Commodities
US Petroleum Trade Group Challenges EPA Over Biofuel Mandates
The American Fuel & Petrochemical Manufacturers trade association has filed a lawsuit challenging the US Environmental Protection Agency's biofuel blending mandates, it said on Wednesday, citing high compliance costs and a potential surge in fuel prices.In March, the EPA finalized the 2026-2027 renewable fuel standard volumes under "Set 2" rule, which the AFPM described as "the largest and most expensive RFS iteration in history."The EPA earlier said that this final rule reflects "significant" increases in biofuel volumes reflecting growing domestic capacity and creates a stable market for US agricultural crops. The rule will increase domestic energy supply by around 300,000 barrels per day.However, AFPM argued that the cost of complying with the RFS Set 2 mandate is expected to exceed $106 billion over the next two years, equivalent to $0.26 to $0.35 per gallon of gasoline and diesel. Recently, the cost hit an all-time high above $0.35/gallon."This is the inevitable consequence of EPA finalizing an unlawful, impracticable regulation, which AFPM is formally challenging on behalf of our members - the refineries that supply gasoline and diesel fuel to the US market - and consumers of these fuels around the country," said AFPM President and Chief Executive Chet Thompson."Without a solvent RIN bank, the only way to comply with the RFS will be by reducing the amount of transportation fuel supplied to the US market as only gasoline and diesel fuel sold domestically incurs an RFS obligation, while exported fuels do not," according to the trade association.AFPM also claimed that EPA's own regulatory impact analysis showed that the final rule would cost Americans more than $20 billion per year, far exceeding its benefits of $400 million.The EPA did not immediately respond to' request for comment.The agency said in March that, to meet the "historic" 2026 and 2027 volumes, production of biodiesel and renewable diesel should increase by more than 60% from 2025 levels. This would generate more than $10 billion for rural economies, with net farm income increasing by $3 to $4 billion.
