AFPM challenges EPA’s highest-ever renewable fuel volume requirements

The American Fuel & Petrochemical Manufacturers on May 29 asked the U.S. Court of Appeals for the D.C. Circuit to vacate EPA’s Set 2 renewable fuel rule, putting the highest volume mandate in the 20-year history of the Renewable Fuel Standard back into legal limbo just days before it is due to take effect June 15. The case revives uncertainty for refiners, biofuel producers and RIN traders after EPA said the rule was meant to lock in long-term market certainty.

EPA finalized the rule March 27 during a White House Great American Agriculture Celebration announced by President Donald Trump. The final package set 2026 and 2027 renewable volume obligations at 1.36 billion and 1.43 billion RINs for cellulosic biofuel, 9.07 billion and 9.20 billion for biomass-based diesel, 11.10 billion and 11.32 billion for advanced biofuel, and 26.81 billion and 27.02 billion for total renewable fuel. The agency also included a 70 percent reallocation of small refinery exemptions granted for 2023 through 2025, partially waived the 2025 cellulosic biofuel requirement because of a production shortfall, and removed renewable electricity, or eRINs, from the program.

EPA said the rule would strengthen implementation of the RFS, expand domestic biofuels use and support rural economies. The agency estimated it could generate more than $10 billion for rural economies, create over 100,000 jobs and lift the value of American corn and soybean oil for biofuel production to $31 billion in 2026, up $2 billion from 2025.

AFPM, which filed the case in the D.C. Circuit and announced it June 3, said compliance costs recently topped 35 cents per gallon for the first time and argued the Set 2 rule was unlawful and impracticable. The trade group said compliance over two years could exceed $106 billion, equal to 26 cents to 35 cents per gallon of gasoline and diesel supplied to the U.S. market. It also said EPA’s own analysis showed annual costs above $20 billion versus about $400 million in benefits, and warned that without a solvent RIN bank refiners may have to cut transportation fuel supply to stay in compliance.

The D.C. Circuit has consolidated AFPM’s challenge with other suits from the Center for Biological Diversity, Sierra Club, Small Refineries of America, the Coalition for Renewable Natural Gas, Biogas Works for America LLC, Biogas Works Coalition and several refining companies. That leaves the Set 2 rule facing a prolonged legal overhang just as 2026 blending and credit procurement decisions move from policy to operating reality.