The U.S. ethanol industry achieved record-breaking exports in 2024, shipping over 1.9 billion gallons to international customers. However, a new report from CoBank's Knowledge Exchange suggests that the sector's continued growth may face challenges in the coming year.
Key findings from the report include:
- Export markets offer the most promising opportunity for U.S. ethanol demand growth in 2025.
- Policy changes in major importing countries could impact future demand.
- Domestic demand is expected to remain relatively flat.
Jacqui Fatka, farm supply and biofuels economist with CoBank, emphasized the importance of exports: "Currently, the best opportunity to increase demand in 2025 remains in the export market."
The report highlights several factors influencing the ethanol export landscape:
- Canada remains the top destination for U.S. ethanol, with provincial mandates driving demand.
- European Union imports saw substantial growth in 2024, up 280% from September to November compared to the same period in 2023.
- India increased its non-fuel ethanol imports by 84% year-over-year from September to November 2024.
Despite these positive trends, the industry faces potential headwinds:
- Policy uncertainty in key markets like Canada, Europe, and Colombia could affect future demand.
- Domestic gasoline demand is projected to be flat in 2025, limiting growth in the U.S. market.
- Increased adoption of electric vehicles may impact long-term gasoline demand, though the effect has been less severe than initially feared.
The report concludes that while the U.S. ethanol industry is well-positioned to capitalize on growing global demand, continued success will depend on maintaining favorable policies in key export markets and adapting to evolving energy landscapes both at home and abroad.
Read the report, Ethanol Poised for Success if Exports Sustain.
