ORLANDO (DTN) -- It's anyone's guess when the Trump administration will finalize the latest Renewable Fuel Standard volumes proposal, but a public affairs consultant to the biofuels industry said that he's optimistic it will be completed by no later than March.

For the biomass-based diesel and renewable diesel industry, that means it could be a crazy 2026 as plants return to full production in what could be a nine-month production year that could demand 2 billion more gallons of biofuels.

Anthony Reed, a partner at FGS Global, said during a panel discussion at the Clean Fuels Alliance America conference here on Tuesday that plants across the country will need to ramp up production in a hurry.

"We've been under generating for the last year, obviously almost entirely due to policy uncertainty, but we're gonna have to deliver on the numbers in '26 to give the administration confidence to write a strong follow-up on set three (next RFS rule)," Reed said.

"And I think everything we've kind of heard is that they're looking to do a three-year rule the next time to be done with RVOs (renewable volume obligations) for the rest of this administration. ... And we don't have that year delay when a new administration takes hold. So, again, we got to deliver in '26 to be able to set the stage for a next strong RVO."

The latest RFS proposal was required to be finalized by Nov. 1, 2025, but was set back in part by a supplemental rule from the U.S. Environmental Protection Agency to potentially reallocate RFS gallons waived through small-refinery exemptions to other obligated parties.

"I do think that EPA very much wants to solve all these questions so that there is certainty in there, so they're willing to take a little bit more time to give everyone more certainty around all these questions," Reed said.

"... We are still waiting for it to go to OMB (White Office of Management and Budget) for interagency review," Reed said. "Kind of what we've been hearing is that the administration needs to make a final decision on how they're going to address the final numbers, what are they going to do on the import RIN (renewable identification numbers), and then what are they going to do on SREs. And once those decisions are made, it's going to have to go to EPA to write it up."

That means a final RFS is likely six to eight weeks away from completion, he said. The Trump EPA has proposed devaluing biofuel renewable identification numbers by 50% for those fuel producers that use feedstocks from foreign countries.

"I continue to be very cautiously optimistic, and things continue to go in and are going in our way," Reed said.

"I think we have an administration that really wants to help on all of these fronts. I hope this is worth the wait. I think it will be."

HISTORICAL PERSPECTIVE

Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America, said that although the wait to see the final RFS volumes has been going on for a while, it is important to remember what is yet to come -- a jump in the biomass-based diesel number from 3.5 billion gallons to at least 5.25 billion gallons.

"I don't think it can be overstated how significant this proposal is compared to where we have been in the past," he said.

"I've been around the RFS since its inception in 2005. You know, we started having conversations with the career team at EPA early last year, probably a year ago at this time. And it was the first time that we've ever encountered the career team, and they kind of proactively acknowledged the need for what was referred to at that time as a step change for biomass-based diesel."

Kovarik said the Trump administration quickly recognized that the three-year RFS set-one proposal that provided a biomass-based diesel volumes increase across three years of 590 million gallons was "woefully insufficient" and led to the "headwinds" the industry has faced.

"But then the second component of that is convincing the political class that this, you know, picking up the mantle of pro-biofuels is worth the fight with the refiners or environmentalists or other stakeholders who've always been opposed to it," Kovarik said.

"We could not have a more favorable administration when it comes to delivering on the promise of biofuels, whether that's energy dominance, the value add to rural America, all of those components. It really is refreshing when we aligned with the Petroleum Institute" to ask for 5.25 billion gallons, above and beyond the 2025 RVO of 3.35 billion gallons. "I mean, let that sink in a little bit. Sometimes I think I'm dreaming and I'm going to wake up and I'm going to hit reality."

Kovarik said the industry is facing additional headwinds from claims by many petroleum interests and others that fuels like biodiesel are raising the price at the pump.

"While we may feel like we're winning now, we certainly haven't won," Kovarik said. "There's a lot of work that needs to be done and vigilance that needs to be maintained. But the good news is, I think, folks who are trying to address the crisis in the ag economy see the opportunity for biofuels to be a market driver that delivers value and helps alleviate some of that, those economic headwinds."

SMALL-REFINERY EXEMPTIONS PROPOSAL

Exactly what approach the Trump administration decides to take on reallocating volumes from small-refinery exemptions -- whether it's zero reallocation or 100% -- is expected to play a significant role in the future of the biofuels industry.

In July and August of 2025, the EPA granted numerous exemptions for 2023 and 2024, and others are pending for 2025. The gallons exempted for 2023 and 2024 total nearly 3 billion gallons.

"We've continued to say that going forward, grant them, don't grant them, but be judicious; you should only get them if you really need them," Reed said.

"The program's been around for 20 years; people surely should have been able to adjust for that by now."

The other part of the equation is that EPA has been prospectively estimating what SREs will be granted in future years.

At the end of the first Trump administration, the industry was successful in getting the EPA to account for SREs by taking a three-year average of what SREs were granted and automatically adding them back into the next year's RFS volumes.

"So, really, the fight that we're arguing about is how much of these SREs from '23 to '25 will be added back into the RVO or not," Reed said.

"We continue to feel very confident that they will continue to estimate SREs for '26 and '27. This is just about making sure we're made whole at the end of the day."

Kate Shenk, director of regulatory affairs for Clean Fuels Alliance America, said the industry has been informing the EPA about the potential effects on agriculture that the reallocation decision could have. Clean Fuels conducted a study to look at how reallocation could affect soybean prices.

"Through this study, we saw that if EPA fails to reallocate 100% of SREs granted, that would reduce demand and also lower the price of soybeans by 20 to 40 cents a bushel over the next two years," she said.

"And really hitting home to the administration, what farmers have to lose based on these proposals has been really helpful, and it's got a lot of traction with the administration, sort of reaffirming our position, how much we need 100% reallocation going forward."

Todd Neeley can be reached at todd.neeley@dtn.com

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