In a transformative policy move, the Trump administration’s proposed Renewable Fuel Standard (RFS) volumes for 2026 stand ready to unleash a major biofuel boom throughout the United States. This initiative would consume massive amounts of American-grown corn and soybeans, drive up commodity prices, and deliver essential profitability to farmers facing persistent market challenges. By raising mandatory biofuel blending requirements, the proposal tackles surpluses in key crops while promoting energy independence, rural prosperity, and domestic production.
Understanding the RFS Proposal
The Renewable Fuel Standard, originally enacted in 2005 and expanded in 2007, mandates that transportation fuel include specified volumes of renewable fuels. The Environmental Protection Agency sets annual obligations across categories: cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. For 2026, the proposal calls for total renewable fuel at 24.02 billion ethanol-equivalent gallons, a notable increase from the revised 22.33 billion for 2025. This breaks down to 1.30 billion gallons for cellulosic biofuel, 9.02 billion for advanced biofuel, and an implied 15 billion gallons for conventional biofuel, mainly corn-based ethanol.
The biomass-based diesel category emerges as a standout, with a proposed 7.12 billion RINs (Renewable Identification Numbers, equivalent to ethanol gallons), potentially equating to a substantial physical volume increase in biodiesel and renewable diesel. Industry groups have advocated for at least 5.25 billion physical gallons, driven by expanded renewable diesel capacity and soybean processing. The administration targets finalization by early March 2026 after delays from policy reviews. Key elements include reallocating small refinery exemptions (SREs) from recent years, which could add nearly 3 billion gallons of demand, and reducing RIN values by 50 percent for fuels from foreign feedstocks to favor domestic sources like U.S. soybeans and corn.
Fueling a Biofuel Boom
The proposal could generate a 2-billion-gallon surge in biofuel production for 2026, especially in biodiesel and renewable diesel. Facilities, many underutilized lately, would ramp up quickly, possibly over a shortened nine-month window. For corn ethanol, the steady 15-billion-gallon conventional mandate secures consistent demand, while advanced biofuels help fill any gaps. This clarity spurs investment in new plants and technology, including alcohol-to-jet fuels and cellulosic options from corn fiber, potentially displacing around 150,000 barrels per day of imported oil.
Soybeans play a central role through biomass-based diesel. Soybean oil serves as a primary feedstock for biodiesel and renewable diesel, and the higher volumes would boost crushing demand significantly. Projections indicate substantial additional soybean oil use, supporting domestic processors and creating new outlets for the crop amid growing renewable diesel infrastructure.
Absorbing Surplus Corn and Soybeans While Bolstering Prices
Record U.S. corn harvests have created surpluses that pressure prices and farm margins. The RFS addresses this by directing billions of bushels into ethanol production, shrinking inventories and lifting market values. Past ethanol programs have increased corn prices by 12 to 30 percent, offering growers a vital boost.
Soybeans benefit similarly from the biomass-based diesel expansion. Higher mandates drive demand for soybean oil, reducing surpluses and supporting stronger prices for beans. Without robust volumes or full SRE reallocation, soybean prices could fall 20 to 40 cents per bushel over two years due to lost demand. Prioritizing domestic feedstocks and curbing foreign competition ensures American soybeans and corn remain core inputs, stabilizing markets and shielding producers from global volatility.
Helping Farmers Turn a Profit
Profitability has eluded many farmers amid high inputs, trade issues, and demand swings. The biofuel expansion changes this dynamic. Elevated corn and soybean prices boost revenues directly, while expanded markets add value in rural areas. Biofuel growth creates jobs, stimulates local economies, and helps keep fuel affordable for consumers.
Stakeholders praise the proposal’s scale. Kurt Kovarik of Clean Fuels Alliance America calls the biomass-based diesel jump historic, urging action to sustain it. Bipartisan support highlights its importance for crop demand and rural resilience. For soybean farmers, the volumes protect investments and counter import pressures.
Broader Implications for American Agriculture
This RFS approach elevates biofuels as a cornerstone of U.S. agriculture. It diversifies outlets beyond exports, counters economic pressures, and advances energy dominance. Though some refiners and groups object, the pro-domestic focus signals strong commitment.
With 2027 volumes projected at 24.46 billion gallons, growth appears sustained. For corn and soybean producers, this means reliable demand for future crops, potentially starting a profitable, innovative chapter in American agriculture. As the EPA finalizes the rule, the groundwork forms for a biofuel resurgence that could reshape farming for years ahead.