With so many countries shifting toward sustainability, it makes sense that now is a good time to consider investing in ethanol stocks. The United States, Europe, and China have made long-lasting moves toward being green, with a tripled number of renewable energy deals sealed in recent years.
In addition to countries moving towards sustainability, combustion engines are starting to experience their final days as battery and biofuel-powered vehicles rise in popularity and accessibility.
With nearly 20 countries already setting zero-emissions targets for their populations, investing in ethanol sustainability is a great way to support neutral emission transport while increasing your bottom line.
Globally, the top 10 performing car makers have invested over 200 billion dollars into EVA technology and opened or invested in public ethanol companies supporting eco-friendly options for their upcoming green fleet development.
With this in mind, we have compiled a list of some of the top ethanol stocks ETFs to invest in that show great potential for lasting growth.
Our Criteria For Choosing The Best Ethanol Stocks
Many companies offer green investments, biofuels, and other renewable resources, but those specializing in ethanol are less numerous. If you want to support ethanol sustainability, putting your money into ethanol stocks is a great way to go about it.
In order to make our list, companies either need to have a direct connection with the production of green energy, such as ethanol, or they need to supply specific ingredients or parts needed for the production of ethanol. Most of the ethanol stocks on our list offer unique competitive advantages in ethanol production and feature positive financial health.
See Related: Best Impact Investing Jobs
Top Stocks To Check Out If You Are Interested In Ethanol Investing
Bluefire Renewables (BFRE)
BlueFire produces and supplies ethanol and other renewable liquid fuels locally and internationally. The company uses cellulose from opportunistic sources such as municipal green waste and trash.
They convert green waste into ethanol and other types of clean energy while reducing planned fuel production.
In terms of sustainability, this company uses waste for fuel and avoids using farmland and food sources as fuel alternatives. This helps lower emissions, reduce waste, and create renewable energy efficiently.
This is one of only four companies awarded government funding to create factories producing cellulosic ethanol commercially. In terms of investment, this is as close to a sure bet as you will find with biorefineries planned to be built in areas with high demand.
See Related: Environmental Justice Jobs | Careers That Make A Difference
VeraSun (VSE)
Ethanol plants are a much-needed part of the energy field, but some companies face problems that may cause their funding to be cut. Despite government subsidies, several top-rated companies are doing well without the help of the big government.
VeraSun (VSE) is one of the top performers in the ethanol space, with strong ratings from ESG and stock analysts in general. Though its ratings may seem average on the surface, the economics of the ethanol sphere is rather convoluted. However, the company has shown steady gains over the last several quarters.
It also features an aggressive program for advancing its market share in the sustainability field.
See Related: Ways to Invest in Cobalt (Sustainably)
Andersons Inc (ANDE)
The Andersons is a creative way to benefit in the ethanol stocks market, specifically when agriculture bull markets are so volatile. While many countries try to combat rampant inflation, ethanol is still strong.
Most companies that sell agricultural commodities are being hurt by attempts to curb inflation. Still, demand for green energy is increasing, which puts pressure on producers to maintain a steady supply. Andersons Inc. is navigating the bull market with surprising aplomb despite the pandemic.
The stock is stable mainly because the company is involved in all aspects of the ethanol supply chain. It offers transportation cars for other biofuel providers and export facilities, grain storage, and even has its hands in the fertilizer field used to nourish biofuels. With so many irons in the fire investing in Andersons Inc., this year is a way to support green energy with minimal risk.
See Related: Things to Know About Climate Refugees
Pacific Ethanol (PEIX)
Most ethanol companies base their operations in the Midwest due to shipping and transportation costs. Pacific Ethanol took an alternative approach and built several small plants up and down the West Coast to make it easier for their customers to access the fuel they need.
Little details like this make Pacific Ethanol a great stock to consider. Because the plants are near cattle yards, they can save money on energy, which easily translates to higher market gains.
See Related: Investing in Carbon Credits: Do They Leave an Impact?
Archer Daniels Midland (ADM)
Archer Daniels Midland has produced and distributed more than 2 billion gallons of ethanol annually and is planning to ramp up operations further. The company produces ethanol and offers a broad range of services in the agriculture industry.
This puts the company in a unique position that allows them to maintain steady growth while also cutting costs across the board in the field of renewable energy.
ADM will often customize its green spending to match the renewable energy market, further supported by its diverse business portfolio. If you are interested in investing in the sustainable industry, this safe best stock offers moderate but steady returns over the long haul.
