2021 POCKET GUIDE TO ETHANOL

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ETHANOL EXPLAINEDEthanol is a renewable, biodegradable, high-octane and low-carbon motor fuel primarily derived from the sugars, starches, and cellulosic matter found in plants. Most U.S. ethanol is made from corn and processed through dry milling.

THE POCKET GUIDE TO ETHANOL is a quick reference of significant statistics

for the U.S. ethanol industry. It is a compan-

ion to the Renewable Fuels Association’s

more comprehensive Ethanol Industry Out-

look, found at EthanolRFA.org/publications/

outlook.

THE RFA has been the leading trade asso-ciation for the U.S. ethanol industry for 40

years! We are focused on driving expand-

ed demand for Ameri-

can-made renewable fuels

and bioproducts world-

wide. Membership includes

grain-based and advanced

ethanol producers, the

ethanol value chain, aca-

demia, and other industry

advocates.

Geoff CooperPresident & CEO

RFA—Helping the world breathe easier

with the power of renewable fuels.

Corn Starch93.5%

Corn/Sorghum/Cellulosic Biomass 3.7%

Corn/Sorghum 2.2%

Cellulosic Biomass 0.4%

Waste Sugars/Alcohol/Starch 0.2%

U.S. ETHANOL PRODUCTION CAPACITY BY FEEDSTOCK TYPE

Source: RFA

Grain Receiving and Storage Milling Cooking Liquefaction Fermentation

Syrup Tank Evaporator Liquids

Dried Distillers Grains Dryer Bottling, Dry Ice and Other Uses

Centrifuge

Distillation

Corn Distillers Oil

Feed

Biodiesel

Distillers Grains to Market

Distillers Grains to Livestock and Poultry

Wet Distillers Grains Solids Denaturant

Molecular SieveEthanol Storage Ethanol to Market Ethanol-Blended Gasoline to Consumer

DRY MILL ETHANOL PROCESS

Source: RFA

198

119

82

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319

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519

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172

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192

02

0*

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14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Millio

n G

allo

ns

13,800HISTORIC U.S. ETHANOL PRODUCTION

3

Twenty-five states are home to 209 biorefineries. Half of total nameplate capacity is based in Iowa, Nebraska, and Illinois—the leading producers of corn.

U.S. ETHANOL BIOREFINERIES BY STATE

WHERE IS ETHANOL MADE?Global ethanol production fell to 26 billion gallons in 2020 as a result of the coronavirus pandemic. The United States remained the largest producer, accounting for over half of global output.

European Union1,250; 5%

China880; 3%

India480; 2%

Canada460; 2%

Thailand400; 2%

Argentina230; 1%

Rest of World500; 2%

Brazil7,930; 31%

United States13,800; 53%

2020 GLOBAL ETHANOL PRODUCTION BY COUNTRY(Country, million gallons, share of global production)

Installed Ethanol BiorefineryNew Biorefinery under Construction

RI

VT

NJ

DEDC

CT

NH

MA

MD

ID

NMAZ

CA

OR

NV

WA

MT NDMN

WI

LATX

COUT

WYSD

NE

KS

OK AR

MO

IA

FL

MI NY

PA

WVVA

NC

SC

GA

ALMS

IL IN

OH

KY

TN

ME

Installed Ethanol

Biorefineries

Existing Production Capacity

(mgy)

Biorefiner-ies Under Constr./

Expansion

Capacity Under

Constr./ Expansion

(mgy)

Iowa 43 4,593 - -

Nebraska 26 2,296 - -

Illinois 14 1,867 - -

Minnesota 19 1,384 - -

Indiana 15 1,337 - -

South Dakota 16 1,223 - -

Ohio 7 676 - -

Kansas 14 615 - -

Wisconsin 9 603 - -

North Dakota 6 542 1 16

Other 15 states 39 2,300 - -

TOTAL U.S. 209 17,436 1 16

HISTORIC U.S. FUEL ETHANOL PRODUCTION

Source: RFA analysis of public and private data sources

Source: RFA and U.S. Energy Information Administration * Estimated

2

Source: RFA

54

VALUE OF OUTPUTS PER BUSHEL

Ethanol..........................................$3.48

Distillers Grains.............................$1.03

Corn Distillers Oil..........................$0.18

TOTAL $4.69

Ethanol’s Value-Added PropositionBased on average prices and product yields in 2020, a typical dry mill ethanol plant was adding approx-imately $1.27 of additional value—or 37%—to every bushel of corn processed.

