Insight Focus
US ethanol exports and domestic demand continue to strengthen. Exports reached a six-month high in June, driven by demand from Canada and the EU. Record ethanol blending rates and higher corn consumption point to firm domestic demand, while India is considering curbs on sugarcane-based ethanol production to boost sugar supplies.
US Ethanol Exports Reach Six-Month High
The Renewable Fuels Association (RFA) recently reported that US ethanol exports accelerated 9% to 206.1 million gallons in June, driven by substantial gains across several key markets. Canada remained the leading destination for denatured fuel ethanol, with total exports edging up 2% to 78 million gallons.
Source: RFA
Exports to the EU, led by the Netherlands, surged 56% to 61.1 million gallons, reinforcing continued strong demand for undenatured ethanol. Together, Canada and the EU accounted for more than two-thirds of total US ethanol exports during the month.
Colombia, the UK and Mexico rounded out the top five export destinations. Exports of distillers dried grains with solubles (DDGS) hit an eight-month high of 1.1 million tonnes, climbing 2% on the month, mainly due to stronger shipments to Mexico, Indonesia and Vietnam. For the first half of 2026, US ethanol exports reached 1.21 billion gallons, 12% higher than the record quantity in 2025.
June exports of dried distillers’ grains (DDGS), the animal feed co-product generated by dry-mill ethanol plants, climbed 2% to an eight-month high of 1.1 million tonnes, supported by stronger shipments to several leading markets. For the year, DDGS exports through June totalled 6.16 million tonnes, 15% ahead of a year earlier.
Global demand for US ethanol is linked to competitive prices and blending mandates, while DDGS exports are driven by livestock feed demand.
According to recent data from the US Energy Information Administration (EIA), US biofuel producers consumed 30.749 billion pounds of feedstock in May, up 10% from April and 8% from May 2025. Biofuel producers consumed 26.612 billion pounds of corn in May, up 10% from the previous month and 7% from May last year.
Source: EIA
Blend Rate Sets New Record
The RFA reported that the US ethanol blend rate reached a record 11.29% in May, as expensive petroleum and favourable blending economics increased ethanol use. RFA Chief Economist Scott Richman said the 12-month average also set a record at 10.57%.
Source: RFA
E15 continued to provide even greater savings for motorists, with pump prices typically running 20 to 40 cents per gallon below regular unleaded gasoline. “It is clear from the increase in the national average blend rate that blenders, retailers and consumers have responded to these compelling economics,” the RFA said. “Permanently allowing year-round sales of E15 would expand consumer access and could further increase ethanol demand while helping reduce fuel costs.”
Debate Continues Over Year-Round E15 Sales
Supporters of year-round E15 availability say it would strengthen the farm economy and make the country more energy independent. Without legislation authorising year-round E15, summertime sales require a federal waiver.
Opponents point to research suggesting that emissions from higher blends could worsen summer smog while encouraging the conversion of grasslands for corn farming. Some lawmakers from oil-producing and refining states also oppose the expansion.
Iowa Invests in Renewable Fuel Infrastructure
Iowa Secretary of Agriculture Mike Naig recently announced that the Renewable Fuels Infrastructure Program (RFIP) Board had approved more than USD 2 million in cost-share grants for 38 E15 and biodiesel infrastructure projects across Iowa. The grants, approved during the Board’s July 29 meeting, include 24 ethanol projects totalling more than USD 1.43 million and 14 biodiesel projects totalling more than USD 604,000, for a combined investment of more than USD 2.03 million.
The grants will help Iowa fuel retailers install and upgrade infrastructure that expands consumer access to lower-cost, cleaner-burning renewable fuels while strengthening markets for Iowa’s corn and soybean farmers. The Renewable Fuels Infrastructure Program was established in 2006 to assist fuel retailers with the cost of installing and upgrading infrastructure needed to store and dispense higher blends of renewable fuels.
Ethanol Plant, Western Iowa
India May Prioritise Sugar Over Ethanol Production
India is considering restricting the amount of sugarcane used for ethanol in the season beginning in October to boost sugar output and help calm record prices, according to two government and two industry sources cited by Reuters. Reduced rainfall in Maharashtra and Karnataka, India’s largest sugarcane-producing states, has raised concerns about next year’s sugar output, the sources said.
Prioritising sugar supplies over ethanol production could help India avoid sugar imports by boosting domestic availability as production falls, and a decision on the issue could be made by the end of next month. Mills diverted about 3 million tonnes of sugar, or around 10% of total output, to ethanol production during the current marketing year ending in September.
