The biofuels market is preparing for a potentially significant shift as the Environmental Protection Agency considers delaying its proposed 50 percent RIN value reduction for imported feedstocks until 2027. Reuters reported that refiners pushed back against the proposal, which was originally tied to the “America First” policy and intended to prioritize domestic feedstocks.
Bloomberg analysis indicated that if the EPA delays the reduction, it may raise the 2026 D4 mandate to 8.8 billion RINs to preserve the overall 5.61-billion-gallon target. That adjustment would allow full U.S. biomass-based diesel use in 2026. Modeling also suggests that a high-end estimate of 2025 small refinery exemptions could require substantial reallocation to maintain import volumes.
Market Watching Margins and Mandates
Biomass-based diesel margins remain tight. Higher margins will likely be needed to meet the proposed 2026 volume obligations, especially if imported feedstock economics shift. A delay in the 50 percent RIN reduction would temporarily stabilize demand for imported material but may increase uncertainty for producers planning around 45Z, feedstock procurement, and long-term supply agreements.
Industry experts are closely watching EPA’s final rule, as the timing will directly influence trade flows, feedstock values, crush margins, and purchasing strategies going into next year.
Source: CoBank Knowledge Exchange, “Gleanings,” Nov. 24, 2025.
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