Trump biofuel push collides with lagging US plant output
EPA’s $31 billion RFS target collided with May biodiesel output at 77% of capacity, leaving the market short of the volume needed to hit the mandate.
EPA on March 27 finalized 2026 and 2027 Renewable Fuel Standard volumes, setting up a $31 billion corn and soybean oil market for 2026 even as U.S. biodiesel plants ran below the agency’s assumptions.
The final rule, the highest volume requirement in the program’s history, included a 70% reallocation of small refinery exemptions granted for 2023 through 2025. EPA said the Set 2 rule would support about $2 billion more in biofuel feedstock demand in 2026 than in 2025, a change aimed at backing President Donald Trump’s promises to farmers and rural communities with higher mandated use of domestic oils.
The problem is output. U.S. biodiesel producers operated at about 77% of capacity in May 2026, well below the 90% utilization rate EPA built into its mandate math. That same month, the industry generated 736 million biomass-based diesel RINs, short of the roughly 915 million needed each month to stay on pace with EPA’s assumptions.
That gap leaves refiners exposed to a tighter compliance market and makes the administration’s biofuel ambitions harder to translate into physical barrels. The 2026 biomass-based diesel mandate implies a production increase of more than 60% from the prior year, a jump that would require more feedstock, more logistics and more plant uptime than the sector is delivering now.
American Fuel & Petrochemical Manufacturers has already challenged the 2026-2027 rule in court and pressed lawmakers to reconsider the mandate, arguing the new volumes are costly and could raise fuel prices. The trade group has framed the rule as the most expensive regulation of Trump’s second term, a warning that the compliance burden could fall quickly on refiners if plant output stays near May levels.
EPA had first proposed the 2026-2027 volumes on June 13, 2025, but the March final rule locked in a much steeper path for the industry. The fight now sits between political targets and industrial capacity: federal volumes have moved higher, but the biodiesel and renewable diesel fleet has not yet shown it can run fast enough to meet them.
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