NASHVILLE, Tenn. (RFD NEWS) — China is rapidly expanding coal-based ethanol production, a shift that could disrupt global biofuel markets and reduce long-term demand for U.S. corn-based ethanol. The development, highlighted by retired USDA economist Dr. Fred Gale, signals a major pivot away from traditional grain-based biofuels.
Coal-based ethanol offers a lower-cost alternative that avoids reliance on corn or other crops. Production capacity has already grown sharply, with output rising 146 percent in 2024, and expansion plans are expected to push capacity above 10 million metric tons.
At the same time, China’s grain-based ethanol plants are struggling, with low utilization rates and financial losses in key regions.
Farm-Level Takeaway: Coal-based ethanol could weaken long-term export demand for corn-based fuels.
Tony St. James, RFD NEWS Markets Specialist
This shift reflects broader policy priorities in China, including food security concerns and rising grain prices. Officials have repeatedly scaled back corn ethanol programs in the past when supplies tightened. The growth of electric vehicles and reduced gasoline demand are also limiting the need for traditional biofuels.
For U.S. agriculture, the change could reshape export opportunities. China may be less likely to import ethanol or distillers grains if coal-based production continues to expand.
Market analyst and friend of the show, Shawn Hackett, says Brazil’s shifting use of crops for biofuel production is a significant factor.
October 31, 2025 01:17 PM
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Caleb Ragland, president of the American Soybean Association (ASA), shares his reaction to news of soybean sales to China, which is considered both “welcome news” and a return to near-normal trade relations.
October 31, 2025 12:26 PM
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Farm Bureau Economist Faith Parum discusses key outcomes from the U.S.-China trade agreement and the benefits of expanding trade across Southeast Asia.
October 30, 2025 03:25 PM
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Farm CPA Paul Neiffer joined us on Thursday’s Market Day Report to discuss the implications for farmers.
October 30, 2025 02:37 PM
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Chris Bliley with Growth Energy discusses ongoing concerns about U.S. ethanol exports and the expansion of market access promised under the Phase One deal between the U.S. and China.
October 30, 2025 02:30 PM
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“It does not extinguish right away here — in any sort of sense — the real profitability concerns and people’s ability to pay bills and get to the other side of this in the very short term. This is where the skepticism builds.”
October 30, 2025 02:20 PM
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