US forecasts record biofuel production

The US Environmental Protection Agency (EPA) has released new forecasts for the next two years as part of its Renewable Fuel Volume Obligations (RVO) program.

Biomass-based biodiesel production is expected to reach 17.9 million tons in 2026 (11 million tons in 2025) and 18.9 million tons in 2027.

Biomass-based biofuels are produced from vegetable oils (soybean, rapeseed), animal fats, and recycled vegetable fat. They have been included in the RFS since 2007. The initial RVO program in 2009 was 0.5 billion gallons, but by 2025, it had grown to 3.35 billion.

Experts note that from 2012 to 2020, soybean processing volumes for biofuels remained stable at 1 billion gallons, but since 2021, rising demand has led to expansion of refining capacity and a surge in soybean oil prices.

The EPA’s initial proposal for 2026-2027, significantly exceeding industry demand, caused soybean oil futures to rise 18% in two days. However, subsequent delays in approval, amid the Trump administration’s dismantling of several clean energy programs, led to a 10% decline in the nearest contract by early 2026.

Factors that precipitated the final announcement included growing discontent within the agricultural community and the sharp rise in energy prices following the strikes on Iran in late February.

The final decision also authorized a full tax deduction for imported raw materials, including used vegetable oil from China, until 2028.

Previously, the USDA’s March 31, 2026, forecast that U.S. soybean acreage would reach 84.7 million acres (up 4% from 2025), with soybean exports to China projected to be below the five-year average (25 million tonnes) for the next three crop years.

Producers are expected to increase soybean acreage in response to growing domestic demand for biofuels, similar to the corn market’s adaptation to ethanol in the 2000s.

Tags: USA, biofuel