Insight Focus
US ethanol gains support from policy and export growth. The US Senate is moving closer to approving year-round E15 sales, supporting demand for corn and biofuels. Record ethanol exports prompted a bullish USDA outlook, while the EIA raised its 2027 production forecast. Iowa E15 sales reached their second-highest level on record and are on track to overtake E10 in 2026.
US Farm Bill Moves Closer to Authorising Year-Round E15
The US Senate Agriculture Committee on September 16 voted to advance the Agriculture Act of 2026, which includes provisions allowing year-round sales of E15 and support for the sustainable aviation fuel (SAF) industry.
The action was applauded by all major farm and biofuel organisations. Renewable Fuels Association (RFA) President and CEO Geoff Cooper said, “There is broad bipartisan support for making lower-cost E15 available to consumers all year long, especially at a time when pump prices are on the rise and fuel supplies are tightening.”
The RFA urged the full Senate to pass year-round E15 legislation as quickly as possible, reconcile the language with the House version of the bill, and get a viable solution to President Trump’s desk for his signature.
Advocates of the Senate’s farm bill say it will provide farmers with a reliable market for corn and help lower fuel costs for consumers. Regular unleaded gasoline prices in the US averaged USD 4.475 on September 22, compared with USD 3.1843 a year ago and a high of USD 5.0165 on June 11, 2022, according to AAA data.
Source: AAA
The current extension of the 2018 Farm Bill is set to expire on September 30, 2026, roughly a month before the US midterm election. Previously, the Environmental Protection Agency allowed E15 sales during the summer through emergency waivers.
USDA Outlook Signals Continued Growth in Ethanol Exports
On the same day that the Senate advanced the farm bill out of committee, the USDA released the American Biofuels Trade Outlook, which was bullish on ethanol. The Outlook contains a plan that builds upon 2025’s record US ethanol export performance, removes restrictions on US biofuels, and secures new market opportunities for US farmers.
US Secretary of Agriculture Brooke Rollins said that 2025 marked the strongest year for ethanol exports in US history. “The record-setting 2.2 billion gallons of US ethanol shipped around the world this past year, representing USD 4.7 billion, was not by accident,” the Secretary said.
Source: US Census Bureau Trade Data
“It represented the hard work of America’s farmers and demonstrates how American innovation and rural investment can deliver prosperity for consumers and producers at home and around the globe. American farmers are fuelling the future, and the American Biofuel Trade Outlook outlines the USDA’s plan to ensure that success continues, and America’s producers continue to prosper.”
Rising Export Demand Underpins Higher US Ethanol Output
On September 9, the US Energy Information Administration (EIA) increased its forecast for 2027 fuel ethanol production in its latest Short-Term Energy Outlook. The outlook for 2027 fuel ethanol exports was also revised higher. The EIA maintained its forecast that fuel ethanol production will average 1.1 million barrels per day in 2026.
Production is currently expected to expand to 1.12 million barrels per day in 2027, up from the August outlook of 1.11 million barrels per day. Fuel ethanol production averaged 1.08 million barrels per day last year.
On a quarterly basis, fuel ethanol production is expected to average 1.09 million barrels per day during the third quarter of this year, increasing to 1.12 million barrels per day in the fourth quarter. Moving into 2027, fuel ethanol production is expected to average 1.11 million barrels per day during the first quarter, 1.1 million barrels per day during the second quarter, 1.12 million barrels per day during the third quarter, and 1.15 million barrels per day during the fourth quarter.
Source: EIA
According to a new report from the USDA’s Foreign Agricultural Service (FAS), record ethanol exports in 2024 and 2025 were fuelled by growing global ethanol import demand and reduced competition from Brazil. Major ethanol-importing markets, including Canada, the EU, the UK, India, Colombia and the Philippines, increased their ethanol consumption, driving global import demand higher.
Source: US Census Bureau Trade Data
At the same time, strong domestic fuel ethanol demand in Brazil reduced exportable supplies and raised domestic prices, allowing the US to increase its share of a growing export market.
Iowa E15 Sales Approach Record Levels
Iowa fuel terminals distributed more than 46 million gallons of E15 during August, the second-highest amount on record, according to monthly fuel tax data released by the Iowa Department of Revenue.
Based on Iowa Renewable Fuels Association projections, E15 is on track to eclipse E10 as the No. 1-selling fuel in Iowa in 2026.
