U.S. ethanol exports hit a record in 2025, but the federal government's new plan for sustaining that growth reads more like a list of priorities than an outlook. The U.S. Department of Agriculture's (USDA) American Biofuels Trade Outlook, released September 16, sets out four pillars. Those are increasing on-road ethanol blending, reducing restrictions on crop based biofuels, reaching untapped markets and accelerating opportunities with international bodies such as the United Nations aviation and maritime organizations. The document itself confirms what its four pages suggest. Each pillar carries a short list of actions, but none of them comes with an export projection, a country level demand estimate, a funding commitment or a deadline.
The underlying numbers are strong enough that the gap is worth noticing. USDA's Foreign Agricultural Service credits American farmers with shipping 2.2 billion gallons of ethanol worth $4.7 billion in 2025, a second consecutive record. Growth Energy, an ethanol industry group, and the Renewable Fuels Association, an ethanol trade association, cite similar figures and put the buyer base at nearly 90 countries. Momentum carried into 2026 too. Through June, USDA's own trade data show exports running 12% ahead of last year's record pace by volume and 21% ahead by value.
Canada's Clean Fuel Policy Is Driving Most of the Export Growth
Canada remains the foundation of the export market and typically takes more than a third of U.S. ethanol shipments. Exports there reached a record 3.1 billion liters in 2025, and the growth traces back to regulation rather than a sales push. Canadian fuel ethanol consumption grew more than 50% between 2021 and 2025, driven by the national Clean Fuel Regulations plus provincial blending mandates and low-carbon fuel standards in Ontario, Quebec and British Columbia, according to USDA's Foreign Agricultural Service. That growth is real, but it leaves U.S. exporters dependent on the durability of one government's carbon policy. A future change to Canada's rules could remove demand as quickly as the regulation created it.
UK Tariff Relief Already Closed the Country's Last Ethanol Plants
The UK opened a separate opportunity after last year's U.S.-UK Prosperity Deal eliminated a 19% tariff on as much as 1.4 billion liters of U.S. ethanol. In May 2025, the Associated British Foods warned at the time that tariff-free imports threatened its Vivergo plant. USDA's trade data confirm the warning proved accurate. The two plants that had produced virtually all UK ethanol closed in mid-to-late 2025. That leaves the UK almost entirely reliant on imports today, which is good for U.S. volume in the near term but removes the domestic buffer that once existed there if trade terms shift again.
Vietnam's New E10 Mandate Is Already Reshaping Trade Flows
Vietnam is the market USDA's blending priority fits best, and the effect showed up almost immediately. The country's nationwide E10 mandate took effect in June and eliminated pure fossil gasoline from sale. USDA projects 2026 fuel ethanol consumption there will run more than eight times last year's level, with domestic production covering only about a quarter of that demand. U.S. exports to Vietnam already reflect the shift, reaching 73 million liters through the first half of 2026, also roughly eight times the full-year 2025 total. Nebraska's ethanol industry recently joined a state trade mission promoting low-carbon ethanol to buyers in Japan and the Philippines, two markets moving through similar transitions.
India, Indonesia and Guatemala Show New Markets Aren't Interchangeable
Not every blending mandate translates into an opening for U.S. suppliers. Imported ethanol cannot be used in India's gasoline-blending program, so American product instead supplies industrial customers there while Indian producers redirect their own ethanol into fuel. Meaningful access to India's E20 market would require a policy change that has not happened. Indonesia looks promising on paper but has already slipped once. Its E10 target was pushed back to 2028 after supply and infrastructure gaps stalled earlier goals.
Guatemala shows a third pattern. A new trade negotiation produced a national E10 mandate that began rolling out in late June, but Guatemala already produces enough ethanol to meet it and is expected to keep exporting its own supply to the EU at a premium while importing cheaper U.S. corn-based ethanol to fill the mandate instead, USDA's trade data show, a wrinkle that only shows up once a market actually opens.
Brazil's Corn Ethanol Boom Is the Biggest Competitive Risk
The largest threat to sustained U.S. growth sits outside the priorities USDA listed at all. Brazil's share of global ethanol exports fell from 23% between 2020 and 2023 to just 12% in 2025, while the U.S. share grew from 48% to 64% over the same stretch. That shift happened because strong domestic Brazilian demand, not weak production, absorbed the country's growing ethanol output. Corn based ethanol accounted for more than 25% of Brazil's total production in the 2025-26 season, up from about 5% six years earlier, and Rabobank projects an additional 3 billion liters of corn ethanol capacity there by the end of 2026. If Brazilian domestic consumption growth slows even slightly, that expanding supply has somewhere to go, and U.S. exporters would be competing on price against a producer with shorter shipping distances to much of Latin America and parts of Asia.
Middle East Conflict and a New Tax Credit Add Fresh 2026 Wildcards
Two developments outside USDA's four pillars could move the numbers further than anything in the outlook itself. High energy prices tied to the Middle East conflict and the closure of the Strait of Hormuz have already pushed several countries to adjust biofuel policy on short notice. Brazil temporarily raised its mandatory ethanol blend rate to 32% for 180 days starting in July, which increases domestic consumption and could tighten the supply Brazil has left to export. The Philippines took the opposite path, giving its president authority to temporarily reduce or suspend fuel taxes and blend mandates if energy prices run high enough.
On the U.S. side, modifications to the Section 45Z Clean Fuel Production Credit under the federal One Big Beautiful Bill Act (OBBBA) extended the credit's expiration date through December 31, 2029. Crucially, the law removed the Indirect Land Use Change (ILUC) penalty from emissions calculations—a clause that previously penalized crop-based biofuels and would have kept many ethanol producers from claiming the maximum credit value. Additionally, by restricting eligibility exclusively to North American-grown feedstocks, these updates heavily shield the domestic industry, ultimately supporting higher U.S. production and driving more competitive pricing in global export markets.
A separate UK government grant to reopen one shuttered ethanol plant for carbon dioxide production, also a response to Middle East driven energy pressure, could work in the opposite direction by giving European buyers a subsidized domestic alternative to U.S. imports.
None of this means U.S. ethanol exporters are headed for a downturn. USDA's own trade data, published separately from the outlook, already track exactly the pressures that matter most. Those are Canada's policy durability, Brazil's production trajectory, and how quickly new mandates in Vietnam and Guatemala convert into contracted volume.
What the roadmap released September 16 does not do is turn any of that tracking into a forecast, a target or a deadline.
Companies exposed to ethanol trade have more reason than usual to watch USDA's own trade data updates directly rather than wait for the strategic outlook to catch up to them. Sustainable aviation fuel (SAF) is another path worth tracking, since the same alcohol chemistry drawing interest in SAF production across North America gives ethanol demand a route USDA's fourth pillar is aimed at protecting, and domestic demand is expanding too as states such as California move to widen E15 access at the pump.
