The Renewable Fuel Standard is a program most have never heard of but are affected by it daily. Every time you fill up your gas tank or purchase food, RFS has influenced the price you pay.
The Environmental Protection Agency’s newly released 2026 and 2027 Renewable Volume Obligations (RVO) associated with RFS are concerning. The increased levels are the most significant jump in years, adding strain to already burdened industries and contributing to mounting evidence that this program is doing more harm than good.
Established in 2005 and expanded in 2007, the RFS requires crops such as corn and soybeans to be converted into biofuels and blended into the nation’s surface transportation fuel supply. Advanced biofuels are generally derived from non-food-based feedstocks. The statute set out to reduce dependence on oil from foreign entities, expand the use of renewable fuels, and mitigate greenhouse gas emissions.
At the legislation’s onset, Congress set each year’s RVOs through 2022; the EPA has been responsible thereafter. RVOs dictate the amount of renewable fuel that obligated parties, such as gasoline and diesel refiners and importers, must blend into the fuel supply.
The first few years’ targets were comfortably obtained. However, difficulties began in 2014, primarily for advanced biofuels, whose overly optimistic goals rested upon the hope of specific technology and infrastructure that ultimately failed to materialize on a grand scale. Corn ethanol, which remains the most significant component of renewable fuels, has been the most successful at reaching its goals.
RFS has had some unintended consequences.
Often lacking the capacity to blend fuels, smaller independent refineries are forced to purchase the required Renewable Identification Numbers (RIN) to meet RFS compliance. Buying RINs can be costly; many refineries spend more on those than all other operating costs combined.
At least nine small refineries have closed since 2018, resulting in thousands of lost jobs and economic hardship for communities.Their removal from the marketplace has also led to a reduction of more than 1.4 million barrels of daily collective refining capacity.
The difference between 2025 standards and the new targets for 2026 (1.69 billion RINs) is more than double the volume increase between 2024 and 2025 (0.79 billion RINs). These new RVOs represent a 23 percent increase for advanced biofuels from the previous year and a 7.5 percent for all renewable fuels, the largest jump the EPA has mandated.
Such steep RVO increases will further burden small refineries and put more of them at risk of closure.
Disruptions in fuel supply lead to higher prices for consumers, which adds to the increased costs RFS has already inflicted. Studies indicate that the program is inflating gasoline prices by as much as 30 cents a gallon. Consumers are paying more to fill up their tanks and more for the millions of goods that rely on diesel-fueled trucks to transport those products throughout the country.
Inflated fuel prices aren’t the only troubling aspect of RFS. Other costs abound.
Diverting corn to biofuel has increased prices by 30 percent, raising costs for a variety of foods. The sharp rise in vegetable oil use has caused “price, availability, and volatility” issues along the food supply chain. And soybeans are being “crowded out by the biofuel market,” causing prices to soar nearly 120 percent. Increased food costs hurt family budgets.
Despite original intentions of reducing emissions and being environmentally beneficial, “there is evidence” that biofuels have “caused environmental degradation greater than the fossil fuels they were purported to replace.”
The carbon intensity of corn ethanol is 24 percent higher than gasoline. Increased fertilizer use for the influx of corn farming has led to soil erosion, seeping into groundwater and polluting local waterways. Increased demand for soybean and palm oil products has inflicted extensive deforestation.
Negative consequences aside, the original purpose of depending less on foreign nations by stretching our inventories no longer has relevancy. The energy landscape has dramatically changed since RFS was enacted.
Thanks to the shale revolution, U.S. oil production has boomed. The Energy Information Administration predicts production to “remain historically high” for decades. Once we thought that our supplies were drying up, the rebound of oil and natural gas has turned the tide; it is hardly necessary to supplement our reserves with biofuels.
Increasing RVOs further risks inflating gas prices, jeopardizes food supply and prices, hurts small refineries, and pollutes. Lawmakers need to re-evaluate how they configure RFS levels and the effect these standards have on consumers, the economy and the environment.
