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Grain-based ethanol expands as more countries blend higher shares

The share of grain used for ethanol can raise corn prices, providing incentives for more production while fueling demand shifts in countries like India and Brazil.

Reported · Written up by our desk · Energy Transition

World Grain says the early 2000s surge in US corn-based ethanol sparked a food versus fuel debate, but the outlet argues global food insecurity is driven more by conflict, poverty, and delivery disruptions than by overall grain availability.

The piece notes grain accounts for 60% to 70% of the raw material used in ethanol production, while sugarcane and biomass make up the rest, according to the US Department of Energy. It adds that corn is the dominant grain input, representing about 90% of grains processed into ethanol.

World Grain attributes the recent resurgence in grain-based ethanol to lower grain costs alongside higher ethanol prices, expanding non-fuel uses for grain alcohol, and rising ethanol blending mandates that reach 15% or more. It also points to international policy momentum, with Brazil expanding corn-based ethanol capacity and several European countries increasing wheat use in ethanol production.

The outlet highlights India as the fastest mover, saying the country set a target of 20% ethanol blending by 2030 in 2018 and reached it five years early. It reports India is shifting to corn as a primary feedstock, reducing exports while increasing imports due to growing domestic industrial demand, and that animal feed uses nearly half of India’s corn production.

Latest closeWheat $619.00 ▲3.2%|Corn $451.75 ▲3.9%

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