reallocate 70% of the Renewable Volume Obligations (RVOs) for volumes subject to Small Refinery Exemptions (SREs). EMA has not yet analyzed the text of the actual final RFS rule; however, the following are key provisions from the agency’s press release.

Record-High Volume Requirements: The 2026 and 2027 RVO levels are the most ambitious in the history of the RFS program. To meet these volumes levels, EPA will require 26.81 billion Renewable Identification Numbers (RINs) of renewable fuel in 2026 and 27.01 billion RINs in 2027. The agency estimates that biodiesel and renewable diesel production will need to increase by more than 60 percent compared to 2025 levels. At the same time, EPA is maintaining the 15-billion-gallon conventional biofuel (ethanol) volume for both 2026 and 2027, providing continued certainty for corn growers and ethanol producers.

SRE Reallocation: EPA is finalizing a 70 percent partial reallocation of RVOs exempted under SREs for the 2023–2025 compliance years, applied to the 2026 and 2027 compliance periods. EPA said that its approach is intended to ensure that exempted gallons do not materially undermine the overall renewable fuel targets while maintaining a stable RINs market.

Foreign Feedstock Penalty (Effective 2028): Beginning in 2028, foreign fuels and feedstocks will receive only half the RINs value of domestically produced products, providing domestic biofuel producers a transition period while prioritizing American agricultural feedstocks. Combined with the increase in RVOs, EPA believes that U.S. dependence on foreign oil will be reduced by some 300,000 barrels per day over 2026 and 2027.

Electric Vehicle Carve-Out Eliminated: The final rule removes “renewable electricity” from RFS compliance eligibility, reversing the Biden administration’s RFS framework that had allowed EV charging stations to generate RINs. EPA has determined this use was inconsistent with the Clean Air Act’s focus on liquid transportation fuels.

EMA will provide a more in-depth analysis of the final rule once the rule text is available.