August 21, 2025
For anyone involved in blending biofuels, understanding Renewable Volume Obligations (RVOs) under the U.S. EPA Renewable Fuel Standard (RFS) is essential. RVOs are annual mandates set by EPA that require refiners and importers of gasoline and diesel to blend specific volumes of renewable fuel into the nation’s fuel supply. RVOs set the demand for RINs for each compliance year and serve as the enforcement mechanism for the RFS.
How RVOs Work
Understanding how RVOs work involves several key steps:
Step One: EPA Sets the National Targets
Each year, EPA sets national renewable fuel volume targets. These targets are divided into categories, such as:
- Conventional biofuel
- Advanced biofuel
- Biomass-based diesel
- Cellulosic biofuel
To set these targets, EPA considers various factors including projected production capacity, fuel demand, environmental impact, and market limitations.
By law, volume requirements must be finalized at least 14 months before the compliance year begins, giving stakeholders time to prepare.
Step Two: Obligated Parties Calculate Their Share
Once EPA releases the volume targets, obligated parties—refiners and importers of gasoline and diesel—must determine their individual obligations. EPA calculates a percentage-based requirement, which each party applies to its own fuel production or import volume. This calculation determines how many RINs they must retire for compliance.
Step Three: Acquiring RINs
Obligated parties have two primary options for obtaining RINs:
- Blend renewable fuels directly, keeping the associated RINs.
- Purchase RINs from other parties that do not have an obligation (blenders) or have excess credits.
A useful way to visualize this is to think of RINs as colored eggs in a basket. Each company must fill its basket with the correct amount of each egg color to meet the requirements—either by blending the non-renewable fuel with renewable fuel or buying RINs from others.
Step Four: Demonstrating Compliance
At the end of each compliance year, obligated parties must retire the appropriate number of each type of RINs. This demonstrates that they have fulfilled their share of the national renewable fuel mandate.
Step Five: Compliance Flexibility
The RFS provides some flexibility to help fuel refiners and importers meet their obligations:
- Banked RINs: Parties may use a limited number of RINs carried over from the previous year.
- Small refinery exemptions (SREs): Historically, small refiners could apply for hardship exemptions, but these have faced repeated legal challenges and are currently in limbo as they work their way through the federal court system.
- Deficit carryover: If a party cannot meet its obligation in a given year, it may carry a deficit into the following year—but only for one consecutive year.
The Future of RVOs
After 2022, EPA transitioned from congressionally mandated targets to EPA-determined volumes, known as the “Set Rule” era. While this change now allows EPA to consider an even broader range of factors it has also introduced growing pains.
For example:
- EPA overestimated the supply that would be available of D3 RINs when setting the 2024 number, forcing it to issue a revised rule, which wasn’t finalized until June of 2025, causing a massive delay in compliance.
- EPA has now also missed its deadline to issue the 2026 RVOs. Stakeholders are still waiting for guidance, with no clear timeline from EPA.
- Lastly, concerns are growing again as the 2027 targets remain a mystery. EPA has until November of 2025 to issue these to meet its statutory deadline.
As the agency adjusts to its expanded authority, timeliness and transparency will be key to ensuring confidence in the program and minimizing disruption across the fuel supply chain.
By Tori Reese, Compliance Advisor