Emergence of Ethanol as a Key Enabler of the Transition to Low-Carbon Fuels

The U.S. clean energy transition requires a transition to both carbon-free electricity and clean fuels. Ethanol has been the leader in the move to low-carbon fuels, as long-standing attempts to develop other advanced low-carbon liquid fuels (cellulosic biofuels, algae derived fuels, e-fuels, etc.) have not succeeded in achieving scalable production at an acceptable cost.

Since 2005, the overall carbon intensity (CI) a of ethanol has decreased by 23%. Ethanol’s CI today is 53.6 grams of carbon dioxide equivalent per megajoule of ethanol produced (gCO2e/MJ), 42% lower than unblended gasoline. This has enabled blends of ethanol and gasoline to reduce on-road vehicle greenhouse gas (GHG) emissions by over 544 million tons of CO2.

This reality leads the EFI Foundation (EFIF) to present in this report a strategic roadmap to further decarbonize the U.S. ethanol industry through a portfolio of actions that can help it reach a goal of net-zero carbon intensity by midcentury, and several additional options that can achieve net-negative carbon intensity. The strategic roadmap will enable ethanol to play a central role in decarbonizing the transportation sector, which accounted for 29% of total U.S. GHG emissions in 2021.

Continued decarbonization of ethanol, combined with higher blend levels, can complement the shift to electrification of light-duty vehicles—both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs)—in achieving further reductions in 2030 and beyond. Conversion of ethanol into aviation fuel will allow blends of sustainable aviation fuel (SAF) at a significant scale. Further decarbonization of the U.S. ethanol industry also will strengthen its contribution to the U.S. economy, particularly to the rural economy.

In 2023, the United States produced 15.6 billion gallons of ethanol, making it the world’s leading producer and exporter of ethanol, responsible for producing over half of the global supply. The ethanol industry accounted for 28% of farm GDP, contributing $57 billion to total U.S. GDP in 2022. The ethanol industry supports more than 420,000 jobs.

Corn production for ethanol is a high value-added proposition—ethanol producers use about 30% to 40% of the U.S. corn crop, spending $38 billion, but require only about 1.5% of total U.S. farmland (an estimated 13.9 million acres). Since 2001, the U.S. food crops industry overall has maintained relatively consistent land use for planting while yields have continued to increase, indicating that corn is not in direct competition for acreage with other food crops. This report does not assume any increase in corn planting for ethanol production.

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