Key Highlights

● Ethanol traded at $2.0450 a gallon, up 1.24% on 16 October 2026 and up 28.82% year-to-date.

● EPA proposed reallocating all 2025 small refinery exemption volumes, covering 1.76 billion RINs, across 2026 and 2027.

● Fuel ethanol production stood at 1,053,000 barrels a day in the most recent week reviewed, up from 1,007,000 the week before.

US ethanol traded at $2.0450 a gallon on 16 October 2026, up 1.24% on the day and up a striking 28.82% year-to-date, though down 1.33% on the month. The main development is a federal policy proposal: on 13 October, EPA Administrator Lee Zeldin proposed revisions to Renewable Fuel Standard volumes for 2026 and 2027 that would reallocate all 2025 volumes waived through 29 small refinery exemptions, covering 1.76 billion renewable identification numbers (RINs), the second-largest annual total EPA has granted. One option would split the extra volume equally between 2026 and 2027; the other would assign all of it to 2027. Comments on the proposal are due by 4 December. The Renewable Fuels Association, which represents ethanol producers, has said most of the exemptions granted were unjustified, though that is an advocacy position from an interested party rather than a neutral assessment.

Tax Credits and Production

On 14 and 15 October, the Department of Energy launched an Emissions Value Request process for the 45Z clean fuel production tax credit, announced during a tour of an ethanol plant in York, Nebraska. How the process works wasn't detailed in the announcement, so its effect on producer economics remains unclear, though credit income has already become material for some producers, as the company results below show. Fuel ethanol production stood at 1,053,000 barrels a day in the most recent week reviewed, up from 1,007,000 the week before, so output was rising before the policy news broke. Consolidation continues in the sector too: Southwest Iowa Renewable Energy bought an ethanol plant in Ord, Nebraska, from a Pilot Travel Centers subsidiary in mid-October, a sign some operators are still expanding despite the policy uncertainty.

Demand, Exports and Price Context

Export data has looked firm: ethanol exports rose 6% in August to a five-month high, while distillers grains exports reached their highest monthly volume since August 2015. Because ethanol is blended with gasoline, fuel prices matter too; RBOB gasoline futures have traded near $3.17 a gallon, while crude oil prices have been high and volatile on Middle East supply risk. Ethanol itself is about 18% higher than a year ago despite being down modestly on the month, and there's no single ethanol price: CME Group lists Chicago ethanol futures settled against a Platts assessment, a commonly cited benchmark, but delivered prices vary by terminal and region, and producer-reported average realized prices, such as one company's $2.15 a gallon for a recent quarter, aren't directly comparable to a single day's quote.

Which US-Listed Companies Are Exposed

Green Plains (NASDAQ:GPRE) reported second-quarter net income of $67.1 million and an ethanol crush margin of $95.1 million, compared with $26.3 million a year earlier, booking $58.7 million of 45Z credits within adjusted EBITDA. It ran eight ethanol plants at 88% utilization and carried total debt of $483.7 million, so policy changes to the credit regime could matter meaningfully to its results.

REX American Resources (NYSE:REX) holds interests in six ethanol plants and reported net income of $34.9 million in its most recent fiscal quarter, including $18.4 million of 45Z income. It sold 70.6 million gallons, reported its 24th consecutive profitable quarter, and said draft EPA permits for a carbon capture project at its One Earth facility were issued in August. It ended the quarter with no bank debt, which could give it more flexibility than more leveraged peers.

Alto Ingredients (NASDAQ:ALTO) produces renewable fuels and specialty alcohols; its most recent quarter cited a wider board corn crush and an average realized price of $2.15 a gallon, with profitability holding even before 45Z earnings were included.

Valero Energy (NYSE:VLO) operates about a dozen ethanol plants alongside its core refining business, positioning it as both a seller of ethanol and a buyer under blending rules.

What Could Move Prices From Here

Support could come from firm exports, a finalized volume reallocation that lifts blending demand, higher gasoline prices, or supportive credit rules. Pressure could come from stock builds, weaker gasoline prices, policy delays, or a rise in corn costs that squeezes crush margins.