The mandates “ask the domestic biomass-based diesel industry to operate at the upper edge of its demonstrated capability while simultaneously relying on a recovery in imports that current and proposed policy work against,” researchers from Oklahoma State University and the University of Illinois wrote in a report last month. They estimate that the US may need 600 million gallons of biomass-based diesel imports this year and 1.3 billion gallons next year, up from fewer than 200 million in 2025.

Government data shows US biofuel blending picking up over the first five months this year, but still below pace to meet this year’s targets — let alone higher quotas next year. One obstacle to speedier growth is that US biodiesel production plunged last year to the lowest levels in over a decade because of policy uncertainty, and plants that idled for months might now lack the upfront cash to quickly hire workers or restart equipment. 

“We’re going to have a lot of soybean oil,” said Jacqui Fatka, an analyst at CoBank. “The problem is, do we have enough facilities to run that oil for renewable diesel? Some biodiesel plants are mothballed and completely shuttered. Do they try to come back on?”

High fuel prices and competing mandates in other countries are also drawing in biofuels like renewable diesel and sustainable aviation fuel that could otherwise be used toward US requirements. Given that competition, the US market has “no choice but to call upon foreign biodiesel,” according to Bloomberg Intelligence analyst Brett Gibbs.

Blending much more of the most-common biofuel in the US — corn ethanol — is also not an easy solution, even as producers argue that expanding so-called E15 gasoline would soak up excess corn and ethanol supply. Few retailers have the infrastructure for such higher-ethanol blends, and US lawmakers continue to spar over legislation that would permanently ease restrictions on summertime sales.

In the interim, the biofuel squeeze is hitting oil companies, an industry typically supportive of Trump’s energy policies. Refiners comply by blending biofuels themselves or buying credits from those that do, and those credits have more than doubled in price this year, reaching record highs in recent days.

Higher prices provide a stronger incentive to make and blend biofuels, but they also create costs for refiners that spill into pump prices. The American Fuel & Petrochemical Manufacturers has sued the administration and warned that refiners could respond to a credit shortage by supplying less fuel in the US. That creates political risk for Trump, who has pledged that gasoline prices will ease and accused oil companies of “gouging” US drivers. 

Farm advocates counter that alternative fuels insulate the US from volatile swings in global oil markets and that refiners have had years to invest in their own biofuel plants. Rethinking the mandates would also threaten crop growers, another important constituency for Trump, that see rising biofuel production as a rare bright spot in a farm economy that is otherwise ailing. 

The latest quotas are “achieving exactly what Congress and the Trump administration intended,” supporting record US biomass-based diesel production and expanding markets for US farmers, according to Kurt Kovarik, vice president of federal affairs at biodiesel group Clean Fuels Alliance America.

The Environmental Protection Agency said in a statement that there is “month-to-month variability” in biofuel blending and that the agency set mandates that are “achievable and appropriate” based on legal requirements.