The early part of June 2025 has been a whirlwind for the world's ethanol market. While U.S. production reached historic levels, exports — the year's top growth driver — have started to lose steam. Tourism trends at home might boost demand, but international tensions are building. The UK is threatened by plant shutdowns because of skyrocketing U.S. imports, while India resists trade pressure to shield its booming local industry. With emerging opportunities in markets such as Peru and changing fuel behaviors, ethanol is at a crossroads — wavering between expansion and increasing resistance.
The global ethanol market in the first half of June 2025 is riding a multifaceted web of changing demand trends, policy changes, and trade tensions, where positive momentum and impending uncertainties both frame the outlook. U.S. ethanol continues to be at the forefront of this story, with production reaching record levels this month spurred by strong domestic demand and growing export markets. But as summer progresses, cracks are starting to appear beneath the surface.
In the United States, ethanol production spiked to a record high back in early June due to steady blending requirements and robust first-half export volumes. Yet as the summer driving season gains momentum, output has eased modestly. Big domestic inventories are presently softening the slow-down but increasing fuel efficiency and telecommuting trends continue to limit gasoline demand expansion — a lasting issue for ethanol makers.
Despite those headwinds, export markets have offered critical support. Overseas shipments have surged over the past year, hitting record levels in the first quarter. Key demand centers like Canada, the UK, India, the EU, and Colombia are propelling this growth, underpinned by national biofuel mandates and cleaner fuel policies. Nevertheless, recent weeks have registered a decline in U.S. exports of ethanol over the past year, even though home summer gasoline demand is about to increase. Travel data show more Americans opting for cost-saving road trips, and that might see short-term increases in demand for blended fuels.
However, as U.S. ethanol finds new customers, its aggressive advance into international markets has costs. In the UK, manufacturers are warning of a tariff-free torrent of imports from America. Local producers such as Ensus are at risk of closure, blaming an unfair playing field and demanding action now from the government. Without intervention, mass job losses and supply chain chaos are threatened.
India too stands at the crossroads. The U.S. is pushing to lower limits on foreign ethanol imports as part of wider trade negotiations — a step that has provoked fierce resistance at home. Indian policymakers worry that allowing in foreign ethanol will destabilize the country's successful domestic program, which has emerged as a source of rural livelihood and energy security. While India approaches its ambitious ethanol blending goals in advance of deadlines, its priority is shielding indigenous capacity.
Meanwhile, missions such as the recent USDA-led visit to Peru illustrate how developing markets remain a source of untapped opportunity. Peru's expanding fuel demand and restricted indigenous production provide a natural match for U.S. supply, with U.S. exports sharply increasing this year.
As June ends, the ethanol market will reach a critical point. While production and exports will remain historically high, trade policy changes and evolving patterns of fuel use will increasingly shape its future trajectory.
