Written on: September 1, 2026 by Joe Uglietto
If you’re a fuel dealer in the Northeast, you might learn a thing or two from this article. If you’re a fuel dealer in Massachusetts, this article is a must read.
Before 2025, the conditions were extremely favorable for utilizing and blending biodiesel. When the Federal Blenders Tax Credit (BTC) expired at the end of 2024 at the same time that prices of the D4 Renewable Identification Numbers (RINs) were pushed lower due to the low renewable volume obligations (RVOs), the financial incentive to purchase and provide biodiesel (and other renewable fuels for that matter) evaporated. The following 15 months—from January 2025 to April 2026—were bleak times for biodiesel supply. However, times have changed and dealers have an enormous opportunity.
The Tide has Turned
On April 1, 2026, the U.S. Environmental Protection Agency (EPA) published the Renewable Fuel Standard RVOs for 2026 and 2027. The RVOs were set at historic levels, which in turn pushed the value of RINs to historic levels. D4 RINs have traded as high as $2.60, providing an incentive that was as high as $3.90 per gallon in the biodiesel supply chain. Additionally, the market certainty of high RVOs through the end of 2027 has helped to drive biodiesel pricing downward.
The U.S. Dept. of the Treasury released guidance on the 45Z Clean Fuel Production Credit for biodiesel, which will be finalized in November 2026 and be provided retroactively from Jan. 1, and remain in place until Dec. 31, 2029. Market conditions led to a quick collapse of the biodiesel market in 2025. These new conditions—strong RVO pricing and 45Z guidance—have led to a significant drop in biodiesel prices and quickly re-established the market, and the opportunity for dealers to take full advantage. With biodiesel prices below New York Mercantile Exchange (NYMEX) once again, it’s game on.
A Sweetener for Dealers in MA
If you’re a Bay State dealer, here’s the cherry on top: Alternative Energy Certificates (AEC) prices in the Massachusetts Alternative Energy Portfolio Standards (APS) program have increased significantly. This is providing a much stronger incentive for Massachusetts retailers to deliver waste-based biodiesel blended with heating oil to homeowners.
The bottom line is that the Federal incentives combined with the MA APS incentive will make the next few years the best and most profitable time for Massachusetts dealers to participate in the APS program since the program’s inception. The time to begin blending again is yesterday. The next best time is today. I urge all Massachusetts retailers to speak with wholesalers and producers of biodiesel across the region and secure your supply for the remainder of 2026 and the beginning of 2027.
Blending is now a no-brainer. Not only will your return-on-investment be significant, but blending can provide you with additional flexibility to maintain your margins and the strength of your company in the face of uncertain energy prices and margin pressures from other corners. It hasn’t gotten cheaper to operate your business, but realizing profits from the blending of biodiesel can take some of the pressure off.
What this Means for all Fuel Dealers
While recent market conditions are most helpful to Massachusetts companies, there may be opportunities for individual dealers to secure price-favorable biodiesel below NYMEX prices. This can strengthen your position in the market while offering a renewable fuel to customers, potentially a win-win situation. At the very least, this is an excellent reminder for all fuel companies of just how important the macroeconomic factors are when it comes to creating a sustainable and profitable market.
With so many States considering clean heat standards, Cap-and-Invest programs and other market-based decarbonization policies, it’s important to remember that the ones that will succeed are the ones that create strong economic incentives for businesses that will be relied on to deliver the energy. ICM
Renewable Energy Insights is a regular column by Joe Uglietto, President of Diversified Energy Specialists, with a focus on emissions reductions & renewable energy innovation. DiversifiedEnergySpecialists.com
