The US Environmental Protection Agency (EPA)’s proposal to only allow foreign biofuels and feedstocks to generate 50% of the value of Renewable Identification Numbers (RINs) could stall the growth of the biomass-based diesel industry and lead to higher costs for consumers, according to a report by the Advanced Biofuels Association (ABFA).
RINs are serial numbers used to track the production, use and trading of renewable fuels in the USA.
The EPA move is contained in its proposal for 2026 and 2027 Renewable Volume Obligations (RVOs).
The ABFA report confirmed there was sufficient domestic feedstock to meet the EPA’s projected production volumes of 4.3bn gallons (16.27bn litres) in 2026 and 4.6bn gallons (17.41bn litres) in 2027.
However, the market opportunities are far greater, according to the 22 July report, prepared by GlobalData Agri.
According to estimates from Lipow Oil Associates, US biomass-based diesel demand is expected to reach 7bn gallons (26.49bn litres) by 2027 and grow to 9bn gallons (34bn litres) by 2030.
Meeting that demand would require continued access to global feedstock markets, ABFA said.
The EPA proposal to cut the RIN value in half for fuels made with imported feedstocks would limit overall biomass-based diesel market growth and drive-up consumer prices – despite global supplies being more than sufficient to support expansion of American biofuel innovation, according to the report.
“This rule, as currently drafted, could threaten continued investment, limit consumer access to innovative American-made fuels and artificially drive up prices,” said ABFA president Michael McAdams.
“The EPA has an opportunity to make smart, targeted adjustments that protect consumers and support continued industry growth.”
The study estimated that the policy shift would introduce significant cost pressures across the renewable fuel supply chain.
By reducing credit values for imports, the rule would effectively create a US$250-US$400/tonne premium for domestic feedstocks.
A US$200/tonne rise in US soyabean oil prices could drive up prices by US$0.42, the report said.
These price pressures were expected to draw more domestic feedstocks away from food and other non-biofuel uses, according to the report.
In addition, ABFA claimed the proposal marked a significant departure from longstanding precedent under the Renewable Fuel Standard (RFS) which, under the Clean Air Act, required that biomass-based diesel volumes be stated in actual gallons.
According to ABFA, shifting the basis of compliance from gallons to RINs – and discounting those RINs based on feedstock origin – adds unnecessary complexity and legal uncertainty to the programme.
“EPA’s job is to set targets that reflect what the market can deliver – not to pick winners and losers,” McAdams added. “This kind of sudden upending of the RFS, which has long been the most important piece of legislation supporting domestic biofuel producers, threatens investment, growth and the future of American energy dominance.”
With the agency moving towards a final rule, ABFA has urged the EPA to:
- Increase the biomass-based diesel requirement to at least 5.75bn gallons (21.76bn litres), reflecting real-world capacity and market demand.
- Maintain volume targets in actual gallons, in accordance with the Clean Air Act and past implementation of the RFS.
- Withdraw the proposed 50% devaluation for RINs generated from foreign feedstocks, preserving flexibility and cost-effectiveness in meeting national biofuel goals.
ABFA represents more than 40 member companies in the USA and around the world who develop, produce and distribute advanced biofuels. Collectively, these companies produce 5bn gallons (19bn litres)/year of biodiesel and renewable diesel, including cellulosic heating oil. ABFA also represents distribution firms in the USA.
