The biodiesel and renewable diesel industry recently got some good news with the 2026 and 2027 Renewable Volume Obligations of more than six billion gallons. Donnell Rehagen, CEO of Clean Fuels Alliance America, said that’s quite a jump from the previous RVOs.
“Now, to put that into some perspective, the volume obligation that was set previously under the previous RVO for 2025 was about 3.3 billion gallons, so we’re looking at not quite doubling it, but it’s a huge increase. The good news is we’re able to produce those volumes here in the United States. Over the last four, five, or six years, our industry has built out and more than doubled its production capacity, mostly in the form of renewable diesel.”
He said the prospective blending volumes are telling the biodiesel and renewable diesel industries to grow.
“We have the capacity to produce it. We have the feedstocks to produce it. All we’ve ever needed is for the policy side of the world to sync up with what we were able to do, and we finally have that under this most recent RVO. So, that came out of this Trump administration, set for 2026 and then for 2027 as well, with a little bit of a bump in 2027. So, we have a prospective volume out there in front of us, which we always want to have a prospective volume, and it’s telling us to grow and to grow fast, and that’s exactly what we wanted to hear.”
The industry has been working very hard for several years to increase production capacity.
“The production expansion started years ago. It would be like the soybean crush expansion that happened. Those are projects that were conceptualized three, four, and five years ago, and they’re just now coming to fruition, right? So, the same thing would be true for a biodiesel plant or a renewable diesel plant. Those are usually going to be years in the making. So, our expansion was kind of ahead of the curve, if you think about it from the perspective of what the RVOs were set. So, there was some anticipation, I guess I would say, that there would be higher volumes set, because we see the country moving towards cleaner transportation fuels.”
The RVO increase is very good news for U.S. farmers.
“The biggest winner in the biofuels industry are soybean farmers. Soybean oil is the number one feedstock used for our fuels, and so we love to see that increased demand on the production side, because that ends up creating a new and additional demand for soybean oil.”