OPIS Insights

The Trump Administration’s Unified Agenda, released on July 3, conspicuously omits the 2028 Renewable Fuel Standard (RFS) volume requirements (Set 3) from the Environmental Protection Agency’s (EPA) 2026 rulemaking agenda. The Unified Agenda is the government’s primary tool for forecasting agency priorities, listing rulemakings planned for the near and long term. The absence of a Set 3 “prerule” or “proposed rule” signals that the rulemaking will not proceed on schedule.

By statute, the EPA must finalize the 2028 Renewable Volume Obligations (RVOs) 14 months prior to the start of the compliance year, effective by Oct. 31, 2026. In practice, the agency has rarely met this statutory deadline, often finalizing multi-year RVOs months late. The omission from the Unified Agenda thus suggests another delay is likely.

Set 3 will establish the first RVOs under a restructured program that considers the import RIN reduction (IRR) provision, small refinery exemption (SRE) policy and reallocation mechanics, and the 45Z tax credit. Except for the tax credit, all these provisions are currently under legal challenge. In June, the U.S. Court of Appeals for the D.C. Circuit consolidated multiple lawsuits challenging not only the record-high 2026-2027 RVOs (Set 2) but also the EPA’s handling of SRE approvals, reallocation and the elimination of e-RINs.

While the EPA can legally issue a Set 3 proposed rule, the ongoing litigation injects significant uncertainty into the 2028 baseline. The agency cannot accurately finalize the 2028 RVOs while the Set 2 remains under judicial review. A court ruling that lowers the current record-high mandates would undermine the projections necessary for 2028. Moreover, if the D.C. Circuit strikes down or alters the 70% SRE reallocation mechanism used for the Set 2, the EPA would have to retroactively adjust how it calculates SREs for the 2028 mandate.

Beyond litigation, the EPA must also estimate how much renewable fuel the market can deliver when a large share of current feedstock is slated to lose half its value. The IRR provision would reduce credit values by 50% for foreign fuels and feedstock starting in 2028. Yet constructing a legally defensible trade and environmental mechanism is nearly impossible while the broader RFS framework remains entangled in court.

Given these challenges, the agency is likely waiting for a D.C. Circuit decision before drafting a Set 3 proposed rule. This delay could trigger obligated parties to hoard carryover RINs from 2026 and 2027 as a buffer. They would also adopt a “wait-and-see” approach, reluctant to buy premium-priced credits without knowing whether their 2028 blending obligations will increase or decrease. This behavior could cause spot market volumes to plummet, restrict liquidity and trigger sharp, unpredictable price swings.

Domestic crushers, soybean producers, and renewable diesel facilities would struggle to price long-term forward contracts. Feedstock prices would then be tied to short-term volatility and weather patterns rather than stable, government-backed demand. The agricultural sector is already facing headwinds from the U.S.-Iran conflict, which is raising fertilizer costs for the 2027 crop year. A delayed Set 3 rule could lower crop yields and reduce grain supply, ultimately affecting D4 and D6 RINs by shrinking biofuel feedstock volumes.

Moreover, without the final Set 3 rule, the IRR provision cannot be enforced. Foreign fuels and feedstocks are likely to continue flooding the market, generating full-value D4 and D6 RINs. This temporary oversupply of credits could artificially depress D4 RIN prices. However, if the EPA signals that it will retroactively enforce the IRR provision once the Set 3 rule is finalized, D4 prices could swing sharply upward.

Under the RFS, an obligated party may run a compliance deficit, deferring a portion of their blending obligations to the next calendar year. However, the Clean Air Act prohibits running a deficit two years in a row. Obligated parties who pushed their 2026 compliance penalties into 2027 could find themselves trapped. They would need to buy and retire RINs to clean their 2026 deficit by the end of 2027, regardless of how high RIN prices spike or how delayed the 2028 rules are.

Combining already shrinking D6, D4, and D5 carryover banks with a delayed Set 3 rule would create a market bottleneck. Specifically, a compliance deficit crisis would rapidly drain the remaining carryover banks, as a delayed rule prevents forward credit planning. Because RFS compliance tiers are nested, the D6 carryover bank would disappear first, with obligated parties using D4 and D5 RINs to cover D6 credits. If the banks are depleted to zero, obligated parties could face penalties for unavoidable non-compliance.

The omission of Set 3 from the Unified Agenda is more than an administrative footnote. It signals that the EPA could be waiting for judicial clarity before moving forward. In the meantime, the biofuel market faces a cascade of uncertainty. The longer the delay in a final rule, the more acute these pressures become.