Increased Biofuel Production in the US Midwest May Harm Farmers and the Climate

U.S. production of biofuels has increased more than fivefold in the past two decades and nowhere has felt the impact more than the Midwest - especially among farmers and rural communities.

Driven by U.S. policies like the 2005 Renewable Fuel Standard, there's been a steep increase in production of food crops, such as corn and soybeans to create biofuels aimed at reducing climate-harming greenhouse gas emissions while increasing U.S. energy security.

But new WRI research based on both an extensive review of peer-reviewed studies and engagement with diverse Midwestern decision-makers shows the Midwest has an opportunity to rethink the role that crop-based biofuels (known as first-generation biofuels) should play in the region's future to better support people, nature and the climate.

The Potential Climate Impact of Biofuels

In the U.S., first-generation biofuels - or those made from growing food crops specifically to produce energy - are the dominant type of biofuels created, over advanced biofuels, which can be created from agricultural wastes and residues. However, first-generation biofuels such as ethanol or biodiesel also have large land footprints, which drive climate-harming emissions when land is converted from natural landscapes, such as forests or grasslands, to specifically grow crops for biofuels.

The U.S. currently grows corn and soybeans, the two most dominant biofuel feedstock crops, on 178 million acres of farmland concentrated mostly in Midwest states - including Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

When corn and soy are used to create transportation fuels, they require significant land use for minimal fuel supply. Of the 92 million acres of corn grown in the U.S., roughly one-third - about 30 million acres or about the size of the state of Mississippi - is used for ethanol production. However, despite this massive land footprint, ethanol from corn only supplied 4% of U.S. transportation fuel in 2022. And while more than 40% of the U.S. soybean oil supply has been used for biofuels each year since 2022, biodiesel made from soybeans supplied less than 1% of U.S. transportation fuel in 2022.

Beyond the emissions of producing and refining these fuels, crop-based biofuels can contribute to rising emissions by displacing more climate-friendly uses of prime farmland, such as producing food.

Some biofuels crops are also grown on low-productivity lands prone to flood, erosion or drought. These lands could instead host low-carbon energy sources such as wind and solar farms or be restored to grasslands or forests. Wind and solar farms can produce much more energy than biofuels per acre while restoring marginally productive land not needed for food could increase carbon stocks. When these land-use opportunity costs are accounted for, it becomes clear that growing food and agricultural crops for biofuels are not an effective tool to curb climate change.

Biofuel expansion is also harming communities by polluting air and water, and by straining limited water supplies in drought-prone areas. This problem will likely worsen as climate effects intensify. Research also shows that the economic benefits that many policymakers cite have been unequally distributed to larger farms, which may exacerbate long-standing inequities among Midwestern farmers and communities.

The expansion of corn and soy crops specifically grown for biofuel production increases agricultural emissions and displaces land that could be used for food or other purposes. Photo by JamesBrey / iStock.

As decision-makers assess the future of first-generation biofuels incentives in the Midwest, WRI research shows that there are three key factors to pay attention to:

1) Increased Biofuels Production Could Contribute to Economic Inequities

Midwestern biofuel production has likely widened the gap between large- and small-scale farmers as government incentives and subsidies overwhelmingly flow to larger mechanized farms that grow soy and corn. While biofuel incentives were enacted partially to help rural communities and struggling farmers, the benefits are likely to have accrued unevenly.

One study finds that nearly 57% of crop insurance subsidies, which often disproportionately support crops like corn and soy, go to the largest 10% of farms, with the top 1% of farms receiving almost double the amount of money per acre than the majority (90%) of smaller farms.

Data also shows that biofuels may not live up to promises for large-scale job creation. Currently, biofuel jobs constitute less than 2% of regional energy jobs, including agricultural jobs related to energy.

Growing crops for biofuels may also be raising prices for livestock farmers and consumers. While the Renewable Fuel Standard was responsible for $14 billion in profit from 2005 to 2015, livestock farmers lost $3 billion in 2019 alone due to higher corn and soy prices needed to feed their animals. Peer-reviewed studies have also found that biofuel production increases global food prices, potentially increasing global food insecurity.

The flow of economic benefits to large-scale farmers could also exacerbate the trend of farmland consolidation that is squeezing out small- and medium-sized farms. This leads to fewer and larger farms receiving benefits, and it is accelerating the loss of midsize farms which have historically been the economic backbone of many local communities. This contributes to economic and social challenges in the rural Midwest.

In an analysis of data from 1978 to 2017, the Union of Concerned Scientists found "large crop farms are getting larger, small crop farms are getting smaller, and midsize crop farms are disappearing." Over the almost four decades of the study, the number of large farms grew by 140%, while half of midsized farms were lost in the Midwest. While cropland consolidation has decreased the number of farmers across all racial groups, the trend has been 2.5 times more severe for Black farmers.

Increased farmland value, which is likely partially driven by biofuels production, is also contributing to inequalities among farmers. Because farmland continues to increase in value, corporations and wealthy individuals have invested in large swaths of farmland. Increased farmland value may be positive for existing landowners, but expensive land and rent can make it impossible for new farmers to succeed and those with modest resources to enter the profession.

While today Midwestern farmers tend to be white (98%), male (67%) and over 55 years old (61%), this wasn't always the case. Many Indigenous, Black and other farmers of color have lost land in the Midwest due to violence and discriminatory policies that made it difficult, if not impossible, to access finance and farm assistance. Farmers of color also are more likely to operate smaller farms that reap fewer benefits from federal assistance programs. As a result, small-scale farmers and farmers of color benefit less from first-generation biofuels subsidies.

Policymakers should assess whether additional support for biofuels may exacerbate, rather than improve, challenges facing their communities. Future agricultural and clean energy policy in the Midwest could then support all farmers and protect global consumers against rising food prices.

