Outlook on the New Administration: What’s Next for Renewable Fuels?

The RFS Program

The RFS program requires U.S. transportation fuels to contain a minimum volume of designated renewable fuels. This requirement is met by assigning a specified renewable volume obligation (“RVO”) to obligated parties — refiners or importers of gasoline or diesel. RVOs are based on the percentage of the determined RFS volume requirement for an applicable compliance year and projections of gasoline and diesel production for that year. An obligated party can comply with their RVO by either producing renewable fuels or purchasing sufficient RINs, tradeable credits generated when a gallon of renewable fuel is produced. Each fuel type and RIN is assigned a “D-code” that identifies the renewable fuel type based on the pathway used to produce the fuel — cellulosic biofuel is assigned to either D-3 or D-7, biomass-based is assigned D-4, advanced biofuel is assigned D-5, and all other renewable fuels are assigned D-6. Beyond the RFS, California’s LCFS similarly encourages renewable fuels by requiring parties that sell or offer for sale transportation fuels in California to meet annual carbon intensity reduction credits or purchase LCFS credits to meet the standards.

More Exemptions, but More Volatility

The first Trump administration was marked by a more industry-favorable approach to administering the RFS. During President Trump’s first term, the U.S. Environmental Protection Agency (“EPA”) took a more generous approach to granting small refinery exemptions (“SRE”), which allow small refineries to be exempt from renewable fuel requirements by demonstrating that they would suffer disproportionate economic hardship by having to comply with the RFS program.¹ While the Trump administration’s policy afforded small refiners with much-needed relief, the Trump-era EPA did not adjust RVOs for larger refiners to account for those that had secured SREs. The result was an oversupply of RIN credits, particularly D-4, D-5, and D-6 RINs, that drove down prices; for instance, D-5 RINs reached an all-time low price of $0.15 in March 2019.² RIN prices continued to fluctuate throughout the Trump administration, particularly for D-3 and D-5 RINs — when President Trump took office in 2017, D-3 RINs were priced at $1.80, dropped to $0.59 in 2019, and increased again to $2.03 when Trump left office in 2021.³

Faced with volatile RIN prices, the administration made efforts to increase the availability of E15 (gasoline blended with 10.5–15% ethanol) as a way to mitigate fluctuations while maintaining the integrity of the RFS. EPA regulations ordinarily limit sales of E15 during the summer. Though the Trump administration in June 2019 finalized a rule to allow the year-round sale of E15, the rule was challenged, and in July 2021, the D.C. Circuit Court of Appeals vacated the rule, holding that the EPA did not have statutory authority to authorize year-round E15 sales across the country.⁴ Despite this decision, the EPA has authorized the summer driving season sale of E15 nationwide for the past three years pursuant to emergency fuel waivers.

RFS Under the Biden Administration

The Biden-era EPA dramatically shifted its approach to certain aspects of the RFS program. As we previously discussed, the Biden administration finalized the “Set Rule” establishing biofuel targets through 2025. The 2023 Set Rule reflected the Biden-era EPA’s projection that it would not approve any SRE applications it might receive over the next three years, and it followed through, rescinding 36 SREs that the first Trump administration’s EPA had granted. These actions have been subject to litigation, with refiners arguing that the Biden administration’s standards for granting SREs were impermissibly narrow. Both the Fifth Circuit and the DC Circuit rejected EPA’s position, opening the door for the new administration to revisit the EPA’s approach to SREs. Read our analysis here.

Renewable Fuels in the New Administration

The RFS has long been plagued by delays in issuing annual renewable fuel targets. Despite past opposition to the RFS program, EPA Administrator Lee Zeldin committed to creating certainty for producers and industries subject to RFS during his confirmation hearing. Zeldin recently indicated that, just as with the RFS Set Rule under the Biden administration, he intends for EPA to propose multi-year targets, but that EPA will also attempt to tailor targets to be more reflective of current and projected renewable fuel production capacity. The hope is that this would provide greater regulatory certainty and clearer signals for RIN markets. The EPA is already a year behind schedule in setting renewable volume targets and, on March 13, 2025, finalized a rule extending the 2024 RFS compliance reporting deadline from March 31, 2025 to the next quarterly deadline after the effective date of the finale rule establishing the 2024 cellulosic biofuel standard. Whether or not any benefits that might result from such an approach will outweigh the impacts of the more liberal approach to granting SREs that we will almost certainly see is an open question, but the Trump administration has further indicated it is looking at some additional steps.

