Your Questions on the RFS, RINs and RVO Answered

Q&A with Jason Lawrence

Amid uncertainty about biofuels policy in D.C., we sat down with Jason Lawrence, Senior Business Development, Team Lead Fuel Sales from Chevron, to unpack what you need to know about the Renewable Fuel Standard (RFS), Renewable Volume Obligation (RVO), and Renewable Identification Numbers (RIN).

Q: What is the RFS and how does this policy continue to impact the renewable fuels industry?

A: The RFS is a national policy designed in 2005 that requires a certain volume of renewable fuels to be blended into transportation fuels and home heating oil. It was expanded and signed in 2007 as part of the Energy Independence and Security Act and aimed to move the U.S. towards greater energy independence and security; increase production of renewable fuels; protect consumers; and promote research and deployment of greenhouse gas capture and storage options.

There are four categories of the RFS, including biomass-based diesel, cellulosic biofuel, advanced biofuel, and total renewable fuel. The RFS was intended to drive production and demand for the renewable fuels industry.

Q: What are RINs and how are they related the RFS?

A: RINs are credits used for RFS program compliance and are the “currency” of the RFS program. Every gallon of renewable fuel produced — biodiesel, renewable diesel, ethanol, etc. — generates a 38-character unique identification code, the RIN, to accompany it. RINs are obtained and retired by obligated parties, which are typically larger petroleum refiners. Because these parties are obligated to obtain RINs as a compliance mechanism to adhere to the RFS, RINs have an inherent value and are traded daily in an open market.

Q: How do RINs impact non-obligated parties, or those refiners who fall outside of the major volume category?

A: Non-obligated parties can choose to buy their fuel with or without RINs. More sophisticated businesses may have an internal RIN trader who can trade RINs and create another revenue stream for the organization.

Businesses who do not have a trader may choose to purchase the fuel without RINs to eliminate their risk altogether. Fuel that is purchased without RINs typically receives a net price at a lower value for the customer, alleviating the need to trade RINs.

Q: How is the RVO impacting RIN values?

A: The RVO is the volume of renewable fuels that obligated parties are required to sell based on a percentage of the company’s total fuel sales. The EPA sets the RVO periodically, so as it changes, the values of RINs change.

The new RVO has not been set by the Environmental Protection Agency (EPA) for 2026 but was due by statute in November 2024. The industry was awaiting these numbers to correct what we collectively felt were too low of targets in 2023, 2024 and 2025 for the biomass-based diesel category. The RVO has been significantly below what the industry can achieve, which has resulted in a crash in RIN prices, stifled production facility growth, halted planned facility expansions and idled other operations.

When the RVO is higher, the market grows, and when it is lower, it tends to stay stagnant or shrink. It is our position that the EPA can, and should, correct this miscalculation and set higher RVO volumes for 2026 and in coming years.

Q: What other policies are impacting the value of RINs?

A: As you have heard across the board, policy is a big driver for the value of RINs. In addition to the outstanding RVO levels, new tax credit policy also hangs in limbo. Historically, the industry had what was called the Blenders Tax Credit (BTC) — which was a tax credit for blending biodiesel and renewable diesel. When that expired at the end of 2024, a new credit called the Clean Fuel Production Credit, or 45Z, took effect.

The main difference between the two is that the BTC gave a $1 credit per gallon for blended biodiesel, renewable diesel and sustainable aviation fuel. Both domestic and imported fuel was eligible for the BTC. 45Z credits are based on carbon intensity (CI) scoring; raw materials have different CI scores and offer varying levels of credit. The issue here is the model that provides guidance on different feedstocks’ CI scores (called the GREET model) was not finished by the Biden administration before the transfer of power to the Trump administration, so direction on the value of inputs is not finalized, which has a large impact on the price of renewable fuels and the value of RINs. In addition, the 45Z credit is currently only available to domestic producers while eligible fuel may only be derived primarily from domestic feedstocks.

Q: Are there state policies that impact prices apart from the RFS?

A: Yes, different states have different policies, which impact trade flows, and where it is advantageous for producers to send fuel based on where they get a better value for their production, where they can stack different credits on, and so on. Fluctuating credits are not new for the industry.

The most prominent example of this is California’s Low Carbon Fuel Standard that highly incentivizes the use of lower carbon fuels. The California Air Resources Board (CARB) requires certain vehicles in California to use R99 or R100 renewable diesel fuel. While California’s policy is the most aggressive, many states have implemented policies that may impact price. For example, Pennsylvania has had a 2 percent biodiesel blend mandate since 2010. In New York, there is a mandate for 5 percent biodiesel blend — and that rises to 10 percent in July of 2025.

As more states add or increase their policies around renewable fuels, the need for higher RVO becomes increasingly greater.

Q: What advice do you give to businesses navigating the market amidst the policy uncertainty?

A: There was a very big movement in the last administration to electrify everything, which is not a practical solution for consumers across the board. Changing to an electric pump, in the home heating oil market, comes with challenges like the cost of changing the system and a potentially steep rise in your energy bill. There is also the challenge that electric heat pumps face in struggling to keep up during spells of extremely cold temperatures, which in the Northeast may not be practical.

Alternatively, Bioheat® is a blend of biodiesel and ultra-low sulfur heating oil. Heating oil distributors and their customers have come to rely on Bioheat to safely and affordably heat their homes and businesses. It is the lower carbon solution they are looking for, without the need to adjust their existing system while taking advantage of credits as they are decided.

Jason Lawrence is Senior Business Development Executive at Chevron. He can be reached at (717) 989-1313 or jason.lawrence@chevron.com.

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