The U.S. Environmental Protection Agency on Friday finalized higher biofuel blending obligations for 2026 and 2027, instructing refiners to increase the volume of ethanol and other renewable fuels blended into the nation’s gasoline and diesel pools. The decision requires refiners to either blend more biofuels or purchase compliance credits known as RINs - each typically corresponding to one gallon blended - and has elicited strong responses from both the refining sector and agricultural interests.
The EPA set total obligations at 26.81 billion RINs for 2026 and 27.02 billion RINs for 2027. Those totals incorporate 70% of roughly 2 billion gallons that had been previously waived during 2023-2025 under a program that allows exemptions for small refiners. The finalized numbers are considerably higher than the agency’s June 2025 proposal, which had put total obligations at 24.02 billion RINs for 2026 and 24.46 billion RINs for 2027 and had not taken a position on the extent to which previously waived volumes should be reallocated.
Industry backlash
The U.S. refining industry reacted sharply to the EPA decision. Chet Thompson, president and CEO of the American Fuel & Petrochemical Manufacturers, criticized the move as counterproductive, saying: "It’s baffling, with fuel prices already rising due to the conflict in Iran, that EPA is finalizing a rule that will make things far worse for consumers." He added, "This is not what energy dominance looks like."
Refiners contend the mandate is a costly obligation that has already contributed to higher pump prices. Thompson said he believed U.S. biofuel mandates had already added about $0.25 to the price of a gallon of gasoline and warned the new mandates would push prices up further.
Support from farm groups and producers
Farmers and ethanol producers largely welcomed the EPA action. The National Corn Growers Association praised Friday’s announcement and highlighted an additional administration decision earlier in the week to expand the seasonal availability of gasoline blended with 15% ethanol - E15 - as beneficial for corn growers. "Today’s announcement, coupled with the Trump administration’s E15 summertime waiver earlier this week, is a positive move for the nation’s corn growers who are navigating an exceptionally difficult economic environment," the group said in a statement.
The Renewable Fuels Association, representing ethanol producers, said it had preferred that 100% of the previously waived volumes be reallocated rather than the 70% the EPA applied.
Market context and political implications
The timing of the mandate increase coincides with sharp fuel price gains triggered by the war in Iran, a factor refiners say amplifies the financial impact on consumers. A gallon of regular gasoline in the United States now averages about $3.98, according to the figures cited by refiners, which is more than $1 higher than at the start of the conflict on February 28. Diesel prices have risen at an even faster clip. The jump in energy costs has been highlighted as a political vulnerability for President Donald Trump and his Republican party as they approach the November midterm elections.
The requirement to blend biofuels into the nation’s fuel supply was introduced around two decades ago with objectives that included reducing reliance on imported fuel and supporting the agricultural sector. Under the Renewable Fuel Standard, refiners must blend billions of gallons of corn-based ethanol and other biofuels into fuel or obtain RINs from parties that do the blending.
Additional EPA measure affecting imported biofuels
The EPA also announced a policy change starting in 2028 that will alter how RINs are allocated for foreign-sourced fuels and feedstocks. Beginning in 2028, imported fuels and feedstocks will receive only half the RINs of comparable American-made products, a provision the agency said is intended to benefit the domestic biofuel industry.
The finalized mandates and the change to RIN valuations for imports mark a substantial regulatory adjustment affecting multiple stakeholders: refiners facing higher compliance costs, farmers and ethanol producers seeking expanded market demand, and consumers who may see higher pump prices amid geopolitical energy disruptions.
How these revised obligations will play out in markets and at the pump will depend on how refiners, biofuel producers and traders respond to the updated RIN supply-and-demand dynamics and on developments in global energy markets tied to the conflict in Iran.