EPA raises 2027 renewable fuel mandate as year-round E15 stays stuck in the Senate

The Trump administration raised the renewable fuel requirements for 2027, a signal to ethanol and biodiesel producers that the RFS obligations are heading up rather than flat. Blenders and jobbers should mark that, because bigger required volumes support RIN demand and give plants a reason to keep running hard.

The frustration is that the demand side stays capped by a fuel that cannot be sold all year in most of the country.

E15 stall

National permanent year-round E15 is sitting inside a farm bill that has gone nowhere in the Senate. Troy Knecht, a South Dakota farmer, president of the American Coalition for Ethanol, and a Redfield Energy board member, told producers at ACE's conference in Minneapolis on Thursday that the stall stings because Senate Majority Leader John Thune is from his own state. Knecht recalled watching Thune campaign against Tom Daschle at a farm show back in 2004 or 2005. Brian Jennings and others, including Skor, keep pushing for the same permanent access. Without it, plants build ethanol that hits a wall from June to September in conventional-gasoline markets.

Production and stocks

US ethanol output fell to a five-week low in the week ended August 14. The Renewable Fuels Association, reading EIA data, put production down 2.5% to 1.09 million barrels a day, or 45.74 million gallons daily. That is still 1.6% above the same week last year and 6% above the five-year average, so production is holding up.

Inventories are the number to watch. Stocks rose 1.3% to 25.1 million barrels, the highest since early May and more than 10% above both year-ago and five-year levels. Exports helped at 129,000 barrels a day. Gasoline supplied to the US market dropped 3.1% to an 11-week low, which is the soft spot under all of this: more ethanol sitting in tanks while gasoline demand cools.

Andersons and a settlement

The Andersons (ANDE), a big agribusiness and renewables name, has pulled back 12.7% over the past month and 3.6% over 90 days. The longer view still looks strong, up 27.7% year to date and 79.5% on a one-year total return. No specific catalyst drove the recent slide.

In Illinois, an ethanol plant agreed to pay for wetland restoration at the Emiquon wildlife refuge as part of an Illinois River pollution settlement, a reminder that plant-level environmental exposure is real money.

What to watch

The 2027 RFS numbers matter only if E15 gets a permanent year-round fix, so watch whether the farm bill moves in the Senate. Watch ethanol stocks: another build against falling gasoline demand could pressure margins into the fall.