EPA rule tightens Renewable Fuel Standard, benefiting DAR
Darling Ingredients Inc.’s share was trading at $60.34 as of June 2nd. The company is a vertically integrated global renderer of animal fats and used cooking oil, converting bio-based feedstocks into fuels, feed ingredients, and specialty collagen products.
The recent EPA Set 2 rule finalized on March 27, 2026, materially tightens the Renewable Fuel Standard by increasing blending obligations to ~27 billion RINs. This creates a structural deficit of 3 billion D4 RINs versus 2025 levels, forcing marginal high-cost biodiesel producers to bid up RIN prices.
The company’s Fuel Ingredients segment, anchored by the 50% owned Diamond Green Diesel joint venture with Valero, represents the key earnings driver, with capacity of ~1.2 billion gallons by 2026. The rule change is expected to lift profitability across the compliance system, benefiting low-cost producers like Darling Ingredients Inc.
The company’s trailing and forward P/E were 43.80 and 17.12 respectively, with a network of more than 80 facilities worldwide. The EPA rule change is expected to have a positive impact on the company’s earnings, with a potential increase in revenue from the sale of renewable diesel and sustainable aviation fuel.