CORN COST PER BUSHEL

The impact of this value-added proposition ripples throughout rural America in terms of higher tax rev-enues and GDP as job creation and higher household incomes.

ESSENTIAL FOR THE ECONOMYThe economic disruptions following both the spread of COVID-19 and the associated economic shutdowns were especially hard on rural economies, exacerbating the challenges facing U.S. farmers following several years of trying production and market conditions. Fortunately, the ethanol industry remains a major driver fueling the rural economy.

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Millio

n D

ollars

Ethanol Co-products

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*

$6,428

$16,596

GROSS VALUE OF U.S. ETHANOL INDUSTRY OUTPUT

In 2020, the production of ethanol and coproducts—a $23 billion market—had substantial economic impacts, including:

62,180 direct jobs

242,600 indirect and induced jobs

$34.7 billion contribution to GDP

$18.6 billion in household income

Ethanol biorefineries offer skilled jobs and good wages in rural communities where attractive employment opportunities are often hard to find.

Notably, 1 in 5 employees is a military veteran—more than triple the national average.

Source: RFA based on U.S. Dept. of Agriculture data *Estimated

76

EFFICIENT PRODUCERS American farmers are becoming more efficient at growing corn, harvesting a robust 172 bushels per acre in 2020 for a total production of 14.2 billion bushels.

Corn producers have been implementing conserva-tion practices and innovative technologies to reduce their footprint. These favorable farming practices combined with minor land use change have signifi-cantly lowered the carbon intensity of today’s corn ethanol.

THE PANDEMIC PIVOT The spread of COVID-19 early in 2020 upended the ethanol industry. At the peak of the crisis in late April, more than half of ethanol capacity was idled and less than a quarter of the nation’s biorefineries were running at full capacity.

From just March through November, more than 2 billion gallons of ethanol demand had been forgone. This represents more than 700 million bushels of lost corn demand and revenue losses to the U.S. ethanol industry of more than $3.8 billion.

But the U.S. ethanol industry is nothing if not resilient. Many plants pivoted to add technolo-gy allowing them to produce the high-purity eth-anol used in hand sanitizers and expanded CO2 capture to meet the rising demand for dry ice for the transport and storage of the COVID-19 vaccine.

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Dollar Sales (millions) Year-Over-Year % Change

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oll

ars

RETAIL HAND SANITIZER SALES, REPORTED WEEKLY

Source: Information Resources, Inc.

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Bu

she

ls/A

cre

Millio

n P

lante

d A

cre

s

Acres (Left) Yield (Right)

U.S CORN ACREAGE AND AVERAGE YIELD

Source: U.S. Dept. of Agriculture

98

COPRODUCTS ON THE RISE

If there was a silver lining to COVID-19 for U.S. ethanol producers, it was that the pandemic brought focus to the fact that the industry makes more than renewable fuel—a lot more.

On average, 1 bushel of corn (56 pounds) processed by a dry mill ethanol biorefinery produces: n 2.9 gallons of denatured fuel ethanol

n 15.2 pounds of distillers grains animal feed (10 percent moisture)

n 0.8 pounds of corn distillers oil

n 1.1 pounds of captured biogenic carbon dioxide

In 2020, ethanol biorefineries captured roughly 2.3 million tons of CO2, which was used for dry ice production, bottling, food processing, and other uses.

0

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*

Distillers GrainsCorn Gluten FeedCorn Gluten Meal

605

3,08729,437

U.S. ETHANOL INDUSTRY COPRODUCT ANIMAL FEED OUTPUT

Source: RFA and U.S. Dept. of Agriculture. Note: All co-products converted to 10% moisture basis *Estimated

Beef Cattle, 47%

Dairy, 31%

Swine, 15%

Poultry, 6%Other, 1%

DISTILLERS GRAINS CONSUMPTION BY SPECIES

Source: Distillers grains marketing companies

Ethanol plants also extracted 3.3 billion pounds of corn distillers oil—a $940 million market underpinning the production of biodiesel and animal feed.

