On March 27, 2026, President Trump announced that the US Environmental Protection Agency (EPA) had finalized the historic Renewable Fuel Standard (RFS) “Set 2” final rule, which the Administration says "realigns the program with Congress’s original intent—increasing the use of homegrown American biofuels—putting American farmers first and promoting American energy independence."
In the 20th year of the RFS program, the ‘Set 2’ Rule establishes the renewable fuel volume requirements, so-called Renewable Volume Obligations (RVOs), for 2026 and 2027 compliance years at the highest levels in program history. It also includes finalizing a 70 percent partial reallocation of the 2023–2025 granted small refinery exemptions (SREs).
President Trump promised a Golden Age of American agriculture. Once again, his administration is delivering. Overall, ‘Set 2’ creates a larger, more stable, and more reliable domestic market for U.S. crops, strengthening farm income and rural economies. For 20 years, this program has diversified our nation’s energy supply and advanced American energy independence. EPA is proud to deliver on this mission and to do so at historic levels, said EPA Administrator Lee Zeldin.
To meet the historic 2026 and 2027 volume levels, EPA estimates that biodiesel and renewable diesel production and use will need to increase by over 60 percent compared to 2025 volumes, the last year of the Biden-Harris administration’s “Set 1”. This, in particular, will drive renewed demand for American soybean producers.
With the benefits “Set 2” will bring to America’s farmers, the EPA estimates that the rule will generate over US$10 billion for rural economies and create over 100,000 new jobs in the agricultural and manufacturing sectors.
To provide continued certainty for American corn growers and ethanol producers, EPA will maintain the 15 billion conventional biofuel level for 2026 and 2027.
Today’s announcement is truly historic for our nation’s farmers and energy producers. These numbers represent the highest levels of biofuels ever required to be blended into our fuel supply. With President Trump and Administrator Zeldin’s leadership, these historically high volumes are expected to create a US$3 to US$4 billion increase in net farm income. The Renewable Fuel Standard Set 2 Rule will create a US$31 billion value for American corn and soybean oil for biofuel production in 2026, which is US$2 billion more than in 2025. Our farmers are stepping up to grow American energy dominance, said US Secretary of Agriculture Brooke L. Rollins.
According to the EPA, the priority “Set 2” places on expanding the use of American-made ethanol, biodiesel, and renewable diesel in the marketplace will reduce the nation’s dependence on foreign oil by roughly 300,000 barrels of oil per day over 2026 and 2027.
Furthermore, the Trump EPA has removed “renewable electricity” from the RFS program in a bid to restore the RFS program to “align with the plain language of the Clean Air Act (CAA)”, while “taking action to end the efforts to push EVs onto the American people.”
Volume obligations must translate into real-world demand
Responding to the EPA announcement, the American Coalition for Ethanol (ACE) CEO Brian Jennings welcomed the highest-ever RVOs.
We’ve consistently advocated for strong final blending obligations for 2026 and 2027, reflecting the full potential of the RFS and ensuring small refinery exemptions (SREs) do not erode demand for renewable fuels. It is critical that EPA set blending requirements at levels that fully account for any SREs granted. Failing to do so risks undermining the intent of the RFS by allowing obligated parties to rely on surplus Renewable Identification Numbers (RINs) rather than driving actual blending and use of renewable fuels, Brian Jennings said.
However, Jennings emphasised that the integrity of the RFS depends on ensuring that the RVOs translate into real-world demand.
Any gap between required volumes and actual blending undermines the program and creates uncertainty for ethanol producers, farmers, and rural communities. Importantly, EPA has the authority to set volumes that require more than 15 billion gallons of conventional biofuels annually. We would encourage EPA to seriously consider higher volumes next year to account for any negative impact from SRE gallons not being fully reallocated and for potential E15 increases. When properly implemented, the RFS strengthens US energy security, supports America’s farmers and rural communities, saves consumers money at the pump, and cleans the air for everyone. ACE remains committed to working with EPA and the Administration to ensure the program delivers on these goals, including as the Agency begins developing future volume requirements for 2028 and beyond, Brian Jennings said.
Constrains domestic fuel production and undercuts farmer opportunities
American Biogas Council (ABC) Executive Director Patrick Serfass expressed concern and disappointment with EPA’s final RVOs for 2026 and 2027, as they constrain biogas growth.
EPA’s final rule fails to represent real-world biogas growth, which will constrain markets. The action especially undercuts opportunities for livestock farmers, impeding one of the most reliable ways farmers can keep pace in a low-margin agriculture industry and contribute to America’s energy dominance, said Patrick Serfass.
Patrick Serfass noted that in this set of fuel targets for 2026 and 2027, the agency “diverged from longstanding methods and abandoned statutory guidelines” when they estimated D3 RIN volumes on projected renewable natural gas (RNG) end-use constraints rather than what the US biogas industry can produce – and even with this new approach, the agency has also significantly underestimated real-world demand.
This approach looks to constrain domestic, renewable fuel production, a foundation of RFS goals. Instead of supporting US fuel industries, which recycle organic residues and more fully utilise American crops. Biogas systems on American farms convert waste into reliable, domestic energy and nutrient-rich soil amendments. When EPA undershoots the RNG market, it directly diminishes economic opportunities for anyone trying to turn these wastes into value. And the way the RFS market works, the impact on US farms may be the worst, Patrick Serfass said.
Serfass also pointed out that the delay in issuing this rule has already slowed project development, raised financing costs, and stalled rural investment at a time when demand for domestic energy is rising.
Adding to the disappointment, in this final rule, EPA failed to reallocate credits from waivers to the D3 RIN targets, which further diminishes the fuel targets, and has recinded on biogas-to-electricity eligibility.
The data are clear: D3 RIN production has, on average, grown 20 percent every year since 2020, with 2024 representing record growth of 31 percent. By comparison, the final RVOs represent a mere 12 percent and 5 percent growth rate, for 2026 and 2027, respectively. The Set 3 rulemaking is around the corner, and it’s EPA’s opportunity to correct course. The agency should set D3 volumes that reflect actual production, support continued growth, and fully unlock biogas as a reliable source of American-made energy, fertiliser, and income for farmers, rural communities, and any sector with organic waste available to be recycled, concluded Patrick Serfass.
