President Donald Trump’s efforts to boost bio-based diesel production are facing a market reality check as US plants lag behind his targets. The production gap carries significant political and economic risks, particularly for farmers and rural communities who rely on the biofuel industry.

Output Lags Behind EPA Mandates

The Environmental Protection Agency (EPA) set record biofuel blending targets for 2026 under the Renewable Fuel Standard, requiring refiners to generate or purchase 8.86 billion RINs (Renewable Identification Numbers). However, operating rates at US biodiesel plants were just under 77% in May, while renewable diesel facilities were at 78%, according to Zander Capozzola, principal consultant at Argus Media.

Refiners generated 736 million RINs in May, well below the roughly 915 million needed each month to stay on pace. The shortfall is causing widespread concern across the industry, with some experts warning that the EPA may need to intervene to address the issue.

Policy Uncertainty Stalled Production

Production was held back for months as biodiesel and renewable diesel producers waited for the Trump administration to finalize guidance for the federal 45Z clean fuel production tax credit. The guidance, released in recent weeks, removed some land-use restrictions and increased incentives for soy-based renewable diesel, changes the industry had sought for a year.

A surge in petroleum prices tied to the Iran conflict also dampened growth in biodiesel production, as supply disruptions boosted margins for conventional fuels, giving refiners greater incentive to maximize petroleum-based output rather than increase renewable fuel production.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.