2) New Biofuels Production Could Put Community Health and Resilience at Risk

The lifecycle of biofuels, from crop production to refining, contributes to water and air pollution in Midwestern communities that impact people's health. For example, increased fertilizer use from expansion of corn cultivation can deplete oxygen in downstream waterways and raise concentrations of nitrates in the tap water of heavy agriculture areas. While many rural communities can see spikes in nitrate levels past the EPA limit of 10 parts per million (ppm), many average around 5 ppm, which still carry long-term health risks like cancer and birth defects. A total of 11,510 square miles of the Midwest is estimated to have groundwater nitrate concentrations above the federal limit.

An Environmental Working Group report also found Midwestern states have a high overlap between poor water quality and heavily agricultural areas, with poor water quality more likely to affect smaller, rural and lower income communities.

Refining biofuels can also contribute to climate-harming emissions and respiratory issues among nearby residents. Midwestern ethanol refineries collectively released greenhouse gases totaling 17.4 million metric tons of carbon dioxide equivalent in 2021, equivalent to the emissions caused by driving 44 billion miles, and requiring 17 million acres of forests to offset.

The refineries also contribute air-polluting volatile organic compounds and ground-level ozone, releasing an aggregate of almost 4 times the amount of acetaldehyde, acrolein, formaldehyde and hexane compared to oil refineries. Biofuel refineries have also been known to violate already-lax pollution limits, which can put nearby residents at a greater risk of respiratory issues.

Growing feedstock crops and refining biofuels also requires high volumes of water that could deplete underground aquifers used by Midwestern farms that don't get enough rainfall to irrigate crops. The Ogallala Aquifer, which supplies water to many heavily-farmed areas, for example, is expected to be 69% depleted by 2060.

As climate change intensifies droughts and erratic weather conditions, growing crops for biofuels in water-stressed areas will come with more tradeoffs. These concerns should spur policymakers to adequately weigh public health impacts and long-term risks related to the entire lifecycle of biofuel cultivation, refining and use.

3) Ramping Up Biofuels Production Would Increase Emissions

The Midwest is one of the most productive agricultural regions in the world, but as a result, it has an outsized agricultural greenhouse gas footprint comprised largely of fertilizers, animal manure management, on-farm energy use and emissions from land use change. For biofuels specifically, emissions arise from each step of the agricultural process as well as transportation, refining and combustion.

In fact, when accounting for the entire lifecycle emissions of corn ethanol production, this 'green' fuel produces more greenhouse gas emissions than gasoline. One study found that the increase of ethanol produced as a result of the Renewable Fuel Standard has 24% higher emissions intensity than fossil fuel gasoline due to domestic land-use change and fertilizer use. With corn and soy occupying over half of the nation's farmland, these first-generation feedstocks have large agricultural and emissions footprints.

Increased biofuels production can come at the expense of natural lands, like forests and grasslands, which release emissions when they are cleared to accommodate biofuels crops. One model estimates that the Renewable Fuel Standard caused 26% more conversion of U.S. natural land to cropland than would have occurred without the policy.

A separate study found that 4.2 million acres of land were converted to cropland within 100 miles of biorefineries between 2008 and 2012, further suggesting the expansion was caused by biofuel demand. Neither of these studies, however, accounts for global land-use change driven by U.S. biofuels expansion, so total land conversion could be much higher.

Another study that counted global land use change emissions found that corn ethanol emissions intensity can be twice as high as gasoline; and soybean biodiesel emissions intensity can be three times as high as traditional fossil fuel diesel.

While there is potential for advanced biofuels to provide climate benefits, those that use crops requiring dedicated use of land could have emissions impacts because they would divert cropland from food or feed production. Advanced biofuels made from agricultural wastes and residues can reduce emissions relative to fossil fuels. However, many residues are already harvested for other uses or provide important benefits like soil health, and their realistic contribution to energy supply is likely limited.

Two farmers inspect a soybean field. Biodiesel made from soybeans supplied less than 1% of U.S. transportation fuel in 2022. Photo by Zoran Zeremski / Shutterstock.

Rethinking The Future of Biofuels in the Midwest

Political support for biofuels remains strong, even though biofuels have already had a significant impact on Midwestern environments and communities. But there are opportunities to reduce the future environmental footprint and human impact of the industry.

To avoid negative impacts, it will be necessary for policymakers to place limits on future crops grown specifically for the use of biofuels. This is true both for biofuels used to power cars and for the expanding "sustainable aviation fuel" industry, which could drive a vast expansion of land devoted to biofuels crops. Measures that limit land devoted to biofuels production can be added to existing policies by capping credits for first-generation biofuel feedstocks or correcting land use change calculations in biofuel policies.

Instead of further expansion of first-generation biofuels, policymakers should investigate the potential for advanced biofuels that do not require dedicated use of land, such as fuels that use agricultural wastes or residues. WRI is currently conducting additional research on the opportunity to use corn stover (the parts of the corn, such as stalks, leaves and cobs, left in the field after its harvested) as a biofuel feedstock.

To create new, environmentally beneficial opportunities, policymakers can expand support for small-scale and marginalized farmers, incentivize nitrogen management and climate-friendly agricultural practices, and invest in the build-out of new clean energy industries in the Midwest. Additional research is also needed to identify new markets and opportunities that can equitably support farmer livelihoods, strengthen rural economies and food systems, and effectively mitigate greenhouse gas emissions. These new pathways should anticipate constraints on water, land and food supplies, and they should consider fairer and more effective ways to generate clean, renewable energy.

Editor's Note: This article was originally published on Feb. 27, 2024, and updated on June 10, 2025 with new findings, research and information.