Old Data Could Limit Illinois’s Economy and Export Potential 

Haley Bickelhaupt

May 14, 2024  |  Ethanol

Accurate scientific modeling could play an important role in Illinois’s economic impact.   

 

Agriculture is poised to contribute larger financial gains for the state based on its capacity to export cleaner, renewable energy that helps the world achieve its carbon intensity goals. 

 

Case in point, in March 2023, Japan opened a new export market for Illinois farmers and allowed American ethanol full access to the fuel market. The trade growth was a result of updates to the country’s outdated carbon intensity model. The market access increased U.S. exports to Japan by 3070% or $434 million annually.  

 

The new Japanese market has helped U.S. ethanol exports increased over 40% compared to this time next year. 

 

If the growth in the Japanese ethanol export market is an indicator, Illinois and the United States have much to gain from increased ethanol and SAF exports. However, increased economic impact may be prevented by outdated information imported into models that estimate carbon intensity. 

 

As the third largest ethanol producing state, at approximately 1.4 billion gallons annually, Illinois exports corn-based renewable fuel with the lowest transportation and environmental costs. Our state’s advantage is the river system for clean and cheap global transportation, and excellent soils that give Illinois farmers the ability to grow more bushels with fewer inputs. 

 

The United States can take note of the economic success story in Japan as it approaches increasing ethanol demand and economic growth. The U.S Grains Council (USCG) reports the top markets for ethanol include Canada, Japan, the European Union, the United Kingdom, India, and Southeast Asia.  

 

 

Taking a lesson from our neighbors, Canada has been a consistent top market for U.S. ethanol since 2010. They have also been exceeding their national average blend rate since 2012 and have set a goal to reach nationwide E15 usage by 2030. Because of their reasonable approach, when the goal is reached, they will have cut carbon emissions by more than 26 million tons. 

 

India is a growing market for ethanol exports as the country looks to switch to a 20% ethanol blend (E20). USCG predicts the expansion could increase the market by 70 million gallons, based on the continued focus on biofuels and the estimated 130 new projects that are coming online in the country. 

 

Continued access to the Canadian ethanol import market and new opportunity to sell ethanol to India will hinge on our ability to accurately model the carbon intensity of corn-based ethanol and the willingness to utilize the most up to date information on yields, inputs, and conservation practices used by Illinois farmers. 

 

The shift from zero gallons of American ethanol in Japan in 2018, to a now robust market showcases the importance role ethanol can play in growing Illinois’s economy via export potential.