There are several issues here.

Ethanol is politically popular because it is a farm subsidy to an
extent.

Other sources of heat besides natural gas exist for firing alcohol
plants. I would think that burning the corncobs and other unwanted
biomass from the corn itself would be good, as would burning garbage.
But what do I know.

Natural gas is methane, which can be turned into methanol pretty
cost-effectively. Ethanol, despite its poorer power density and seals
compatibility issues, is far more benign and has more energy per gallon
than does methanol. Be very glad you are being required to deal with
ethanol and not methanol.

Everyone knows that materials compatibility has been something doomed
to bite aviation in the ass, hard, for decades. Certificated aircraft
rubber materials have been manufactured since the postwar period with
the same inferior grades of rubbers at great expense to avoid
recertification while everyone else now uses better, more alcoholproof
materials. Dave Blanton told me that in the mid-80s and he was right.

Operation of aircraft on E10 or E15 auto fuel is a different issue
than operating on E85 or E100 with entirely different problems
especially in terms of water separation issues.

The LyCon engines themselves, in terms of top end life especially,
actually like ethanol a lot. Their fuel systems are a different issue.
But I saw an AEIO-540 powered Pitts do an acro routine on straight
ethanol (E100) in the late eighties. The pilot said that the cylinders
lasted a lot longer than with gasoline and all competition acro pilots
would use it if permitted by aerobatic rules.