New study says exports to drive U.S. ethanol demand

A new analysis from CoBank finds growing domestic consumption will have only modest effects on overall U.S. ethanol demand and says exports will drive industry growth.

U.S. ethanol has been a rare bright spot in agriculture trade in recent years. In 2024, exports reached a new peak of 1.9 billion gallons, up around 510 million gallons from 2023. The CoBank report argues this export growth “had a greater impact than the incremental increases in domestic use of higher-level ethanol blends.”

More than a half dozen U.S. trading partners have blend rate targets above their current levels – including the European Union, Canada and Colombia. Further, the U.S.’ largest competitor in international markets, Brazil, is increasingly diverting ethanol for use in the domestic market.

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Accordingly, the report anticipates annual U.S. exports could grow further in 2025 and 2026 to more than 2 billion gallons. However, the report says much could depend on continued renewable fuel incentives in foreign markets, electric vehicle adoption and tariff retaliation.

“Political sentiment abroad may dampen some ethanol inclusion rates if nations roll back low-carbon policies or miss biofuel targets,” the report says, but with global demand set to continue its upward trajectory, the U.S. industry “is positioned for continued growth.”

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