The EPA has delayed finalizing 2026 and 2027 biofuel blending mandates until Q1 2026 after missing an October deadline. The postponement creates uncertainty for refiners, biofuel producers, farmers and traders who need the rule to finalize contracts, hedge risks and plan investments. A proposed rule would increase targets for advanced biofuels and biomass-based diesel while tightening rules on imports, intensifying a dispute between refiners and domestic biofuel advocates.
EPA Pushes 2026–27 Biofuel Blending Mandates to Q1 2026, Heightening Market Uncertainty
United States Environmental Protection Agency logo and U.S. flag are seen in this illustration taken April 23, 2025. REUTERS/Dado Ruvic/Illustration
The U.S. Environmental Protection Agency now expects to finalize the 2026 and 2027 biofuel blending mandates in the first quarter of 2026, after an originally scheduled October decision was postponed. The agency said the timeline follows consultations with the White House Office of Management and Budget, according to a notice filed with the U.S. Court of Appeals for the D.C. Circuit on Dec. 15.
The delay shifts a major energy policy decision into next year and has immediate commercial consequences. Fuel producers, refiners, farmers and commodity traders say the absence of final quotas is forcing them to delay supply agreements, hedging strategies and investment decisions that affect production levels and profit margins.
What the Proposed Rule Would Do
A proposed rule published earlier this year would raise total renewable fuel requirements, substantially increase targets for advanced biofuels and biomass-based diesel, and tighten limits on the use of imported biofuels. Supporters of higher domestic blending say the changes would boost U.S. biofuel production and reduce reliance on foreign supplies.
Industry Tensions
Stakeholders remain sharply divided. Refiners argue for lower mandates and looser import rules to keep costs down, while biofuel producers and agricultural interests are pushing for higher domestic blending volumes that would expand demand for corn, soy and next-generation feedstocks. The decisions will shape contracts, margins and future capital spending across the supply chain.
The EPA’s announced timing — a final rule in Q1 2026 — gives market participants a clearer window but still leaves several months of uncertainty. Companies that need regulatory clarity to lock in long-term contracts and justify new capacity investments will be watching closely as the EPA completes its review with OMB and prepares the final rule.
Context: The mandates are set under the Renewable Fuel Standard, the federal law that requires billions of gallons of ethanol and other biofuels to be blended into the U.S. fuel pool each year. The final rule will determine the specific volumetric quotas for 2026 and 2027 and the rules governing domestic versus imported biofuels.
