Farmers and Oil Producers Talk Biofuel Future

Industry Leaders Meet to Shape Upcoming Renewable Fuel Policy Updates

The administration has directed oil and biofuel sectors to negotiate key elements of the Renewable Fuel Standard (RFS) to reduce conflict and reach a common solution.

These industries, often rivals in the U.S. fuel market, are discussing blending mandates, refinery exemptions, and tax incentives, especially for biodiesel and ethanol.

Two high-level meetings have taken place, including one by the American Petroleum Institute. Topics included increasing blending targets, refining exemption policies, and debating the biofuel tax credit model.

API’s Will Hupman noted, “It makes it easier for (the Trump administration) to arrive at whatever number they arrive at if they are hearing from groups that have historically been at the opposite sides of this.”

A tentative agreement suggests increasing biodiesel and renewable diesel mandates to between 4.75 and 5.5 billion gallons by 2026. Ethanol blending volumes are expected to stay around 15 billion gallons. 

The group remains divided over small refinery exemptions—whether refiners should make up for missed blending remains unresolved.

Discussions also covered the 45Z tax credit, which rewards low-carbon fuel production. Some supported the credit's structure, while others want to return to a flat $1-per-gallon credit.

The biofuel and oil sectors plan to continue talks. Hupman remarked that companies have adjusted to the evolving energy landscape, saying, “We have a realization that the RFS is here to stay and we want to make sure it functions as efficiently as intended.”

These discussions show progress toward balancing agricultural and energy priorities in future policy.