By Emmy Powell
Communications Specialist

Farmers and ranchers continue to face growing financial strain as rising input costs, volatile markets and global competition tighten margins.

Biofuels, however, could play a central role in strengthening the farm economy and rural communities, according to a recent analysis by the American Farm Bureau Federation (AFBF).

“Biofuels drive steady demand for corn and soybeans. They create jobs at ethanol and biodiesel plants,” Faith Parum, AFBF economist, said. “They also attract a lot of local investment and keep energy dollars circulating in rural communities.”

For over 20 years, ethanol has offered a dependable market for U.S. corn, reduced reliance on foreign oil and saved consumers money at the pump, Parum noted.

This year, the U.S. is projected to produce more than 61 billion liters of fuel ethanol along with nearly 19 billion liters of biodiesel and renewable diesel. But as overall gasoline consumption is projected to decline in the coming decade due to increased vehicle efficiency and electric vehicle adoption, expanding the use of higher ethanol blends is critical.

Ethanol currently uses about 5.6 billion bushels of corn each year, making up roughly one-third of total U.S. production. While the national average blend rate hovers just above E10, many states have already moved forward with offering E15, a blend containing 15% ethanol.

Despite these advances, national use of E15 is hampered by federal summertime restrictions.

Under the Clean Air Act, E15 faces seasonal sales limitations that do not apply to E10, even though the higher blend performs just as cleanly and can reduce tailpipe emissions by up to 46% compared to conventional gasoline, according to AFBF.

The Environmental Protection Agency (EPA) issued temporary summer waivers in recent years, but those decisions must be repeated annually. This uncertainty discourages fuel retailers from investing in pumps, storage and marketing for E15.

A way to increase biofuel demand would be to allow for year-round E15 in American gas pumps, Parum said.

The Nationwide Consumer and Fuel Retailer Choice Act of 2025 would authorize year-round E15 sales in all states, eliminating regulatory unpredictability and allowing retailers to expand availability.

“So right now, we rely on the EPA to give short-term waivers to let us sell it in the summers,” Parum said. “What we really need is a Congressional fix to get year-round E15 that’s not relying on those emergency waivers. This will allow industries and producers to have some stability and know that they’ll be able to blend E15 ethanol year-round.”

According to the National Corn Growers Association (NCGA), if blend rates remain near a 10.5% average, domestic ethanol use could fall from about 14.2 billion gallons in 2025 to 13.1 billion gallons by 2035, roughly 400 million fewer bushels of corn used for ethanol.

NCGA also reports that a 1% increase in the average ethanol blend rate would add 1.36 billion gallons of ethanol, equal to about 486 million bushels of corn. A 5% increase, to move from E10 to E15, would translate to 6.8 billion gallons of ethanol, or roughly 2.4 billion bushels of corn a year.

Demand for homegrown corn would boom at the same time as a big crop settles into bins across the country, according to Parum.

“Year-round E15 would add billions of bushels of new corn demand. It would improve farm income and really help provide long-term market stability for corn growers,” Parum said.

Read more in the AFBF Market Intel report.