Ethanol and the Economy

The ethanol industry plays an important role in Minnesota's economy, contributing $2.5 billion annually to the state's gross domestic product (GDP). 

Following the enactment of the RFS and EISA in 2005 and 2007 respectively, ethanol production in the United States has steadily increased. In tandem with this increase, more ethanol plants have been established and more jobs have been created which in turn has had a tremendous impact on the economy.

In Minnesota, a study by the University of Minnesota Extension said the ethanol industry contributed $2.5 billion to the state's GDP in 2023, generated $6.6 billion in economic activity for Minnesota businesses, $1.3 billion in household income, supported 20,914 full time jobs and paid $182.9 million to state and local taxes.

The ethanol industry’s expenditure included corn, industrial chemicals, electricity, natural gas, water, labor and services such as maintenance, insurance and general overheads. Spending for these goods and services represented the purchase of output of other industries that operate in Minnesota.

Jobs supported by the ethanol industry in 2023 included employment in ethanol production, agriculture, construction, engineering, marketing and sales, logistics, power automation, emission testing, accounting, rail transportation, industrial cleaning, water management, enzyme providers, risk management service and underground tank installation.

Nationwide, a study by ABF Economics commissioned by the Renewable Fuels Association (RFA) shows the ethanol industry contributed $54.2 billion to America’s economy in 2023 through annual operations of ethanol production, co-product output, agriculture, investments in research and development and construction.

According to the study, which can be obtained here, the ethanol industry supported 72,463 direct jobs in 2023. Including indirect and induced jobs – such as those in agriculture, transportation, retail trade and services sectors – that number rose to nearly 400,000 jobs.

The study adds that the ethanol industry spent nearly $39 billion on raw materials, other inputs, and goods and services to produce ethanol in 2023.