Call it clean energy or renewable fuel, the impact is the same for U.S. farmers: increased domestic demand — a veritable explosion, particularly for corn and soybeans.
Tapping into it means expanding existing production and rewriting U.S. policy. A look around the globe reveals the highest-use cases for something other than fossil fuel is driven by policy. Policies that support such an energy transition would lead to measurable increases in the use of alternative fuels in the U.S.
The potential for added corn demand is starkly outlined in the push-and-pull with Congress over year-round E15 — a blend of 15% ethanol and 85% gasoline that first came to U.S. gas stations in 2011. EPA approved its initial use in vehicle manufacturing in 2001.
What does that mean for farmers? Full, nationwide, year-round implementation of E15 would increase annual corn usage by about 2.4 billion bushels. That’s a number slightly higher than the corn ending stocks estimate that USDA offered in January of nearly 2.23 billion bushels. Tightening ending stocks is the secret sauce for higher prices.
That’s the easy button for the corn market, said Naomi Blohm, senior market adviser at Total Farm Solutions. She noted each and every percent ticks up demand.
“A modest 1% increase in the current blend rate would increase corn demand for ethanol by 486 million bushels. That alone would help prop up corn futures prices,” Blohm said.
Among the alternative fuels, the numbers rise quickly. The top two are on- and off-road vehicle use and aviation, at 56.4 billion and 26.5 billion gallons, respectively. Throwing in heating oil, rail and marine brings the total use to over 90 billion gallons of fuel.
For aviation, the competition for a fossil fuel alternative is squarely on liquid, which gives crop-based fuel the edge.
“Aviation is highly resistant to electrification,” said Tom Michels, government affairs director for United Airlines. “You’ll never have an aircraft powered by batteries that gets you over the Atlantic.”
With a win-win for agriculture and the environment, what then fuels the debate?
Whether the question is ethanol, sustainable aviation fuel, biodiesel or renewable diesel, the key is being:
- environmentally credible
- operationally reliable
- commercially possible
All three can also be seen as good for the environment with a consistent, affordable supply.
Ethanol, SAF and both diesels are continually making strides on the first two. The third depends heavily on public policy that provides financial support to this industry. The support is mired in the continuing food-vs.-fuel debate; concern about land use, largely focused on deforestation in Brazil; and contentious U.S. politics. The last is the heaviest lift.
On public policy, Michels said, “Durability of incentives is important.” Policies covering multiple years are necessary to incentivize new investment.
Environmental attorney Tom Pohle of Beveridge & Diamond agreed at a recent Clean Fuels Conference: “A predictable public policy is really essential.”
For farmers looking to 2026 planting, that can’t come soon enough.