0

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1 ,000

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*

3,301

Sources: U.S. Dept. of Agriculture and RFA *Estimated

CORN DISTILLERS OIL PRODUCTION

The U.S. ethanol industry generated 33.1 million metric tons of distillers grains and gluten feed/meal. These bioproducts are valuable corn and soybean meal substi-tutes in animal rations around the world.

Source: RFA based on U.S. Dept. of Agriculture data

10 11

EXPANDING GLOBAL DEMAND

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*

1,8001,6001,4001,2001,000

800600400200

0200400600800

Millio

n G

allo

ns

Exports Imports Net Exports

U.S. ETHANOL EXPORTS AND IMPORTS

Sources: U.S. Dept. of Commerce, U.S. Census Bureau, Foreign Trade Statistics *Estimated based on Jan.-Nov. 2020 data

0

2,000

4,000

6,000

8,000

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14,000

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*Th

ou

san

d M

etr

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on

s11,030

U.S. DISTILLERS GRAINS EXPORTS

Sources: U.S. Dept. of Commerce, U.S. Census Bureau, Foreign Trade Statistics *2020 estimated based on Jan.-Nov. 2020

U.S. biorefineries satisfied growing domestic animal food needs while also exporting one of every three tons of distillers grains produced, or 11.0 million metric tons. In 2020, four countries purchased roughly half of all U.S. DDGS exports, while remaining volumes shipped to another 50 around the globe.

In 2020, the United States remained the world leader in producing and exporting ethanol despite pandemic impacts on fuel consumption and prices and a further ratcheting up of trade restrictions. Exports fell 9 per-cent from 2019 to an estimated 1.3 billion gallons worth $2.3 billion.

TOP DESTINATIONS FOR U.S. ETHANOL:

1. Canada2. Brazil3. India4. European Union5. South Korea

TOP DESTINATIONS FOR U.S. DISTILLERS GRAINS:

1. Mexico2. Vietnam3. South Korea4. Indonesia5. Thailand

12 13

THE POWER OF OCTANEAutomakers are increasingly using turbocharged, high-er-compression engines requiring the use of high-oc-tane gasoline. And as the pandemic hit U.S. and global fuel markets, the need for ethanol as a clean, affordable source of octane became even more apparent. While the price of regular unleaded gasoline fell, the price of premium gasoline remained elevated. As a result, the price spread between premium and regular gasoline spiked to the highest level in at least 25 years.

A fuel’s OCTANE RATING is the measure of its ability to resist “knocking” in the engine, which is caused when the air/fuel mixture detonates prematurely during combustion. Using a lower octane fuel than required can cause the engine to run poorly and can damage the engine and emissions control system over time. It may also void your warranty.

PREMIUM GASOLINE: SHARE OF SALES AND PRICE DIFFERENCE VS. REGULAR

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Premium Share of Gasoline Sales

Wholesale Price Spread: Premium vs. Regular

Retail Price Spread: Premium vs. Regular

Ethanol has a blending octane rating of 114 AKI—the highest value of any competing octane source. Addi-tionally, aromatic hydrocarbons like benzene are toxic and worsen air pollution.

Refiners have largely optimized their processes to reduce hydrocarbon-based octane production to take advantage of ethanol’s properties. Today, most regular gasoline in the U.S. is produced using lower cost blend-stock with an octane rating of 84, which is then upgrad-ed to a rating of 87 by adding 10 percent ethanol. Higher blends like E15 and E30 offer an even greater octane boost when blended on top of today’s regular gasoline.

9395

101

104107

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Gaso

line

Ble

nd

stock

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ne

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Ben

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To

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e

Xyle

ne

MT

BE

Eth

an

ol

Meth

an

ol

Octa

ne

Rati

ng

84

114

Source: U.S. Department of Energy

BLENDING OCTANE RATINGS OF VARIOUS GASOLINE OCTANE BOOSTERS

Source: Argus Media; *Based on Jan.-Aug. 2020 data

1514

ABOVE AND BEYOND E10E15 typically has an octane rating of 88 but costs less than regular unleaded.

EPA issued a rule in 2019 allowing E15 to be sold year-round nationwide. Sales have since grown significantly, fueled by an uptick in stations offering E15 and wide-spread automaker approval. Remarkable increases in infrastructure have largely been driven by USDA’s High-er Blends Infrastructure Incentive Program, through which RFA helped many retailers secure grant funding.

