The EPA’s “Set 2” final rule establishes the highest renewable fuel volume requirements in the program’s 20-year history – requiring a 60% increase in biodiesel and renewable diesel production and permanently removing renewable electricity (eRINs) as a qualifying fuel. Most provisions took effect June 15, 2026. The rule is now facing consolidated legal challenges in the D.C. Circuit, but compliance obligations apply unless and until a court orders otherwise.
Background
The Renewable Fuel Standard (RFS) requires fuel suppliers to blend minimum volumes of renewable fuel into the US transportation fuel supply each year. “Set 2” establishes Renewable Volume Obligations (RVOs) for 2026 and 2027. EPA announced the rule at the White House on March 27, 2026; it was published in the Federal Register on April 1, 2026 (91 Fed. Reg. 16388), and most provisions took effect June 15, 2026. Full rule details are on EPA’s final RFS standards page.
Key Provisions
Record Volume Requirements
Total applicable renewable fuel volumes are set at 25.82 billion RINs for 2026 and 25.98 billion RINs for 2027 – the highest in program history. EPA projects these mandates will require biodiesel and renewable diesel production and use to increase by over 60% compared to 2025.
SRE Reallocation
The rule finalizes a 70% partial reallocation of the 2023–2025 small refinery exemption (SRE) volumes into the 2026 and 2027 standards, tightening the compliance market and supporting RIN values.
eRINs Removed; Import Parity Ends
Renewable electricity is permanently removed as a qualifying fuel under the RFS. Notably, EPA did not finalize the proposed 50% RIN reduction for imported renewable fuels and feedstocks – the agency deferred that provision, signaling intent to address it by 2028 through a separate rulemaking. A partial waiver reduces the 2025 cellulosic biofuel volume from 1.38 to 1.21 billion RINs.
Delayed Equivalence Values
The revised equivalence value for renewable diesel – lowered to 1.5, matching biodiesel – takes effect starting 2027 rather than immediately; producers may petition EPA to increase their value to 1.6. A transition-planning detail that matters for RIN generation forecasting in the second half of 2026.
Litigation Update
In June 2026, the American Fuel & Petrochemical Manufacturers petitioned the D.C. Circuit for review of the Set 2 rule, and environmental organizations filed separate challenges. Growth Energy and the Renewable Fuels Association moved to intervene in the consolidated cases in late June in defense of the volumes. The rule remains fully in effect during litigation; obligated parties should not treat the challenge as compliance relief.
What This Means by Segment
- Biodiesel / renewable diesel producers: Strong, multi-year demand signal; the SRE reallocation supports RIN values. Watch litigation for long-horizon investment decisions.
- Ethanol producers and feedstock suppliers: Conventional volumes provide continued market certainty; monitor E15 legislation for incremental demand.
- Parties that anticipated eRINs: Any compliance strategy built on eRIN pathways must be updated.
- Obligated parties and blenders: RIN accounting, blending contracts, and procurement must reflect the new volumes now; equivalence-value changes hit January 1, 2027.
Action Checklist
- Update RIN accounting and blending contracts to the new 2026–2027 volumes – the rule is in effect.
- Re-forecast RIN generation for renewable diesel and renewable jet ahead of the January 1, 2027 equivalence-value change.
- Replace any eRIN-based compliance planning.
- Monitor the consolidated D.C. Circuit litigation – relevant to long-term RIN positions, not current-year compliance.
Trinity provides RFS registration, pathway petition, engineering review, and RIN accounting support. To discuss what the Set 2 volumes mean for your compliance position, reach out to Alex Marcucci.
