Where is Canadian Canola Oil Headed?
EPA finalizes 2026-2027 RFS mandates and 2028 import restrictions
Americas | Fuel | Policy
SIGNAL
In March 2026, the US Environmental Protection Agency (EPA) finalized the Renewable Fuel Standard (RFS) for 2026-2027. The mandatory blending volume for 2026 is set at 26.81 billion RINs, increasing to 27.02 billion RINs in 2027, a significant rise from the proposal.
The EPA stipulated that the exemption rate for small refineries in the 2023-2025 compliance years would increase to 70% to ensure obligation fulfillment. New regulations require biofuel and renewable diesel production and usage to grow by over 60% compared to 2025 levels. However, discriminatory provisions targeting foreign feedstocks take effect in 2028, at which point foreign-produced fuels and feedstocks will be eligible for only 50% of the RINs allocated to domestic products. This will substantially weaken the competitiveness of imported feedstocks like Canadian canola oil. In response, Canada launched the "Biofuel Production Incentive Program" in January 2026 to sustain domestic capacity.
CONTEXT
U3X is dedicated to global sustainable fuel development. Through cooperation with global resource suppliers, we observe that while US policy boosts domestic feedstock demand, the RINs halving mechanism effective in 2028 establishes a substantial trade barrier, causing regional supply-demand fragmentation in the global oils and fats market.
IMPLICATION
U3 is dedicated to the development and investment of global circular carbon infrastructure, seeking to leverage the North American policy window to integrate local and compliant overseas supply chain resources to address market access changes post-2028.
