Could the US-UK Trade Deal Bring a Biofuel Boom?
Ethanol entering the UK from the US will face no tariffs under a new trade deal between the two countries.
This renewable biofuel can reduce emissions and use of fossil fuels.
It is often mixed with gasoline to improve fuel octane ratings, but can also be used in power generation.
The US is a leading producer of ethanol, primarily made from plant materials like corn.
UK Prime Minister Keir Starmer said: “The new global era demands a government that steps up, not stands aside.
“This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel.
“My government has put Britain at the front of the queue because we want to work constructively with allies for mutual benefit rather than turning our back on the world.”
US President Donald Trump said: “The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers.”
What’s in the US-UK trade deal?
The trade deal primarily covers cars, steel and agriculture.
The UK steel industry will no longer face tariffs on exports to the US, being negotiated down from 25% to zero through this deal.
This just weeks after the British industry was on the brink of collapse, with the government taking control of British Steel from Jingye Group to prevent the closure of a plant in Scunthorpe.
Car export tariffs will reduce from 17.5% to 10% on a quota of 100,000 UK cars.
The deal also agreed reciprocal market access on beef, with a tariff free quota for UK farmers of 13,000 tonnes.
Ethanol, used as a biofuel and to produce products like beer, will have no tariff when imported from the US to the UK.
Ongoing negotiations will look to address other sectors, the UK government says, like pharmaceuticals and remaining reciprocal tariffs.
UK Business and Trade Secretary Jonathan Reynolds said: “I am delighted our calm approach and proactive engagement with the US has resulted in this deal which cuts tariffs for UK industry and cuts costs for businesses.
“Businesses across the country will be glad to see our approach working, but this is only the beginning.
“We look forward to strengthening our trading relationship with the US through a wider economic deal, which will help us to deliver on our Plan for Change to provide economic stability and make this country fit for the future.”
US ethanol production
In 2024, US ethanol production reached 16.1 billion gallons in 2024 and production capacity is as high as 18 billion gallons.
The Midwest, particularly states like Iowa and Nebraska, dominate production as lots of farmland is used to grow corn.
The country is also a major ethanol exporter with record shipments in early 2025.
A statement from the White House said this deal will create a US$700m opportunity in new ethanol exports.
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