Key Areas for Regulatory Engagement with the Trump Administration’s Emphasis on Biofuels

Overview

Among its energy policy priorities, early executive orders, and other actions, the Trump administration has reinforced its commitment to expanding the U.S. biofuels sector, which typically has strong bipartisan support in Congress. 

Biofuel producers, agricultural feedstock providers, blenders, consumers, distributors, and retailers have a unique opportunity to engage the Trump administration, working with officials to identify and implement concrete actions or regulatory changes to bolster biofuel production and availability in the U.S. 

Key Issues for Immediate Engagement

The new administration’s energy initiatives create a unique and time-limited opportunity to expand regulatory support for biofuels. But there is a risk that agencies will allow biofuels to slip behind other priorities, given the administration’s ambitious list of goals and finite agency resources. The ongoing budget process could also significantly affect federal programs and funding related to this sector. Stakeholders must engage promptly to ensure that biofuels receive full attention in the months ahead and develop robust legal analysis to ensure that agency decisions will hold up in court. 

To turn the administration’s policy pronouncements into durable regulatory progress, biofuels industry stakeholders should focus on certain key issues:

• The U.S. Environmental Protection Agency (EPA) Renewable Fuels Standard needs timely and legally defensible issuance of the “set rule” establishing the Renewable Volume Obligations (RVOs) and the RVO must adequately support and spur increased biofuel production.
• U.S. Department of Treasury (DOT) and Internal Revenue Service (IRS) are implementing the Clean Fuel Production Credit (CFPC) under IRS Code §45Z. In addition to DOT, engagement should include EPA, the U.S. Department of Agriculture (USDA), and the U.S. Department of Energy (DOE).
  • On January 10, 2025, the previous administration issued guidance on implementing §45Z, including a notice of intent to propose implementing regulations (Notice 2025-10) and a notice providing initial guidance on emissions rates for the CFPC (Notice 2025-11). 
  • The CFPC went into effect this year and is authorized only through 2027; timely issuance of final regulations is critical to providing regulatory certainty necessary to unlock investment in biofuel production.
  • The comment period on the draft text of the proposed implementing regulations and the emissions rates closes on April 10, 2025.
  • Key inputs will include treatment of feedstocks and assessment of greenhouse gas reductions associated with biofuels under the Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model, including how the model accounts for indirect land use and “climate-smart” agricultural practices.
• Seek to pivot “climate-smart” policies as appropriate. The Biden administration took a number of actions to promote the expanded use of biofuels as a tool to address climate change. See USDA Climate-Smart Agriculture and Forestry Strategy (2021). The Trump administration will now have to decide whether to continue those policies in some form, which would be consistent with the new administration’s support for biofuels, or rescind them as part of the more general rescission of actions by the last administration.
• Engage government agencies to access funding that provides critical support for biofuel development and production; examples include USDA’s Rural Development Office, DOE’s Loan Programs Office, and DOE’s Bioenergy Technologies Office.

Beveridge & Diamond's Renewable Energy practice helps investors, developers, and businesses navigate the environmental and regulatory complexities of renewable energy and biofuels projects. From siting and permitting to operational compliance and risk mitigation, we advise on issues such as land use, hazardous material, and waste, as well as regulatory compliance and securing key approvals under federal and state low-carbon fuel standards (LCFS). Our experience in regulatory policy, permitting strategies, and environmental compliance enables us to guide clients through transactions, development, and ongoing operations.