The Environmental Protection Agency (EPA) has proposed new requirements for 2026 and 2027 under the Renewable Fuel Standard (RFS), the federal regulation mandating biofuel blended into the nation’s transportation fuel supply.
Quick Takeaways:
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Independent refiners, refinery workers, and unions across the supply chain strongly oppose the EPA’s proposed RFS mandates for 2026 and 2027, warning the mandates are detached from reality and could disrupt the U.S. refining industry.
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Current, unachievable ethanol mandates already force independent refiners to face soaring costs for scarce RFS compliance credits, RINs, , which add up to 30 cents per gallon at the pump. These refiners now warn that EPA’s proposal could risk American refinery closures, capacity and spark higher consumer gas prices.
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Refiners urged the EPA to adopt more achievable targets, including a 14.2-billion-gallon ethanol cap and rebuilding RIN liquidity to stabilize the market.
Deep Dive:
In June 2025, the EPA released its proposed Renewable Volume Obligations (RVOs) for 2026 and 2027 under the nation’s biofuel mandate, the Renewable Fuel Standard. The EPA proposed unrealistic mandates untethered from market conditions.
Now, independent refiners, refinery workers, and unions across the supply chain are urging the EPA to lower its proposed volume requirements to no more than 14.2 billion gallons to match the government’s projections for the maximum amount of ethanol that can be blended into gasoline given engine and infrastructure constraints, as well as transportation fuel demand. This adjustment would ensure the continued growth of America’s biofuel industry without triggering outsized soaring compliance costs and risking the vitality and strength of America’s independent refining sector.
The alternative? If finalized, EPA’s proposal would:
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Impose heavy regulatory burdens and high compliance costs on American independent refiners. In recent years, some independent refiners have reported spending more for RFS compliance credits than on salaries, benefits, maintenance, and utility costs combined, a trend that would accelerate under EPA’s proposed mandates.
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Increase consumer energy costs, including higher gas prices. Since January 2025, RIN prices have surged by 75 percent, contributing to an extra 20–30 cents per gallon at the pump for American drivers. EPA’s current proposal would lead to a higher, “hidden biofuel tax” burden on consumers at the pump.
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Subsidize the biofuel industry at the expense of American refinery workers, while weakening U.S. refining capacity. The RFS has already contributed to at least four independent refinery closures, eliminating over 80,000 high-quality, family-sustaining jobs and more than 1.4 million barrels per day in lost domestic refining capacity. Now, only a handful of refineries remain on the East Coast despite it being home to one-third of the U.S. population.
A Direct Appeal to EPA Administrator Zeldin
EPA’s proposal came just days after a group of refiners representing 2.4 million barrels per day of U.S. capacity sent a letter to EPA Administrator Lee Zeldin, urging EPA to reconsider its approach and adopt more achievable RVO levels that align with market realities. They proposed a more realistic and balanced path forward, including:
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Setting ethanol RVOs at 14.2 billion gallons to reflect infrastructure limits.
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Capping biodiesel mandates at actual 2024 production levels to prevent price spikes.
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Setting cellulosic biofuel targets at 75% of forecast output to avoid future resets.
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Rebuilding the RIN credit bank to enhance market liquidity and reduce compliance volatility.
