EPA Likely to Propose RFS Volumes Below Industry Expectations

Reuters’ Stephanie Kelly and Jarrett Renshaw reported Thursday that “the U.S. Environmental Protection Agency on Friday will propose new biofuel blending requirements for oil refiners for the coming two years that will likely include a lower biomass-based diesel mandate than industry groups had requested, according to four sources familiar with the matter.”

“The White House has completed its review of the EPA’s plan and returned it to the EPA for further action, according to the website for the Office of Management and Budget. The EPA is expected to announce the proposal on Friday, the sources said,” according to Kelly and Renshaw’s reporting. “The oil and biofuel industries, both major lobbying powers in Washington, have highly anticipated the release of the proposal, which will determine the fate of billions of dollars in fuel and tradable credit transactions.”

“A U.S. and biofuel coalition led by the American Petroleum Institute advocated in recent months that the EPA propose federal mandates for biomass diesel blending for 2026 at 5.25 billion gallons, which would be a significant increase from previous mandates, Reuters previously reported, citing sources,” according to Kelly and Renshaw’s reporting. “However, sources told Reuters on Thursday that the EPA was expected to propose biomass-based diesel blending quotas lower than 5.25 billion gallons. The EPA had set biomass-based diesel mandates for the 2025 compliance year at 3.35 billion gallons.”

“The agency said it would post the proposal on the EPA’s website once Administrator Lee Zeldin signs it,” Kelly and Renshaw reported.

U.S. Biofuels Makers Remain in a Slump

Bloomberg’s Kim Chipman reported that “the White House is gearing up to finally announce its new rules on biofuel blending, critical support for the industry that’s underpinned American farming over the past two decades. But for some producers of diesel made from soybeans, the move won’t be enough to rescue them from a months-long downturn that’s led to plant closings and layoffs.”

“In Iowa, Western Dubuque Biodiesel LLC currently only has sales booked through August instead of the typical 21 months in advance. Houston-based Renewable Biofuels Inc., owner of the country’s biggest plant making the soy-heavy fuel, is running at less than 30% capacity — and at a loss,” Chipman reported. “And just this week, biodiesel firm Hero BX, based in Pennsylvania, was forced to go up for sale after it had slashed production down to zero and defaulted on a loan.”

I hope the tweet I saw abt lower biodiesel volumes isn’t true If Pres Trump wants 5 closed biodiesel plants to reopen & jobs in rural America we’ve got to hv the 5.25 BILLION for biodiesel

— Chuck Grassley (@ChuckGrassley) June 12, 2025

“‘Margins are very compressed,’ said Aluizio Ribeiro, president of Incobrasa Industries Ltd., a biodiesel maker and soy processor with a facility in the No. 1 soybean-growing state of Illinois,” Chipman reported. “The plant expects to make about a third less fuel this year.”

“The industry woes are a long way from the optimism of two decades ago, when biodiesel began to take off after struggling soybean growers in need of new markets helped create a nationally mandated fuel,” Chipman reported. “US production of soybeans has roughly doubled since 2004 as demand grew for the crop’s use as a so-called feedstock in fuel making. At the moment, tax legislation making its way through Congress deals with 45Z, but it’s far from clear whether potential changes will end up being more beneficial to farmers and soybean processors or to makers of traditional fossil fuels.”

ADM Slashes Soybean Bids

Reuters’ Tom Polansek and Karl Plume reported that “Archer-Daniels-Midland, a major U.S. soybean crusher and biofuel producer, slashed its bids to buy the oilseed this week ahead of an expected Trump administration announcement on biofuel blending requirements, a primary driver of demand for soybean oil.”

“The company on Wednesday rolled its cash basis bid at its flagship Decatur, Illinois, facility to 20 cents below the Chicago Board of Trade November soybean futures price from 22 cents over July futures,” Polansek and Plume reported. “The roll to November futures, which closed at a 15-cent discount to July on Thursday, lowered the local cash price by about 60 cents a bushel, representing an unusually sharp 6.5% drop in the price offered to farmers.”

“ADM also rolled basis bids at its other crushing facilities, and some rival processors, including Cargill, followed ADM on Thursday. Other processors kept their basis bids against the July futures contract, but lowered basis values by up to 15 cents,” Polansek and Plume reported. “‘ADM Decatur put the bean market in a frenzy,’ agriculture trading company John Stewart and Associates said in a note.”