2020 NATIONAL AVERAGE RETAIL PRICES FOR E10 & E85

Source: RFA based on data from E85prices.com

$1.40

$1.60

$1.80

$2.00

$2.20

$2.40

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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ce

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E10 E85

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E15 E85

2,150

5,040

EXPANSION OF U.S. RETAIL STATIONS

OFFERING E15 AND E85

ESSENTIAL FOR ENERGY SECURITYIn 2020, several events threatened the security and stability of U.S. energy markets. First came a “race-to-the-bottom” crude oil price war between Saudi Arabia and Russia. Then in April, government restric-tions and other precautions related to the pandemic caused U.S. ethanol and gasoline consumption to be cut nearly in half. Yet, the U.S. remained a significant net importer of crude oil, sending some $13 billion—or $100 per American household—to OPEC nations to pay for crude oil imports.

Fortunately, the addition of 13.8 billion gallons of ethanol to the U.S. fuel supply displaced nearly 500 million barrels of foreign oil.

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Oil D

isp

lace

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-

231

330387

471494

468 471507 525

543 564 569 558

489

Source: RFA based on U.S. Dept. of Energy data *Estimated

HISTORIC OIL IMPORT DISPLACEMENT

BY ETHANOL

Source: RFA

16

ESSENTIAL FOR CUTTING CARBON

The Renewable Fuel Standard has been an essential pol-icy for our climate, reducing CO2-equivalent GHGs from the transportation sector by 47.3 million metric tons. The Low Carbon Fuel Standard policy model already has a decade of success in California, where ethanol has provided more than 40 percent of the carbon reduc-tions achieved under the program—more than any other low carbon fuel.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

90

85

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50

Carb

on

In

ten

sity

(g

CO

2e

/MJ)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

62.13

CARBON INTENSITY OF STARCH-BASED

ETHANOL IN CALIFORNIA GASOLINE

Source: RFA using California Air Resources Board data

RFA STAFF: ST. LOUIS / MIDWEST

Geoff Cooper, President and CEO

Ken Colombini, Director, Communications

Kelly Davis, Vice President, Technical & Regulatory Affairs

Marylou Hoffman, Office Manager

Ann Lewis, Senior Analyst

Cassie Mullen, Director, Market Development

Jackie Pohlman, Manager, Member Relations

Scott Richman, Chief Economist

Missy Ruff, Director, Safety & Technical Programs

Robert White, Vice President, Industry Relations

WASHINGTON, DC

Troy Bredenkamp, Senior Vice President, Government & Public Affairs

Gidel Dawson, Manager, Government Affairs & Communications

Bob Dinneen, Senior Strategic Advisor

Mary Giglio, Director, Special Projects & Events

Connor Hamburg, Director, Government Affairs

Edward S. Hubbard, Jr., General Counsel & Vice President, Government Affairs

RFA OFFICERS

CHAIRMAN Jeanne McCaherty, Guardian Energy LLC

VICE CHAIR Erik Huschitt, Badger State Ethanol LLC

SECRETARY Rick Schwarck, Absolute Energy LLC

TREASURER Charles Wilson, Trenton Agri Products LLC

PRESIDENT Geoff Cooper, Renewable Fuels Association

Corn ethanol from a typical dry mill has roughly half the GHG emissions of gasoline.

We don’t have to wait and hope for major technological or economic breakthroughs to drive decarbonization of our liquid fuels—ethanol is available now at a low cost.

Ethanol is also the best tool available to reduce tailpipe emissions of harmful pollutants such as carbon monox-ide, exhaust hydrocarbons, air toxics like benzene, and fine particulate matter.

WASHINGTON, DC

425 3rd Street, SW

Suite 1150

Washington, DC 20024

202-289-3835

ST. LOUIS

16024 Manchester Road

Suite 101

Ellisville, MO 63011

636-594-2284

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ethanolrfa.org info@ethanolrfa.org facebook.com/ethanolrfa twitter.com/ethanolrfa instagram.com/ethanolrfa flickr.com/photos/ethanolrfa linkedin.com/company/ethanolrfa youtube.com/renewablefuelsassociation

THE ESSENTIALS