Iowa’s ethanol plants produced 4.6 billion gallons of ethanol in 2025, matching output levels from the previous two years, according to Iowa Renewable Fuels Association. The state remains the nation’s largest ethanol producer, accounting for 28% of the total U.S. production of 16.4 billion gallons, marking the fifth consecutive annual increase nationwide.
Despite Iowa’s steady production, national ethanol output grew by 850 million gallons over the last three years, driven by expansions in states such as Indiana, Illinois, North Dakota and Nebraska.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, said investment is flowing to states with competitive advantages in carbon sequestration infrastructure. “While Iowa remains the largest ethanol-producing state, we are behind in the race to maximize the incentive and market benefits from producing ultra-low carbon ethanol,” Shaw said.
He noted that if Iowa’s ethanol production incorporated carbon capture and sequestration (CCS) technology, the state could gain over $3 billion in 45Z tax credits, boosting its competitive position in emerging domestic and export markets.
Shaw emphasized the importance of maintaining access to CCS and conservation-smart agriculture practices to tap into growing markets like marine and sustainable aviation fuels. “Our future depends on it,” he said, pledging continued support for legislation that enhances landowner rights and streamlines permitting for CCS projects.
