August 12, 2026
In March 2026, EPA released record high 2026-2027 blending obligations under the Renewable Fuel Standard (RFS). These record high targets quickly became the subject of a lawsuit in the U.S. D.C. Circuit Court of Appeals – with parties filing suit from all directions. How the court rules with respect to these challenges will directly shape how EPA sets future renewable volume obligations (RVOs) and could impact demand for the current year targets under consideration.
The Rule at Center of the Fight
Since EPA announced the Set 2 Rule, impacted parties are choosing a side when it comes to this challenge to renewable fuel blending mandates.
- Released at the end of March 2026, the Set 2 rule established the highest blending requirements in the 20-year history of the program for Renewable Volume Obligations (RVOs) for 2026 and 2027.
- In June, the U.S. Court of Appeals for the D.C. Circuit consolidated eight petitions that challenged the Set 2 rule (Case No. 26-1132). Certain oil refiners say the rule costs too much. Certain environmental groups say it does little to protect the environment. Meanwhile, the biofuels associations have moved to defend the rule.
- The rule took effect June 15, 2026, and remains in effect while the consolidated litigation proceeds.
Who’s Challenging It and Why
American Fuel & Petrochemical Manufacturers (AFPM), representing large and small refiners, is arguing the rule is unlawful and financially impractical. AFPM has called Set 2 the single most expensive regulation of this president’s second term.
Representing environmental groups perspective, the Center for Biological Diversity (CBD), joined by Sierra Club, are arguing the rule reflects inadequate environmental review.
Who’s Supporting the Rule
Four biofuels- and agriculture-aligned trade groups have moved to intervene in support of EPA. The members of these organizations would be negatively impacted if court rulings led to reduced blending targets.
Growth Energy, the country’s largest biofuels trade association, argues the RFS functions as intended by supporting energy security and rural economic goals, and that the rule poses no real threat to small refineries’ continued operation.
Renewable Fuels Association (RFA), representing domestic ethanol producers, argues its members’ production and profitability would be directly harmed by any reduction in Set 2 volumes.
National Oilseed Processors Association (NOPA), representing soybean and other oilseed processors, says the rule provides certainty for farmers, processors, and biomass-based diesel producers, and highlights over $6 billion in industry investment in expanded U.S. processing capacity since 2023.
Clean Fuels Alliance America, representing biodiesel and renewable diesel producers, points to two-year-high soybean prices as evidence the RFS is supporting the broader agricultural supply chain.
No timeline for oral arguments has been set by the D.C. Circuit. But all parties in the RFS are keeping their eye on this one, anticipating how it might impact the marketplace and RIN prices.
– Rhonda O’Connor, Director of Operations, Compliance & Communications