Trump biofuel goals hit reality as US plants lag

• U.S. plants generated only 736 million RINs in May, well below the roughly 915 million needed monthly, with production lagging by an estimated 1.41 billion RINs through April 2026
• The 2026 mandate requires refiners to blend a record 5.4 billion gallons of biodiesel and renewable diesel, over 60% higher than 2025 levels, but policy uncertainty over the 45Z tax credit delayed production for months
• RIN credit prices have already surged to record highs, and the industry's cushion (RIN bank) could be exhausted by year-end 2026, prompting AFPM to sue the EPA and lobby lawmakers to reconsider the mandates

Summary: Trump Biofuel Goals Hit Reality as US Plants Lag

President Trump's ambitious biofuel production targets are falling short as U.S. plants struggle to meet EPA mandates, creating potential political and economic risks ahead of midterm elections.

Key Production Shortfalls

U.S. biodiesel producers operated at just 77% capacity in May, significantly below the EPA's 90% assumption. Renewable diesel facilities ran at 78% capacity. In May, producers generated only 736 million biomass-based diesel RINs (Renewable Identification Numbers), far short of the roughly 915 million needed monthly to meet 2026 targets.

2026 Mandates and Implications

The EPA set record mandates requiring refiners to generate or purchase 8.86 billion RINs in 2026, equivalent to blending 5.4 billion gallons of biodiesel and renewable diesel—over 60% higher than 2025 levels. Through the first four months of 2026, production lagged by an estimated 1.41 billion RINs.

Agricultural economist Scott Irwin warns that meeting targets would require output to exceed industry records by more than 20% for the remainder of the year—an unlikely scenario.

Market Impact

The shortfall is depleting the "RIN bank" (stockpile of unused credits), which could be exhausted by year-end 2026. RIN prices have already surged, raising compliance costs for smaller refiners and potentially increasing pump prices for consumers.

Contributing Factors

Production was delayed as producers awaited Trump administration guidance on the 45Z clean fuel production tax credit, finalized only recently. Additionally, petroleum price surges tied to the Iran conflict incentivized conventional fuel production over renewable alternatives, while some production went to exports rather than domestic mandate compliance.

The American Fuel and Petrochemical Manufacturers (AFPM) has sued the EPA and lobbied lawmakers to reconsider the mandates, warning of billions in additional costs.