Advanced BioFuels USA – Ethanol Expectations: These Trends Could Drive the Industry’s Future

by Sara Schafer (AgWeb) With the popularity of electric and hybrid vehicles growing, long-term gasoline use could drop, taking ethanol consumption with it. Will ethanol continue to be the juggernaut in the corn market?

The ethanol industry exploded in the late 2000s, as plants sprang up across the country and gobbled up billions of bushels of corn. Now almost two decades after the original renewable fuel policy was passed, the industry looks much different. With the popularity of electric and hybrid vehicles growing, long-term gasoline use could drop, taking ethanol consumption with it. Will ethanol continue to be the juggernaut in the corn market? Aside from how policy will impact the industry (it always does), here are some major trends at play.

The number of U.S. ethanol plants peaked at 201 in 2019. In 2021, the total was 192. “Domestically we’re looking at a rather mature ethanol industry,” says Ben Brown, agricultural economist at the University of Missouri. “We’re not seeing investments in new plants.”

Of the three main markets for corn, ethanol shows the lowest growth potential per USDA’s long-range forecast. In the next decade, corn used for ethanol is projected to decline from today’s 5.325 billion bushels to 5.3 billion bushels.

In 2021, the U.S. produced 53% of the world’s ethanol, per USDA. Even if the domestic market softens, Brown expects ethanol exports to be a bright spot for the industry as other countries adopt goals to reduce emissions.

Electric Vehicles: Small but Growing in Market Share

Many automakers have announced they are shifting away from internal combustion engines. For instance, General Motors set a 2035 target to stop selling vehicles powered by gasoline or diesel.

While on the surface these announcements are concerning for ethanol, Matt Roberts, senior grain and oilseed analyst at Terrain, says farmers must look at the fine print.

The first factor is how fast new electric vehicles can displace the current fleet. “The average age of a passenger car in America is 13.1 years, and it’s been increasing for the last decade,” Roberts says. “New cars are expensive, so people keep cars longer, and those cars still burn gasoline.”

Also, plug-in hybrid electric vehicles use liquid fuels or grid power. “Studies show 60% of the time those vehicles are operating on gas,” he says. “So, when we put this all together, we’re talking about a 1% to 3% decline in corn demand by 2035. The consequences are going to be small.” READ MORE

Excerpt from Grand Forks Herald: ... Take for instance the Minnesota Corn Growers Association, which supported University of Minnesota research that would use ethanol to power a range extender .

It takes into consideration that electric vehicles have their environmental and economic benefits but have their disadvantages when it comes to long-range trips. The United States Office of Energy Efficiency and Renewable Energy promotes that the median driving range was 250 miles for electric vehicles in 2020 . But a secondary ethanol-powered engine on board an EV can be used to charge the battery — on the move — in case charging stations are few and far between or you just don’t feel like stopping.

The team at the University of Minnesota’s Department of Mechanical Engineering went to work trying to determine if corn-based ethanol could offer a solution in allowing electric vehicles to travel longer distances. They worked with a BMW i3 REx engine generator, powered by E85. This engine would be under the hood of future electrical vehicles, but not connected to the wheels. It would serve as a battery charger using the power of thermochemical recuperation (TCR).

The study concluded that computer modeling showed “using ethanol blends is a viable way to increase the efficiency of spark-ignited engines. Engines running at limited operating points are an efficient way to extend the range of electric vehicles,” according to Northrop’s final report . More research may be coming soon in this area, according to Devin Hoffarth, director of Market Development & Industry Relations for Minnesota Corn Growers Association.

Minnesota Corn also worked with Agricultural Utilization Research Institute (AURI) to study the development of ethanol fuel cells, developing ethanol as a carrier for green hydrogen. That research, completed in 2022, showed that ethanol fuel cells on light-duty vehicles “does not appear to be a near term opportunity.” But that doesn’t mean it’s not an option worth exploring.

In Hoffarth's and Ron Lamberty’s opinion, moving more vehicles toward being flex fuel compatible, capable of using E85, is the fastest way to lower carbon emissions — far faster than the gradual move towards electric vehicles. ( E85 , or flex fuel, is a gasoline-ethanol blend containing 51% to 83% ethanol, depending on geography and season.)

Those marketing ethanol now and into the future say they have the tools to make change right now.

