EPA Finalizes 2026-2027 Renewable Fuel Standards and Eliminates eRINs
Environmental Protection Agency (EPA)
The Environmental Protection Agency issued a final rule which dictates the volume of renewable fuels that must be blended into the national transportation fuel supply, goes into full effect on June 15, 2026, with specific amendatory instructions taking effect on April 28, 2026, and January 1, 2027.
The regulation mandates a 15 percent increase in the required volumes for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel over the 2023-2025 baseline, and reallocates 70 percent of previously exempted Renewable Volume Obligations (RVOs) from 2023-2025 to the 2026 and 2027 compliance years to prevent the exemptions from eroding biofuel demand.
Furthermore, the rule formally removes renewable electricity as a qualifying renewable fuel under the RFS program, concluding that electricity does not meet the statutory definition of a renewable fuel capable of physically displacing a volume of fossil fuel.
This action forces domestic gasoline and diesel producers, blenders, and importers to significantly increase their use of qualifying biofuels or purchase compliance credits to meet heightened statutory obligations.
The EPA is effectively shutting down a highly anticipated market mechanism that would have subsidized electric vehicle charging networks through the RFS program.
The agency also opted not to finalize a controversial proposal that would have reduced the compliance value of imported biofuels, meaning foreign-produced renewable fuels will continue generating standard compliance credits in the near term.
The mandates apply directly to entities involved in the production, distribution, and sale of transportation fuels and renewable fuels across the United States, including petroleum refineries, ethanol manufacturers, and fuel dealers.
Small refineries remain eligible to petition for hardship exemptions, however, the new rule strictly requires all exempt small refineries to submit annual compliance reports and satisfy any deficit obligations carried forward from previous years.
The regulation explicitly clarifies that renewable fuels used for process heat or electricity generation are strictly prohibited from generating compliance credits.
