U.S. biofuel producers are operating at full throttle, and the latest government data shows just how far the industry has come. EPA’s June Renewable Identification Number (RIN) data, released earlier this month, confirmed record soybean crush demand as the U.S. biofuel complex runs at high capacity.
Combined D4/D5 RIN generation totaled 862 million RVO gallons in June — a 33% jump year over year. Buried in that data was another headline number: a record 499 million gallons of renewable (green) diesel and sustainable aviation fuel (SAF) were produced during the month.
According to Susan Stroud, founder and CEO of NoBull Agriculture, the historic run in soybean crush isn’t a market accident. She says it’s the direct result of a change in federal policy.
Policy Is the Driver
Stroud points to EPA’s Renewable Volume Obligation (RVO) for 2026 and 2027, finalized at the end of March, as the catalyst behind the surge in production.
“EPA gave us the record large RVO for 2026 and 27 finally at the end of March, and we are finally starting to see the result of some of that,” Stroud says. “The RVO is large enough that it requires producers in the U.S. biodiesel and renewable diesel [industries] to effectively run at maximum capacity.”
And Stroud doesn’t expect the momentum to slow down anytime soon. As more plants come online, that should open the door for even high soybean crush.
“We should continue to see records shattered,” she says.
Market Support Building From Multiple Directions
For soybean producers, the growth in biofuel demand is already translating into price support, and it’s happening alongside other bullish factors converging on the market at the same time.
“It already is [impacting prices]. It’s providing a lot of underlying support for the soybean market,” Stroud says. “Now we’re seeing it in combination with China finally coming back and beginning to buy some of that 25 million metric tons that they are supposed to for this coming marketing year. So it’s all of these things kind of colliding at once.”
Stroud also pointed to unexpected support coming from the energy markets. Russia’s recent export restrictions have sent shockwaves through diesel and heating oil markets, further boosting biofuel economics.
“We’re seeing a lot support, especially coming because of the diesel market, heating oil had rallied so much over the course of the past month and a half since Russia put export restrictions in place,” Stroud says. “That’s providing a lot of additional support for soybean oil, and it’s pushed renewable fuel margins even to higher levels than they were previously.”
45Z Credit Reshaping the Landscape... For Corn, Too
Stroud says the 45Z Clean Fuel Production Credit has been a major driver of the biofuel boom well before recent geopolitical developments entered the picture.
“Even as the calendar turned to 2026, before we saw the issues in the Middle East, 45Z has been a tremendous windfall for soybean oil into biofuels,” Stroud says. “And it’s a big deal for corn, too, because ethanol is now receiving a 45Z credit, and so that’s additional support.”
While soybean crush has dominated headlines, Stroud says the ethanol industry is undergoing its own transformation, and one that’s largely gone unnoticed.
“Ethanol is one thing that we haven’t talked a lot about. There’s some expansion going on that’s under the radar, but it’s because they have strong margins and they have the incentive to produce,” Stroud says. “Soy crush has been taking all of the focus, but this has really been underlying, quite supportive for ethanol, too.”
Stroud declined to put a number on the scale of that expansion but confirmed it’s happening quietly across the industry.
“I can’t give you any specific numbers, but yeah, there’s quiet expansion happening,” she says.
Why the Silence?
Given the scope of what’s happening in ethanol markets, why hasn’t it captured more attention? Stroud suggests it may simply come down to public relations and communication.
“I’m not sure if the ethanol industry is out with a lot of public info,” Stroud says. “There are a few expansion projects that have been announced, or that I think the public is aware of, but otherwise I think there are several things kind of happening flying under the radar.”
More Crush Capacity Needed to Keep Pace, Says AgResource’s Dan Basse
Even with records falling, the industry may still be playing catch-up on infrastructure, according to Dan Basse, founder and president of AgResource Company.
“I believe this is just a start,” Basse says. “The problem being is if I get about 2.8 billion bushels of soybeans annually, I need more investment in crush facilities.”
Basse says today’s strong margins should help spur that investment, but the payoff won’t be immediate, as new crush capacity takes years to come online.
“I think these margins will help that. But I’m saying it takes three years to get a new processing plant up and operational from permitting to production. So anything we get today for margins is really planning for the future,” Basse adds.
Basse also pointed to another potential demand driver on the horizon: broader access to E15, the higher-ethanol-blend fuel, for corn.
“I’m still hopeful maybe we’ll get E15 on a voluntary basis for corn,” Basse says. “So all of this is really hitting at the right time.”
Tariffs on Brazilian Tallow Add Another Bullish Layer
Trade policy is now reinforcing the same bullish story. Soybean oil futures jumped earlier this month on a combination of trade and biofuel news, as Washington confirmed steeper tariffs on Brazilian goods just as new EIA production data showed how tight the U.S. biomass-based diesel feedstock market has become. At the center of the move is beef tallow, which is a key renewable diesel feedstock that was left off the list of tariff exclusions.
The U.S. Trade Representative finalized a 25% Section 301 tariff on a wide range of Brazilian imports effective July 22, citing unfair trade practices that include restrictions on U.S. ethanol access, digital-trade issues and illegal deforestation. The new rate replaces a temporary 10% duty under Section 122 that was set to expire late this month. While beef and orange juice were carved out of the tariff, tallow was not.
The U.S. has been importing roughly 30,000 to 35,000 metric tons of Brazilian tallow per month, which equotes to about 360,000 to 420,000 metric tons annually. Most of it is destined for renewable diesel production. Under the new tariff regime, that volume is expected to redirect to European biofuel producers, who face no equivalent duty, leaving Oceania as the only remaining meaningful import source for U.S. buyers, a supply base already tight and unable to expand quickly.
The main risk to the bullish case is on the demand side, though. If higher feedstock costs squeeze renewable diesel margins, producers could respond with run cuts that blunt some of the added vegetable-oil demand. But for now, the two demand factors seem to be adding a bullish sentiment into the soybean market, and one that could continue to play out in the market in the months ahead.