See Related: Best ESG Funds to Invest for Impact
Green Plains Renewable Energy (GPRE)
Green Plains Renewable Energy promotes green energy and fiercely preserves its profit margins. It is all set to merge with the Great Lakes corn cooperative, which will lower its raw corn prices and increase its stock value.
It is the perfect time to consider investment while the cost per share is still moderate. The upcoming merger will also lower production costs, leading to better market performance overall. If you are looking for affordable ethanol stocks with generous growth potential, this is a great option to pick up before the prices soar.
See Related: Investing in Carbon Credits: Do They Leave an Impact?
Aventine Renewable Energy (AVRW)
Pure-play ethanol producers are among the safest choices when investing in green energy. Big names such as Aventine Renewable Energy, with a $490 million market cap, are actually the second-largest names in the field.
They are so big that they can use their sheer size to purchase and produce ethanol on a scale that makes it harder for smaller companies to compete. It has featured a solid balance sheet for several years and has even started acquiring smaller refineries to add to its extensive network. Thankfully, they are in the sustainable energy field to make money and help the planet.
To that end, they also offer other clean energy refineries and producers access to a unique distribution network that helps cut down on fuel transportation. In addition to reducing emissions in the industry, this side project adds a steady stream of income, which helps keep the company’s stock performance steady.
See Related: Best Impact Investing Apps
Cosan Ltd (CZZ)
Cosan Ltd is a Brazilian company that offers a range of infrastructure segments and renewable energy options. Their main product is ethanol and sugar, both of which are distributed through a comprehensive service station network.
In addition to ethanol and sugar, the company also has a successful farmland development operation and green lubricants distribution business. The cost of production is much lower in the country, which also helps the company manage costs while still providing an international-class product.
They are smaller than other big companies in the biofuel and natural gas field, but they offer steady gains and ethical investment options.
See Related: What is a Quadruple Bottom Line?
American Resources Corp. (REX)
Publicly traded ethanol stocks are easy to track but not always easy to understand. Rex has been available on the open market since 1984, and the company itself was founded in 1980. It offers natural gas and is a grain distiller. In recent years, it has also entered the renewable energy market and offers retail ethanol.
This company is a great investment for ethanol stocks because it is also a holding company in various energy entities, several of which are focused on renewable energy. Their factories are located in the corn belt, which cuts down on cost and helps them maintain a minimal carbon footprint.
The company can produce just over 700 million gallons annually and plans to expand its operations in the coming years. Despite the pandemic and the general global slowdown in consumption, their portfolio has shown some moderate gains.
See Related: History of Impact Investing
SunOpta (STKL)
SunOpta, Inc. was founded in 1973 as a food and mineral company. It has since become a multi-national company with a diverse portfolio of businesses and interests.
All of the businesses under the SunOpta umbrella are high-growth and completely ethical. The company’s focus has always been natural and organic food markets, so stepping into clean, green energy was a natural progression.
They have three main units in their business that are focused on processing, sourcing, and distributing organic and natural food products SunOpta Food Group. Another company that is focused on distributing, recycling, and producing industrial materials is Opta Minerals Group.
The third is also tasked with creating proprietary pretreatment systems for the pulp processing, food processing, and renewable fuels industries. Each section’s proprietary nature gives it a competitive edge and makes its ethanol stocks valuable.
See Related: Best Farmland REITs
Is Ethanol Good for the Environment?
Before investing in ethanol stocks, it makes sense to wonder if ethanol is good for the environment. Overall, it is better than fossil fuels and produces fewer greenhouse gas emissions for the same usage. Most ethanol-gasoline blends, such as E85, have between 83% and 84% ethanol and feature less volatile components than traditional fuels.
The benefit of ethanol sustainability is far-reaching. It is a product of processed corn that grows in abundance all over the world. This reduces the need for drilling and the use of shale oil. As a result, using and investing in ethanol stocks is good for the environment and benefits your bottom line.
See Related: Best Impact Investing Books to Read
How to Invest in Ethanol
Investing in green energy is pretty simple if you care about ethanol sustainability. With the spotlight on non-hydrocarbon energy, ethanol stocks have soared. You can directly invest in an ethanol producer or buy ethanol stocks from a company supporting ethanol production companies.
For example, you can buy stock in a company that manages the processing of the corn used in ethanol production or even in the farms that supply the corn to ethanol producers.
Archer Daniels Midland is the largest producer of corn-based ethanol, and you can invest directly or in one of their subsidiary businesses supporting their main clean energy goals.
Related Resources
