Iowa, the largest ethanol producing state, accounted for roughly 27 percent of country’s production this year. The increase in production in 2014 was the first noticeable one in years after output hovered at about 3.7 billion annually since 2011, according to Iowa Renewable Fuels Association.

For the first time, a small amount of the ethanol production came from cellulosic feedstocks such as corn stover and corn kernel fiber. Despite falling short of cellulosicproduction goals in recent years, producers of the nascent fuel are starting to show signs of delivering. In 2014, Poet-DSM opened its $275 million facility in Emmetsburg. DuPont plans to open its $225 million cellulosic ethanol plant in Nevada next year.

IRFA said the ethanol industry is facing uncertainty in Congress where some lawmakers are considering legislation that would change or repeal the Renewable Fuels Standard that requires increasingly more ethanol to be included in the country’s gasoline supply. Growth is further hindered by the inability of consumers to have access to higher blends of ethanol, such as gasoline containing 15 percent of the largely corn-based fuel, the group said.

Most gasoline contains 10 percent ethanol.

“It was nice to see Iowa take a step forward both in terms of overall production and diversity of feedstocks,” said Monte Shaw, executive director with the Iowa Renewable Fuels Association. “While Iowa could easily take another step forward in 2015 given this fall’s record harvest, continuing uncertainty with the federal Renewable Fuel Standard and lack of consumer access to E15 pose roadblocks. Ethanol continues to be the world’s cheapest source of fuel octane and until US energy policy is straightened out the growth opportunities for ethanol may be in exports.”

Iowa has 43 ethanol refineries capable of producing more than 3.8 billion gallons annually, including 22 million gallons of annual cellulosic ethanol production capacity and one cellulosic ethanol facility currently under construction. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.