US EPA Proposes Reallocating 770 Million Biofuel RINs for 2026–2027

Washington — The US Environmental Protection Agency (EPA) has proposed fully reallocating an additional 770 million Renewable Identification Number (RIN) credits that were waived through small refinery exemption decisions for 2025 obligations. The volume would be restored to the Renewable Fuel Standard (RFS) obligations for the 2026–2027 compliance years, with public comments open until 4 December 2026.

The proposal announced on 13 October 2026 is not a final decision. EPA presented two options: split the additional volume equally between the 2026 and 2027 compliance years, or place all of it in 2027.

Why does EPA want to reallocate 770 million RINs?

When EPA established the RFS “Set 2” rule, it estimated the volume of hardship exemptions that small refineries would receive for their 2025 obligations. Small refinery exemption decisions issued on 31 August 2026 exceeded that estimate, removing an additional volume equal to 770 million RINs from the programme's obligations.

EPA said the proposed 100% reallocation is intended to preserve the benefits of the RFS targets and prevent exemptions from reducing markets for US farmers and biofuel producers. Reuters described the move as an effort by the US administration to address concerns from agricultural and biofuel interests that refinery waivers could erode demand for ethanol and biodiesel.

RINs are compliance credits under the RFS. Renewable fuel producers or importers generate the credits, while obligated companies can surrender them to meet targets or trade them. Changes in required volumes can therefore affect credit demand and the economics of biofuel production.

Two options for 2026–2027

• Option one: divide the additional 2025 volume equally between the 2026 and 2027 compliance years.
• Option two: allocate all of the additional volume to the 2027 compliance year.

EPA also said revisions to the 2026 standards could extend the existing compliance reporting deadline of 31 March 2027. The final outcome will depend on consultation and a final rule, meaning the proposal alone does not establish the eventual increase in biodiesel demand.

What it means for Indonesia

For Indonesia, the development is more relevant as a signal for global biofuel and vegetable oil demand than as a direct export opening. EPA explicitly frames the proposal as a measure to maintain markets for American crops and domestic biofuel producers. The proposal therefore provides no basis for concluding that it automatically creates market access for Indonesian palm-based biodiesel.

Even so, maintaining US biofuel obligations could support demand for domestic feedstocks such as soybean oil and waste fats. As an analytical implication, shifts in feedstock demand in one of the world's largest biofuel markets can affect competition among vegetable oils and international trade flows. The OECD-FAO Agricultural Outlook 2026–2035 identifies biofuel policies as an important driver of agricultural commodity demand.

Indonesian market participants will need to monitor the final rule, the distribution of volumes between 2026 and 2027, and separate eligibility rules governing feedstocks. For domestic context, readers can consult Indonesia's biodiesel mandate data and the B50 guide.