US EPA proposes higher biofuel blending volumes through 2027

Donald Trump's administration on Friday proposed to increase the amount of biofuels that oil refiners must blend into the nation's fuel mix over the next two years, driven by a surge in biomass-based diesel mandates.

The Trump administration has proposed a significant increase in biofuel blending requirements for oil refiners over the next two years, driven by a surge in biomass-based diesel mandates. The Environmental Protection Agency (EPA) outlined a plan that would raise total biofuel blending volumes to 24.02 billion gallons in 2026 and 24.46 billion gallons in 2027, compared to the 22.33 billion gallons required in 2025 [1].

The proposal, which aims to limit the Renewable Fuel Standard to liquid fuels and discourage biofuel imports, has been welcomed by Iowa politicians and agricultural leaders. U.S. Sen. Chuck Grassley, an Iowa Republican and member of the Agriculture Committee, praised the proposal, stating that it delivers a victory for American energy security and supports American agriculture [1]. Iowa Agriculture Secretary Mike Naig also expressed support, highlighting the potential for increased growth in the biofuel industry [1].

The EPA's proposal includes specific targets for biomass-based diesel, setting a quota of 7.12 billion biomass-based diesel RINs for 2026 and projecting a blending of 5.61 billion gallons. This represents a significant increase over the 2025 volume mandate of 3.35 billion gallons [1]. The proposal also aims to reduce the number of RINs that could be generated from imported biofuels, potentially benefiting domestic producers [1].

The announcement has had a positive impact on biofuel stocks, with shares of Green Plains (NASDAQ:GPRE) and FutureFuel posting gains on Friday. Grain-handling stocks such as Bunge (NYSE:BG) and Archer-Daniels-Midland also climbed following the news [2].

The increase in mandated volumes could translate into higher demand for ethanol, biodiesel, and other renewable fuels, benefitting producers and related supply chains. Secretary of Agriculture Brooke Rollins emphasized the importance of the Renewable Fuel Standard for American corn and soybean farmers and the administration's commitment to expanding the domestic market for biofuels [2].

This proposal signals a shift in federal biofuel policy and aligns with the administration's support for the biofuels industry. The proposal is expected to be a significant boost for Iowa, the nation's leading producer of ethanol and biodiesel [1].

References:
[1] https://www.desmoinesregister.com/story/money/agriculture/2025/06/13/trump-administration-biofuel-increase-iowa/84187418007/
[2] https://www.investing.com/news/commodities-news/biofuel-stocks-rise-on-trump-admins-plan-to-boost-biofuel-blending-4095380