Again, as in the first Trump administration, current signs suggest that EPA believes that one way to reduce shocks to the RIN market is for granting waivers for greater use of E15. The E15 availability issue is already on the EPA’s radar, as President Trump’s Executive Order Declaring a National Energy Emergency tasks Zeldin with issuing emergency fuel waivers to allow the year-round sale of E15 to meet any projected shortfalls in gasoline supply. However, the political declaration of an “energy emergency” may be insufficient to meet statutory or regulatory requirements, and EPA’s use of emergency authorities to issue fuel waivers may be met with litigation by groups that oppose year-round E15. Notwithstanding the potential legal hurdles, Zeldin has already made his stance on the expansion of E15 clear. On February 21, 2025, following the EPA’s announcement of its decision to uphold the year-round sale of E15 in midwestern states, Zeldin underscored the EPA’s “commitment to consumer access to E15” and described the administration’s approach as one that “provides certainty for states that are ready to move forward with year-round E15.”⁵

Another recent Executive Order, Unleashing American Energy, ordered agency heads to review existing agency actions that “impose an undue burden on the identification, development, or use” of, among other “energy resources,” biofuels. This directive, combined with greater support for E15, signals that the Trump administration may be looking to use renewable fuels to advance its energy goals. Interestingly, a recent enforcement and compliance memorandum released by the EPA on March 12, 2025, reinforces this directive by limiting enforcement and compliance actions that could shut down or significantly disrupt “any stage of energy production (from exploration to distribution),” including biofuels, unless there is an imminent and substantial threat to human health or a clear statutory or regulatory mandate. This suggests that biofuel facilities may benefit from heightened scrutiny over enforcement actions that have the potential to hinder their operation or capacity.

Key Takeaways

We expect to see some support from the second Trump administration for renewable fuels, tempered by an expected increase in SRE approvals that are at least as frequent as those under the first. We also expect the second Trump administration to set renewable fuels targets at levels close to estimates for production. In response to shortfalls in cellulosic biofuel production that have caused D-3 RIN prices to spike as high as $3.50,⁶ the Biden-era EPA proposed a rule in December 2024 to partially waive the 2024 cellulosic biofuel volume requirement. While this rulemaking is currently paused as is typical with a change of administration, we would expect the second Trump administration to be sensitive to future industry requests to relax these requirements and may set less ambitious cellulosic biofuel targets for future blend mandates.

However, in the face of pressure from lawmakers and industry groups, we may see more ambitious targets for other categories of renewable fuels. It also remains an open question whether or how the second Trump administration might revisit e-RINs — tradeable credits generated when biogas is used to make renewable electricity to charge electric vehicles — given President Trump’s views on incentivizing electric vehicles. While there may be uncertainty at the federal level, we may also see other states introduce LCFS programs similar to those in California, Oregon, and Washington. New York, New Jersey, Illinois, and Hawaii have all proposed renewable fuels programs that mimic that in California, and New Mexico is in the process of finalizing its own program. These state programs could further drive market demand for renewable fuels.

Lastly, the Trump administration has made it clear that energy production is a central priority. How its directive to scrutinize actions — including enforcement measures — that could impede biofuel production will ultimately shape regulatory oversight and policy remains to be seen.

¹42 U.S.C. § 7545(o)(9)(B)(i); 40 C.F.R. § 80.1441(e)(2)

²RIN Trades and Price Information, U.S. Env’t Prot. Agency, https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rin-trades-and-price-information (last updated Feb. 10, 2025).

³Id.

⁴Am. Fuel & Petrochem. Mfrs. v. Env’t Prot. Agency, No. 19-1124 (D.C. Cir. 2021).

⁵Ahead of Summer Driving Season, EPA Allows Expanded E15 Access to Midwest States Year-Round, U.S. Env’t Prot. Agency (Feb. 21, 2025), https://www.epa.gov/newsreleases/ahead-summer-driving-season-epa-allows-expanded-e15-access-midwest-states-year-round.

⁶RIN Trades and Price Information, supra note 2.