Infrastructure

EPA Proposes Record Biofuel Standards to Boost Rural America

The Environmental Protection Agency (EPA) rolled out an ambitious plan this week

Rural America pictured — *Image via Karen Massier from Getty Images Signature*

The Environmental Protection Agency (EPA) rolled out an ambitious plan this week to reshape U.S. energy policy by proposing "Set 2" renewable fuel standards for 2026 and 2027. The proposal—the 20th anniversary update of the Renewable Fuel Standard (RFS)—would raise total biofuel blending volumes to an unprecedented 24.02 billion gallons in 2026 and 24.46 billion gallons in 2027, up from 22.33 billion in 2025.

“Benefits for Farmers and Fuel Prices”

EPA Administrator Lee Zeldin emphasized the plan’s dual goals: bolstering American farmers and curbing dependence on foreign energy. “We are creating a new system that benefits American farmers while mitigating the impact on gas prices,” he said, “We can no longer afford … where Americans pay for foreign competitors”.

Agriculture leaders echoed that sentiment. Secretary of Agriculture Brooke Rollins touted the proposal as “the boldest” and “highest ever Renewable Volume Obligation,” signaling strong support from the Trump administration. Likewise, representatives from the American Farm Bureau and American Petroleum Institute (API) praised the renewed market certainty—itself the product of an unexpected coalition between oil and farm interests.

Three major regulatory shifts accompany these volume increases:

Heightened quotas for cellulosic biofuel, biomass-based diesel (BBD), and advanced biofuels.
A domestic preference: Imported biofuels now earn just 50% of the Renewable Identification Number (RIN) value compared to U.S.-based fuels.
Removal of renewable electricity (eRINs) as a qualifying fuel, reinforcing liquid biofuels as the RFS’s centerpiece.

EPA projects these measures will cut U.S. oil import reliance by roughly 150,000 barrels per day across 2026–2027, backing domestic biofuel producers and strengthening rural economies.

Critics Speak Out

Yet critics question whether RFS expansions truly serve broader national interests.

Some environmental policy analysts argue biofuels—especially corn- and soybean-based—may not live up to their promise. A 2021 University of Wisconsin study noted that land-use changes spurred by RFS could increase fertilizer use and negate greenhouse gas benefits, with corn ethanol “no lower than gasoline and up to 24% higher” in emissions.

More broadly, climate advocates warn the Trump-era EPA is retreating from climate safeguards. Recent rollbacks—including easing mercury and greenhouse gas emissions standards—are said to threaten public health and undermine emissions goals. One university study predicted that similar rollbacks could lead to 22,800 additional pollution-related deaths and $1.1 trillion in lost GDP by 2035.

Economists caution that RFS distorts energy markets and drains taxpayer resources. Critics argue that biofuel mandates favor corn ethanol producers over potentially superior clean technologies, and that subsidies continue long after the industry has matured. Moreover, persistent "blend wall" constraints—like the 10–15% ethanol cap in fuel—could limit outreach and raise infrastructure concerns.

What Happens Next?

EPA will host virtual public hearings on July 8 and 9, 2025, as part of the review process. Following public comment, the agency aims to finalize the rule by year-end.

Proponents view the proposal as a game-changer for rural economies and national energy resilience, applauding its historic biofuel quotas and homegrown focus. Meanwhile, opponents raise red flags—highlighting limited climate benefits, health risks from rollbacks, and ongoing debates over economic distortions and environmental trade-offs.

As the comment period begins, the debate over biofuels being a solution—or a distraction—remains squarely at the EPA’s doorstep.