CARB ruling lifts biodiesel barrier
January 8, 2026 | Kriss Nelson
California’s decision to roll back an outdated biodiesel regulation is expected to open the door for higher biodiesel blends in the nation’s largest diesel market, a move welcomed by Iowa soybean and biodiesel leaders as a science-based step forward.
Last week, the California Air Resources Board (CARB) voted to sunset the oxides of nitrogen (NOx) mitigation requirement for biodiesel blends up to B20 under the Alternative Diesel Fuel (ADF) regulation. The Iowa Biodiesel Board (IBB) says the decision removes a long-standing barrier that had limited biodiesel blend levels in California.
Grant Kimberley, senior director of market development with the Iowa Soybean Association (ISA) and executive director of the IBB, says the ruling clears a path for expanded use of biodiesel blends.
“This will help clear the way for higher blends of biodiesel in the California market, which is the largest diesel market in the U.S.,” Kimberley says.
Kimberley says the decision, based on CARB’s own emissions data, removes an unnecessary regulatory hurdle that had artificially suppressed biodiesel demand.
“The state's decision to align its regulations with current science opens the door for increased biodiesel demand, particularly at least 20 percent biodiesel (B20), providing much-needed market access for Iowa's biodiesel industry and soybean farmers,” he says. “This comes at a critical time as we continue to face headwinds due to a challenging environment in both federal energy policy and trade.”
He added that the ruling reinforces biodiesel’s role in helping California meet its climate goals.
“This move by CARB demonstrates what happens when regulators base decisions on current data rather than outdated assumptions,” Kimberley says. “The evidence clearly supports biodiesel's role in helping the state achieve its climate objectives under the Low Carbon Fuel Standard, and this will open up more opportunities for B20 to become the gold standard in California, as it should be.”
Matt Herman, chief officer of demand and advocacy for ISA, says the now-sunset regulation had placed biodiesel at a disadvantage in California’s diesel market.
“The ADF created a financial and technical barrier that limited the adoption of higher blends of biodiesel in California, the nation's largest diesel market,” Herman says. “The requirements imposed by the ADF disadvantaged biodiesel use relative to renewable diesel, limiting the market’s demand for biodiesel.”
Herman said removing those barriers is especially important for Iowa.
“Removing barriers for biodiesel is especially important for Iowa as we are not only the second largest producer of soybeans, but the largest crusher and the largest producer of biodiesel,” he says, adding Iowa currently does not house a renewable diesel plant.
Under the ADF regulation, producers were previously required to blend a minimum of 55% renewable diesel with biodiesel blends from B6 to B20 to address NOx concerns in older heavy-duty vehicles. CARB’s own emissions modeling later showed the requirement was unnecessary and contributed to keeping overall biodiesel blends below 10 percent.
Clean Fuels Alliance America first called for sunsetting the B20 restrictions in 2022, after CARB data showed the regulatory triggers for lifting the requirements had already been met. Because biodiesel is typically more affordable than fossil diesel for fleet operators, lifting the ADF restriction is expected to support market growth and mark a significant milestone for the clean fuels industry.
Despite broader regulatory uncertainty, industry leaders say sunsetting the NOx mitigation requirement is a constructive step forward.
Kimberley reiterated that despite the positive development, the real key to market certainty remains the finalization of guidance on the 45Z federal tax incentive as well as volumes under the federal Renewable Fuel Standard. As noted in a recent statement on EPA's proposed RFS volumes, finalizing strong RFS standards by Jan. 31 is absolutely critical for Iowa's biodiesel industry and the farmers who depend on these markets, he said.
The Executive Order sunsetting the ADF regulation’s NOx mitigation requirement takes effect Jan. 1, 2026. A copy of the Executive Order can be found here.
Written by Kriss Nelson
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