World Grain - February 2023 - 6

FROM THE EDITOR
Corn-based ethanol's
uncertain future
C
orn-based ethanol often is viewed
through an extreme lens as either
an environmentally friendly alternative
to fossil fuels or more carbonintensive
than gasoline and a threat to the
environment. The conclusion reached
usually depends on which special interest
group commissioned the study.
Besides the environmental concerns
expressed by some, the corn ethanol industry
also battles a long-held view that
the fuel additive is diverting a valuable
food and feed grain to an industrial use
in a world that is seeing food insecurity
rise to unprecedented levels.
Despite having its share of detractors,
the corn ethanol industry has continued to
increase output in recent years thanks to
government mandates and a growing global
population, which means more vehicles
on the road burning gasoline/ethanol.
A potential game changer in this equation
- one that ultimately will impact
the corn ethanol industry - is the development
of battery-operated electric
vehicles. Some governments such as the
European Union and the state of California
are aggressively seeking to ban
gasoline-fueled vehicles by 2035. If they
succeed in their bid to decarbonize the
transportation sector and significantly
reduce the use of non-renewable fossil
fuels, the result will be markedly lower
demand for corn-based ethanol.
The US Energy Information Administration
(EIA) projects the share of new
US vehicle sales captured by battery
electric and hydroelectric vehicles will
grow from 8% in 2021 to 21% in 2050.
The study found that US gasoline use is
expected to decline by 4.5% between
2023 and 2037.
" By 2037, gasoline use will be lower
than 2021 levels despite population
growth that increases the demand for
transportation, " the report said. " Only
after 2037 is US gasoline expected to
6
grow as population increases offset the
declines in per-capita gasoline use. "
A recent University of Illinois study
found that US ethanol production likely
will decline between now and 2050 as
more Americans purchase electric vehicles,
resulting in a decrease in gasoline
use and a potential decline in corn prices.
The researchers noted that the price forecast
assumes corn production and other
uses continue current trends and does not
account for the potential development of
new uses for corn that could offset the
price decrease. It also doesn't factor in that
if ethanol usage decreases in the United
States and Western Europe, demand could
rise in foreign markets, especially Asia.
Electric vehicles aren't a perfect solution.
Electric car batteries make EVs more
carbon-intensive to manufacture than gaspowered
vehicles, although obviously
they emit far less carbon than gasoline
vehicles when operating. There are also
legitimate questions about how practical
electric vehicles are for long trips due to
the frequent battery charging that is needed
and whether an already strained power
grid could handle 25% or more of the
nation's vehicles having to be constantly
charged. Also, there are questions about
how to dispose of millions of car batteries
in an environmentally safe manner.
When the dust settles on this battle for
market share in the coming years, one
can envision more EVs
on the road, particularly
in developed countries,
but due to logistics
EDITORIAL
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constraints there
likely will be a ceiling
on that growth. Thus, it
won't be surprising if corn ethanol remains
a significant player in the transportation
sector over the next 30 years.
Arvin Donley
Editor
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