In July, Raphael Rettig made the case that tax credits won’t be enough to win America’s battery race; the U.S. would also need a plan for its supply chain. Renewable diesel now faces its own version of that test. Most fleet managers judge renewable diesel on two counts: whether the fuel arrives and what it costs. In 2026, both depend on something few fleets ask about, which is where the fuel’s feedstock came from.
Two federal policies, one setting volume demand for renewable diesel feedstocks, another setting the tax value of renewable diesel made with them, are creating some uncertainty about renewable diesel feedstock supply in the U.S. Fleets can and should ask their fuel suppliers some pointed questions about where they source renewable diesel.
For fleet managers, it’s easy to focus on renewable diesel gallon availability and leave refinery economics and complicated fuel incentives to others. But those economics, particularly as they pertain to renewable diesel feedstocks, can influence refinery operating decisions and the price and availability of fuel.
Two rules announced by the government in 2026 highlight this point.
In March 2026, EPA finalized its annual renewable fuel volume requirements under the Renewable Fuel Standard (RFS), setting biomass-based diesel volume requirements (expressed as renewable identification numbers or RINs): 9.07 billion RINs in 2026 and 9.20 billion in 2027.
And Notice 2026-53, issued in September 2026, confirmed that renewable diesel produced after Dec. 31, 2025, qualifies for the clean fuel production tax credit (CFPC or 45Z) only if its feedstock was produced or grown in the U.S., Canada or Mexico. That means imported used cooking oil (UCO) from other countries, a major renewable diesel feedstock, would no longer qualify for this credit. The credit will matter to renewable diesel producers selling renewable diesel produced in 2026: For fuel sold in 2026, the alternative applicable amount is $1.09/gallon for biofuel producers that meet prevailing wage and apprenticeship requirements. The final credit is lower and depends on the fuel’s emissions rate.
Two Policies Pull in Different Directions
The RFS and CFPC pull in two different directions. The RFS increases feedstock demand and is likely to strain available supply in the U.S. EPA has also said it intends, in future rulemaking, to lower the value of RINs associated with imported fuels and fuels made from imported feedstocks starting in 2028. The CFPC credit, meanwhile, applies a tax advantage to a narrower slice of feedstocks.
Taken together, the two policies could influence which feedstocks refineries use for renewable diesel production, how much it costs, and whether those changes show up in the renewable diesel your fleet receives.
The RFS requirement drives significant renewable diesel feedstock demand. How significant? According to University of Illinois’ farmdoc daily, total biomass-based diesel feedstock requirements are estimated to be 53.8 billion pounds in 2026, of which 21 billion pounds could potentially be imports. That is more than U.S. supply can comfortably meet today.
Farmdoc estimates about three-quarters of U.S. renewable diesel capacity is located on or near the Gulf and California coasts, in advantageous locations to receive imports.
For those refineries, the Notice could influence refinery feedstock decisions: Should we pay more for domestic feedstocks and pocket the tax credit? It may not make economic sense for refineries to source non-qualifying feedstock if it means forgoing the credit.
Which Plants Will Keep Supplying Fleets
Not all renewable diesel refineries have equal flexibility to use multiple feedstocks, a trait that could matter during feedstock price swings. Some can use a wider variety of renewable diesel feedstocks, such as soybean oil, canola, distillers corn oil (DCO), tallow, and UCO; others cannot.
UCO and other low-grade fats can contain impurities (metals, chlorides, phosphorus, solids) that need to be removed during feedstock pretreatment so they don’t quickly deactivate the catalyst in the renewable diesel production process, shortening the refinery’s run. Refineries will need pretreatment processing to accommodate feedstocks with high impurities or contaminants if they aren’t already set up.
So which refineries will continue to supply your fleet with renewable diesel? The answer depends on a refinery’s feedstock supply agreements and their economics.
If margin economics get squeezed, refineries could respond in multiple ways:
- reformulate to different feedstocks;
- renegotiate fuel prices or agreements with customers;
- send fuel to markets where it earns more credit value, such as California under LCFS; or
- reduce renewable diesel production (lower their “run rate”).
Five Questions to Ask Your Fuel Supplier
Fleets that buy renewable diesel should ask their suppliers a handful of questions:
- How much of the renewable diesel you deliver was made at refineries using U.S., Canadian, and Mexican feedstock? Ask suppliers for documentation.
- How much of your renewable diesel before this year was made at refineries that relied on imported feedstock?
- What happens to fuel price if LCFS, RIN, or 45Z credit economics change? Ensure contract language addresses this. A contract that only works at today’s credit prices may not hold if those prices fall.
- If a supplier refinery lowers run rate or shuts down temporarily, where else can we get fuel?
- Which carbon intensity (CI) pathway is the renewable diesel associated with? Ask for documentation.
As always, suppliers that can answer those questions quickly, accurately, and in writing help you plan not just for next year’s fuel supply contracts but contingencies, too.
Supply Will Follow the Records
The Notice also requires producers using UCO for renewable diesel to keep records to support 45Z claims, as the Treasury has specifically raised concerns about distinguishing imported used cooking oil from palm oil. Fleets can and should ask their renewable diesel suppliers for similar documentation as they work on their 2027 renewable diesel supply plans.
Renewable diesel still offers the quickest path to significant emissions reductions in existing diesel fleets, with no compromises to fuel quality and tank specs. What the rules change is which plants can afford to keep making it.
Feedstock origin, pretreatment capability and procurement flexibility should now weigh as much as nameplate capacity in judging who can supply consistently. Fleets that understand those exposures and probe RD suppliers on these issues in advance of negotiating 2027 contracts will be well-positioned should feedstock availability become more challenging.
Gaurav Shah is Managing Partner of Trident Renewables, an operator-led buy-side advisory firm focused on renewable fuels and energy-transition investments. He has designed, commissioned or operated 20+ biofuel facilities and is a named inventor on six U.S. biofuel patents.