“It’s reminding those who want the environment to be better, those who want to reduce carbon pollution, that the best way to do it quickly is here, right now,” said Lamberty, chief marketing officer for the American Ethanol Coalition, of the use of ethanol to help power the transportation industry. The American Ethanol Coalition, is headquartered in Sioux Falls, South Dakota.

To demonstrate his beliefs, Lamberty bought a 2019 Ford Fusion Hybrid and had a flex fuel conversion kit installed. Because of the hybrid’s lower fuel consumption per mile and ethanol’s lower carbon output than petroleum-based fuel, his math tells him that mile-to-mile, his car puts out only a small amount more greenhouse gas emissions than a battery electric car.

Some of the best readings have shown electric vehicles in California putting out 80 grams of C02 per mile. On average, that number is closer to 170-180 grams per mile, Lamberty said. The numbers coming out of his demonstration vehicle are around 200-220 grams per mile. Meanwhile, the average passenger vehicle emits about 404 grams of CO2 per mile, according to the EPA.

That being said, as a guy who has made his living in the ethanol industry, he’s not afraid to see the electric vehicle industry succeed if that’s the right direction to go. What he tries to get people to recognize is that he believes ethanol can get to zero emissions before electric can.

“If you’re talking zero emissions vehicles, which is what a lot of the legislation is, then really, we can probably beat electrics to zero emissions before they actually get there with the electric grid the way it is in the U.S.,” Lamberty said.

He references a study by Energy Information Administration that estimates that 85% of vehicles on the road in 2050 will still be powered by liquid fuel. He feels it’s illogical to discount the strides that could be made toward net zero emissions by utilizing ethanol — right now.

Biodiesel is expected to fill the gaps that electrification won’t reach, such as heavy-duty trucks, non-road vehicles, aviation, and shipping, according to the Advanced Biofuels Association.

Hoffarth said that’s an area of focus for ethanol to invest in. One such investment is Minnesota Corn’s investment with ClearFlame Engine Technologies.“They are modifying heavy duty engines from Class 8 semi trucks to farm equipment to run on 100% renewable energy. So they are running on E-98, which is denatured ethanol,” Hoffarth said. “And that shows considerable promise.”

In yet another area supported in part by Minnesota Corn Research and Promotion Council, the Renewable Fuels Association converted a plug-in hybrid electric vehicle (a 2022 Ford Escape ) to run on flex fuels like E85. It’s promoted as the world’s first of its kind. It is said to have lower carbon intensity, along with cost, than pure electric.

"What we're trying to do is, the government and corporations can set emission goals, or carbon intensity goals, or carbon reduction goals, but don't tell us, don't handcuff us by telling us there is only one technology that can get is there," White said. "We are ahead of schedule in many cases of the goals set by the federal government. And to somehow restrict ethanol from playing an important role in that would be heavily short sighted, and we can prove that with this vehicle ... we can compete with a full battery electric vehicle today." (Robert White, Renewable Fuel Association's vice president for industry relations and lead on the concept car)

White said the benefits of this vehicle are impressive. It really has three power options. It can go over 400 miles without concern of range. It can go without charging the battery due to on-board recharging from braking and can even go with fuels other than E85 if that fuel is unavailable.

Excerpt from Washington Post: But it’s not always a slam-dunk. About 28 percent of drivers who have tried plug-in hybrids return to conventional gas-powered vehicles or regular hybrids. Tal says drivers who do that often don’t have easy charging access at home and are frustrated by a lack of reliable public charging. Such drivers might find themselves using their plug-in hybrid as just a regular hybrid, without actually plugging it into electricity.

That leads to another conundrum about plug-in hybrids — it can be hard to say exactly how good they are for the planet. A commuter who drives 30 miles round-trip to work each day in a Toyota Prius Prime and charges every night could easily go for six months without buying gas once. But the owner of a plug-in Jeep Wrangler who doesn’t charge that often would end up producing more carbon emission. This discrepancy has led some analysts to criticize plug-in hybrids, arguing that they might help automakers reach emissions rules even when drivers are mostly using gas.

Tal says that the trick is purchasing a plug-in hybrid that can travel a decent stretch without needing a charge. Some plug-in hybrids have a range of only have 21 or so miles, which might make drivers feel that the hassle of charging isn’t worth the payoff. One with almost a 50-mile range, on the other hand, can be all-electric almost all of the time and still offer flexibility on long road trips. READ MORE