Iowa ethanol backers promote fuel as salve for farmers

ALTOONA — The federal government must do more to boost the demand for ethanol fuels to counteract a recent downturn in farm incomes, according to leading advocates for the ethanol industry.

Most immediately, that should include making a gasoline blend that is 15 percent ethanol widely available.

"We want nationwide E15 year-round, and we want it this year," said Chris Boshart, president of the Iowa Renewable Fuels Association.

The association hosted an annual gathering Tuesday to discuss renewable fuels at the Meadows Events Center in Altoona.

Iowa lawmakers have adopted requirements for fuel stations to stock E15, with some exceptions.

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And Midwestern states paved the way for the fuel's continuous sale within their borders by asking federal regulators to eliminate an emissions exemption for E10, which is 10 percent ethanol.

That has required refiners to reduce the volatility of the gasoline they use for the ethanol blends in the Midwest and enabled year-round E15. The U.S. Environmental Protection Agency has said the move would increase fuel prices.

E10 has been the far-and-away dominant gasoline fuel in the United States, accounting for about 95 percent of total sales.

But the annual consumption of fuel ethanol in the United States has been roughly even for the past decade at about 14 billion gallons, according to the U.S. Department of Energy.

Domestic production of the fuel is typically about a billion gallons higher than that figure, and Iowa ethanol plants make about 30 percent of it.

More than half the corn produced in Iowa — and about 40 percent nationwide — is used to produce ethanol. An increase in ethanol production also would increase the demand for corn, the prices for which have lagged since summer 2023.

Last year, the price per bushel of corn was less than half what it was during a recent peak in 2022.

U.S. farm income also peaked in 2022 and has slid since, but it still has been higher than the long-term average, according to the U.S. Department of Agriculture.

Still, that decreased the demand for new equipment and contributed to widespread layoffs among ag manufacturers.

John Deere alone reported 15 layoffs to the state in the past year that affected more than 1,800 employees at seven of its Iowa sites.

Monte Shaw, executive director of the fuels association, said ethanol has the potential to lift farm income again as it did two decades ago, when corn supplies outpaced demand.

"What pulled us out of that? Ethanol," he said.

Domestic ethanol production more than tripled between 2005 to 2010.

Shaw said the most straightforward way to increase ethanol demand is to supplant E10 with E15 — a 50-percent increase in ethanol over E10.

But the rise of electric vehicles might diminish demand for the fuels. The Biden administration had sought to have half all new cars sold in 2030 be either electric or gas-electric hybrids.

Recent figures show that the vehicles represent about 10 percent of new sales.

President Donald Trump rebuked the 2030 goal in his first day in office, and a transition to electric vehicles is expected to slow in the next four years, said Jeff Meyer, a director of S&P Global Commodity Insights, who also spoke Tuesday at the Iowa Renewable Fuels Summit.

"Instead of it being really policy driven support at least for the next few years, think of it as being more organic, more consumer-led in terms of adoption," Meyer said of preference for electric vehicles.

Most ethanol producers in Iowa hope to connect to a proposed carbon dioxide pipeline system that would lower the carbon scores of their fuels. That would make them eligible for federal tax credits, and they could sell the ethanol into low-carbon markets.

Some of those who oppose the pipeline system proposed by Summit Carbon Solutions say it will unnecessarily elongate the viability of fuel ethanol and slow the adoption of electric vehicles.

Comments: (319) 368-8541; jared.strong@thegazette.com