The U.S. Environmental Protection Agency (EPA) has released a proposed rule to update the Renewable Fuel Standard (RFS) program for 2026 and 2027. The plan outlines new volume targets for renewable fuels and is intended to reduce the nation’s dependence on foreign oil while strengthening domestic energy security and supporting clean fuel innovation.
Known as the “Set 2” rule, the EPA’s proposal establishes annual volume targets for multiple categories of renewable fuels, including cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. The agency will also set corresponding percentage standards to guide compliance among U.S. fuel refiners and importers.
“We are creating a new system that benefits American farmers while mitigating the impact on gas prices and ensuring the continued existence of liquid fuels,” said EPA Administrator Lee Zeldin in a recent press release. “We can no longer afford to continue with the same system where Americans pay for foreign competitors.”
A central goal of the proposed rule is to reduce the nation’s reliance on foreign-produced fuels. The EPA estimates that changes outlined in this proposal would reduce U.S. oil imports by approximately 150,000 barrels per day over the 2026-2027 period. This shift is largely driven by new provisions that would lower the Renewable Identification Number (RIN) value for imported biofuels and feedstocks, making domestically produced fuels more economically competitive.
At present, about 45% of biomass-based diesel and feedstocks used in U.S. fuel blending are imported. The EPA hopes that the new standards will encourage increased domestic production and investment in homegrown renewable fuel infrastructure.
The proposed rule also includes a partial waiver of the 2025 cellulosic biofuel mandate, citing ongoing production challenges in that segment. Additionally, the EPA is proposing changes to how RIN credits are calculated, limiting the number of credits that can be issued for imported fuels and feedstocks. This adjustment aims to ensure a level playing field for U.S. producers.
The EPA is now accepting public comment on the proposed rule. The agency plans to finalize the rule later this year after reviewing comments and conducting further analysis.
