Even in a troubled agricultural economy, there can be a gem or two. In this economic cycle, it’s ethanol.
“2025 was a terrific year for American ethanol — the best that we've had,” Emily Skor, CEO of Growth Energy, a biofuel trade association, said at last week’s North American Agricultural Journalists annual meeting in Washington, D.C.
Long term, this could spill over into more demand and more money for farmers.
So, what’s hot?
Record domestic demand is coupled with record global ethanol demand. “We have had four months of over 200 million gallons of ethanol [per month] exported,” Skor said. “Prior to November last year, we never exported more than 200 million gallons in a month. So, we're on a really, really good trajectory.”
This coincides with 11 bilateral trade agreements or frameworks where ethanol has played a significant role.
“The focus for us now is making sure as those details are filled out, that the commitments on ethanol are followed,” Skor said.
E15 continues to grow. This is a fuel blend containing 15% ethanol and 85% gasoline.
“Last year was a great year with E15,” Skor noted. “We saw a greater increase in E15 sites than we had in all of the previous years.”
Use of year-round E15 could increase corn demand and translate into higher corn prices. Challenges remain, however. Year-round access to E15 isn’t yet occurring around the country. Intensity among ag groups for year-round E15 is growing, particularly as fuel prices spiked at the start of the Iran war.
One hurdle is what legislative vehicle in which to insert E15 legislation.
“It’s hard to point to a [legislative] vehicle right now,” Skor explained. “It could be farm assistance, it could be natural disaster funding. There’s talk about [including it in] the farm bill.”
She said Growth Energy’s focus is to make sure that agricultural legislation moved forward by Congress contains a component for year-round E15 use.
“The president twice this year, on the record, has said, ‘Congress, send me a bill on E15,’” Skor said. “We are very anxious to see that.”
Section 45Z tax credit continues to progress. Section 45Z is a provision that was first tucked inside the Inflation Reduction Act of 2022 and preserved in July’s One Big Beautiful Bill Act, granting federal tax credits to biofuel manufacturers that make low-carbon fuels. This may create shareable value between biofuel producers, farmers, grain merchandisers, third-party verifiers and others up to $100 per acre.
Section 45Z is complicated legislation, however. It involves USDA, the Treasury Department’s Internal Revenue Service and the Department of Energy. Skor said Treasury Department guidance for Section 45Z came out in February.
She added that it’s difficult to put a timetable on when Section 45Z tax credits will be finalized. Additional steps include USDA to finalize rulemaking. The Department of Energy also has to update the GREET model to incorporate that rulemaking. The GREET model is the Department of Energy’s Greenhouse Gases, Regulated Emissions and Energy Use in Transportation model that includes emissions in raising a crop — such as from fertilizer, fuel and chemical — and ways to offset them — such as reduced tillage, more target fertilizer application and cover crops.
As it stands now, there is nothing to guarantee that farmers will receive a share of these tax credits garnered by biofuel producers.
But Bryan Sievers, director of government relations for Roeslein who also farms near Stockton, Iowa, believes the amount of money farmers may glean from Section 45Z payments through a carbon intensification scoring system will be significant. The lower the CI score, the better for potential farmer payments.
Sievers has worked with a facilitator in assessing his farm’s CI score, which has been reduced to minus 15 due to practices that include no-till, cover crops and anaerobic digester technology. He added that the practices are measurable, and it’s important that such practices that are part of a CI scoring system are moved into the Section 45Z system.
It’s also important that Section 45Z uses a book-and-claim tracking system, which separates bushels and low-carbon credit certification, Sievers said.
This would enable farmers to separate and sell their environmental attributes from their own CI scores from their grain and oil-seed bushels. This is opposed to a mass balance system, which links bushels and low-carbon credits for delivery to a biofuel producer.
“It just makes a lot more sense to be able to utilize a book-and-claim model in 45Z implementation,” Sievers added.