EPA Sets 2023–2025 RFS, Biomass-Based Diesel Reaches 3.35 Billion Gallons

Washington — The US Environmental Protection Agency (EPA) on 21 June 2023 finalised Renewable Fuel Standard (RFS) obligations for 2023–2025. Total renewable fuel was set at 20.94 billion renewable identification numbers (RINs) in 2023, 21.54 billion in 2024 and 22.33 billion in 2025, while the biomass-based diesel requirement rises to 3.35 billion gallons in the final year.

The final rule was EPA’s first multi-year volume-setting action after the targets written directly by Congress ended in 2022. The RFS requires specified volumes of renewable fuel to enter the US transportation fuel supply, with compliance demonstrated through RIN credits.

Diesel-based biofuel volumes rise gradually

EPA set biomass-based diesel volumes at 2.82 billion gallons for 2023, 3.04 billion gallons for 2024 and 3.35 billion gallons for 2025. The broader advanced biofuel category, which includes biomass-based diesel, was set at 5.94 billion, 6.54 billion and 7.33 billion RINs respectively.

Across all renewable fuel categories, the 2024 requirement is 1.09 billion gallons above the 2022 obligation. EPA said the increase was supported by expanding supplies of renewable diesel and other renewable fuels that qualify under the programme.

The agency projected that the three-year rule would reduce US oil imports by about 130,000–140,000 barrels per day and cut carbon dioxide emissions by roughly 130 million metric tonnes over the period. These figures were EPA projections based on its regulatory impact analysis, not reductions already achieved.

Industry says the targets remain too low

Clean Fuels Alliance America welcomed higher volumes but criticised their scale. The industry group said the 2023 biomass-based diesel standard increased only to 2.82 billion gallons from 2.76 billion gallons in 2022, while cumulative growth through 2025 remained too small relative to North American biodiesel and renewable diesel production capacity.

Clean Fuels put industry capacity at about 5.8 billion gallons per year. It warned that EPA’s targets could restrain new investment and did not fully recognise available supply. That statement represented the position of producers seeking a higher mandate.

Reuters reported that markets were also disappointed because the final targets fell below some biofuel-sector expectations. EPA did not proceed in this rule with an earlier proposal to introduce credits associated with electric vehicles, saying it would consider that pathway separately.

What it means for Indonesia

Media Biodiesel analysis: the rising biomass-based diesel obligation shows that policy-driven US demand for renewable diesel fuels continues to grow. The RFS figures do not, however, create an automatic import quota for Indonesian palm-based biodiesel. Fuels and feedstocks must still meet renewable biomass definitions, approved production pathways, lifecycle greenhouse-gas thresholds and RIN administration requirements.

The gap between EPA’s targets and the industry’s preferred volumes also matters for global vegetable-oil markets. A higher mandate can increase feedstock needs for biodiesel and renewable diesel, while a target below expectations can moderate demand projections. On 21 June 2023, the final decision provided three years of volume certainty but left a dispute over how quickly existing US capacity would be absorbed.

For Indonesia, the rule is relevant as an indicator of international biofuel policy and feedstock competition rather than a guaranteed market for CPO or fatty acid methyl ester (FAME). Indonesian producers would need to assess the headline volumes alongside US feedstock eligibility and carbon-intensity rules before judging trade opportunities.