Ethanol Market Size & Growth Analysis to 2030

The global ethanol market size is estimated to grow at a significant CAGR of around 5% during the forecast period 2021 to 2027. The increasing use of ethanol as a biofuel across the globe is a major factor to drive the market growth. The outbreak of COVID-19 has negatively impacted the market but the use of ethanol sanitizers has supported the market growth positively. Furthermore, the increasing consumption of alcoholic beverages globally is anticipated to boost the market growth over the forecast period. Moreover, the increasing use of ethanol in industrial applications such as chemicals, pharmaceuticals, personal care, and beverages is projected to propel the market growth.

Market Drivers:

Government Policies and Regulations: Government policies and regulations play a significant role in driving the demand for ethanol. Many countries have implemented policies and mandates to promote the use of ethanol as a renewable fuel source. This includes blending mandates, such as the Renewable Fuel Standard (RFS) in the United States, which require a certain percentage of ethanol to be blended with gasoline. These policies create a market for ethanol and drive its demand in the transportation sector.

Increasing Focus on Renewable and Clean Energy Sources: The growing concerns over climate change and the need to reduce greenhouse gas emissions have led to an increased focus on renewable and clean energy sources. Ethanol, as a biofuel derived from plant-based feedstocks such as corn, sugarcane, and cellulosic biomass, is considered a renewable and low-carbon alternative to fossil fuels. The demand for ethanol is driven by the desire to reduce the carbon footprint of the transportation sector and achieve energy sustainability goals.

Rising Demand for Biofuels: The global demand for biofuels, including ethanol, is on the rise. Ethanol is widely used as a fuel additive and oxygenate in gasoline to enhance combustion efficiency and reduce emissions. It is blended with gasoline in varying proportions, such as E10 (10% ethanol) and E85 (85% ethanol), depending on regional regulations and market conditions. The increasing demand for biofuels, driven by the need to diversify energy sources and reduce dependence on fossil fuels, fuels the demand for ethanol.

Volatility in Crude Oil Prices: Ethanol is often used as a substitute for petroleum-based fuels, such as gasoline. When crude oil prices are high or volatile, the cost advantage of ethanol as a fuel becomes more significant. Ethanol offers a more stable and relatively lower-priced alternative to gasoline. Therefore, fluctuations in crude oil prices can drive the demand for ethanol as consumers and industries seek cost-effective fuel options.

Technological Advancements and Efficiency Improvements: Continuous technological advancements in ethanol production processes have improved efficiency, reduced costs, and increased the availability of ethanol. Innovations in feedstock selection, pretreatment methods, fermentation techniques, and distillation processes have enhanced the overall economics of ethanol production. These advancements have contributed to increased production capacity and supply, thus driving the growth of the ethanol market.

Growth in the Automotive Industry: The automotive industry plays a crucial role in driving the demand for ethanol. The increasing production and sales of vehicles, coupled with the growing consumer awareness of the environmental impact of transportation, create a demand for cleaner fuels. Flex-fuel vehicles, designed to run on high-ethanol blends such as E85, are gaining popularity in many regions. The growth in the automotive industry and the adoption of ethanol-compatible vehicles contribute to the demand for ethanol as a transportation fuel.

Supportive Infrastructure and Distribution Network: The availability of infrastructure and a robust distribution network are essential for the growth of the ethanol market. Adequate storage facilities, blending terminals, and transportation networks are required to ensure the efficient supply and distribution of ethanol. Governments and industry stakeholders have made significant investments in developing and expanding the infrastructure for ethanol storage, blending, and distribution, further supporting market growth.

Market Outlook:

Market Insights:

The global ethanol market is bifurcated into the source, application, and geography. On the basis of source, the market is further segmented into grain-based, sugar & molasses-based, and second generation. The grain-based segment dominated the global market and was valued at over two-third market share in 2020. The easy availability and the efficient technologies for development are some major factors to drive the segment growth. On the other hand, the sugar and molasses segment is accounted to grow at a significant growth rate due to the increasing adoption of the product in ethanol production.

On the basis of application, the market is segmented into automotive and transportation, Industrial Solvents, food and beverage, pharmaceutical, cosmetics and personal care, and others. The automotive and transportation segment held the largest revenue share of over 40% of the global ethanol market in 2020 and expected to grow at the same trends over the forecast period. The rising demand for fuel and the regulation to control air pollution are some major factors anticipated to boost the segment growth.

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The ethanol comprehensive study offers an in-depth analysis of industry trends, market size, competitive analysis, and market forecast – 2021 to 2027. Research Corridor report provides detailed premium insight into the global market and reveals the potential revenue streams, commercial prospects, market drivers, challenges, opportunities, issues, and events affecting the industry. In addition, the report has a dedicated section covering market forecasts and analysis for leading geographies, profiles of major companies operating in the market and expert opinion obtained from interviews with industry executives and experts from prominent companies.

The ethanol market research report presents the analysis of each segment from 2018 to 2027 considering 2020 as the base year for the research. The compounded annual growth rate (CAGR) for each respective segment is calculated for the forecast period from 2021 to 2027.

Historical & Forecast Period

• 2018-19 – Historical Year
• 2020 – Base Year
• 2021-2027 – Forecast Period

Market Segmentation:

By Source:

• Grain Based
• Sugar & Molasses Based
• Second Generation

By Purity:

• Denatured
• Undenatured

By Application:

• Automotive and Transportation
• Industrial Solvents
• Food and Beverage
• Pharmaceutical
• Cosmetics and Personal Care
• Other

By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Geographic Coverage:

Geographically, North America dominated the global ethanol market in 2020 and estimated to hold the largest revenue share of around half of the market. The United States is accounted as the largest producer of ethanol globally. A decline in automotive production has negatively impacted the market growth in 2020. However, the rapidly growing pharmaceuticals industry, the policies regarding biofuel, and the presence of some major players are anticipated to boost the market growth in the region. In contrast, the Asia Pacific is accounted to register the highest growth rate over the forecast period due to the increasing consumption of fuel and growing industrialization in the region.

Competition Assessment:

Some of the major market players operating in the global ethanol market are United Breweries, POET, LLC., AB Miller, Aventine Renewable Energy, and Valero. Companies are exploring markets by expansion, new investment, the introduction of new services, and collaboration as their preferred strategies. Players are exploring new geography through expansion and acquisition to gain a competitive advantage through joint synergy.

Key Companies:

• United Breweries
• POET, LLC.
• AB Miller
• Aventine Renewable Energy
• Valero
• Kirin
• Archer Daniels Midland Company
• Green Plains Inc.
• British Petroleum
• Pure Energy Inc.

Key Questions Answered by Ethanol Market Report

• Global ethanol market forecasts from 2021-2027
• Regional ethanol market forecasts from 2021-2027 covering Asia-Pacific, North America, Europe, Middle East & Africa, and Latin America
• Country-level forecasts from 2021-2027 covering 15 major countries from the aforementioned regions
• Ethanol submarket forecasts from 2021-2027 covering the market by source, by purity, by application, and geography
• Various industry models such as SWOT analysis, Value Chain Analysis pertaining to the ethanol market
• Analysis of the key factors driving and restraining the growth of the global, regional, and country-level ethanol markets from 2021-2027
• Competitive Landscape and market positioning of top 10 players operating in the ethanol market