The proposed Renewable Volume Obligations (RVOs) for 2026 and 2027 represent a major signal for the U.S. ethanol industry, and for the sorghum farmers who support it. RVOs, set by the Environmental Protection Agency (EPA), are the backbone of the Renewable Fuel Standard (RFS). They establish annual targets for how much renewable fuel must be blended into the U.S. gasoline and diesel supply. These numbers shape every part of the biofuel economy, from ethanol plant production decisions to farm-level planting and global investment strategies.

For the broader ethanol industry, high and stable RVOs provide momentum and predictability. They send a clear market signal that federal policy continues to support the growth of homegrown fuels. Increased targets give biofuel producers the confidence to invest in new technology, expand capacity, and diversify feedstocks. For farmers, higher RVOs ultimately mean increased crop demand, expanded marketing options, and stronger prices.

The EPA’s proposed blending targets include 15 billion gallons of conventional ethanol each year, plus 9.02 billion gallons of advanced biofuels in 2026 and 9.46 billion gallons in 2027. 

This increase in advanced biofuel requirements is especially significant for the sorghum industry. Corn starch-based ethanol is not allowed to qualify as an advanced biofuel under the RFS, but sorghum-based ethanol can – creating extra value for every gallon. Today, that added value means $0.05 per gallon or $0.15 per bushel.

Suggested caption: The EPA’s proposed RVOs for 2026-2027 signal strong federal support for both conventional and advanced biofuels, an encouraging development for sorghum-based ethanol.

Source: EPA

The premium is tied to the spread between D5 and D6 Renewable Identification Numbers (RINs), a unique 38-digit code assigned to each gallon of renewable fuel produced. D6 RINs are assigned to corn starch-based ethanol gallons. D5 RINs are assigned to advanced biofuel gallons, including sorghum ethanol. Because fewer gallons of advanced biofuel are produced, D5 RINs are less common and thus more valuable.

A multitude of factors drive RIN prices, and forecasting their future value is difficult. Long-term trends and compliance requirements suggest the price gap between D5 and D6 RINs will likely stay consistent. Since 2010, the average spread has been $0.18 per gallon. That makes $0.10–$0.20 per gallon a reasonable estimate for sorghum’s future advantage, or about $0.29–$0.58 per bushel.

While sorghum qualifies as an advanced biofuel feedstock, capturing that premium isn’t always straightforward. Under current rules, ethanol plants must also invest in additional greenhouse gas-reducing technologies to qualify, and doing so is no small undertaking.

Thanks to a favorable regulatory change made during the Clean Fuel Production Credit (also known as 45Z) rulemaking, sorghum should now qualify on its own. If confirmed by the EPA, plants could unlock the $0.10–$0.20 per gallon premium simply by grinding sorghum. No added technology would be required, and that could drive significantly more demand for sorghum from ethanol plants.

Still, work remains. The RVOs are just a proposal for now, and opposition is expected during the public comment period. While the proposal is a strong step in the right direction, the EPA must follow through in order to drive long-term structural demand.

Current signals make it clear that the Trump Administration is pushing for increased blending of renewable fuels in the future. The message from sorghum farmers is just as strong: with the right policy signals, sorghum farmers will not only participate in the future of fuels; they will define it.