On March 27, the Trump administration finalized what is being called the most significant renewable fuel mandate in the 20-year history of the Renewable Fuel Standard. The "Set 2" rule sets biofuel blending requirements for 2026 and 2027 at record levels, and the downstream effects are going to be felt across every layer of the feedstock supply chain, starting with the people collecting used cooking oil from restaurants.
What happened
During an event celebrating agriculture at the White House on Friday, Donald Trump addressed several initiatives that will likely impact producers. The administration finalized the 2026 and 2027 Renewable Volume Obligations at levels higher than originally proposed. Biomass-based diesel volumes were set at roughly 5.4 billion gallons for 2026 and 5.7 billion gallons for 2027. To put that in perspective, biodiesel and renewable diesel production must increase by over 60 percent compared to 2025. That is not a small bump. That is a fundamental shift in how much fuel needs to be produced and how much feedstock is needed to make it happen.
The rule also includes a 70 percent partial reallocation of volumes that were previously waived through small refinery exemptions, which means the actual blending obligation on refiners is even higher than the base numbers suggest.
The EPA estimates the rule will generate over $10 billion for rural economies and create more than 100,000 new jobs in the agricultural and manufacturing sectors. Industry leaders across the board called the announcement historic. Clean Fuels Alliance America said producers are eager to bring 7 billion gallons of existing production capacity up to speed to meet the new requirements.
Why this matters for UCO collectors
Renewable diesel and biodiesel plants run on feedstock. The primary inputs are soybean oil, animal fats, and used cooking oil. When the government mandates a 60 percent increase in production, that demand has to be met with actual gallons of raw material. There is no way around it.
Used cooking oil is already one of the most sought-after feedstocks in the renewable fuels supply chain. It has a favorable carbon intensity score under programs like California's Low Carbon Fuel Standard, which makes it especially valuable for producers trying to maximize credit generation. With this new mandate, competition for UCO supply is only going to increase.
If you are a UCO collector, this is the clearest demand signal the market has sent in years. More production capacity coming online. More gallons needed. More buyers competing for your product.
The domestic feedstock advantage
There is another piece of this rule that matters. Starting in 2028, foreign fuels and feedstocks will receive half the RFS compliance value compared to American-made products. The EPA framed this as giving domestic producers time to prepare while ensuring that American farmers and collectors benefit from the program.
For UCO collectors operating in the U.S., this is a big deal. It means every gallon of used cooking oil collected domestically carries more compliance value than imported feedstock. That makes your supply more attractive to refiners and producers who need to meet their blending obligations efficiently.
The days of cheap imported UCO undercutting domestic collectors may not be over, but the playing field just tilted in favor of the people doing the work on the ground in the U.S.
What to expect going forward
The biodiesel and renewable diesel industry went through a brutal stretch over the past two years. Plants shut down. Production dropped by a third in 2025. Feedstock prices were volatile. Regulatory uncertainty around the 45Z tax credit and delayed RVOs made it nearly impossible for producers to plan ahead.
This rule changes that. It gives the industry a two-year runway with clear volume targets and strong demand signals. Producers are going to ramp up. Soybean crush capacity is expanding. Renewable diesel plants that went idle are coming back online. And all of that activity flows directly back to feedstock demand.
For UCO collectors, the takeaway is simple. The market just shifted. Demand for your product is going up. Domestic supply is about to carry a premium. And the policy backdrop finally supports growth instead of uncertainty.
Now it is time to go to work.
