Global Ethanol Market Research Report, 2024-29

Over the last few decades, the global ethanol industry has grown and evolved significantly, owing to a variety of factors such as increased demand for renewable energy sources, government policies promoting ethanol as a cleaner alternative to fossil fuels, and technological advances in ethanol production. The hunt for renewable energy sources to prevent climate change and reduce greenhouse gas emissions has been a key driver of expansion in the ethanol business. Ethanol, which is predominantly made from plant-based feedstocks including corn, sugarcane, and cellulose, provides a viable alternative to traditional fossil fuels like gasoline. When combusted, it emits fewer pollutants, mainly carbon dioxide, making it a cleaner-burning fuel. As concerns over climate change and air pollution have risen, several governments around the world have implemented policies to incentivize the production and use of ethanol in transportation fuels. Brazil and the United States are the world's major producers and users of ethanol. Ethanol production in Brazil is predominantly based on sugarcane, but corn is the predominant feedstock in the United States. Both countries have developed robust ethanol sectors that are backed by government mandates, subsidies, and infrastructural expenditures. Brazil, for example, has a longstanding national program called Proálcool that encourages the use of ethanol as a fuel additive or alternative. Similarly, the United States has the Renewable Fuel Standard (RFS), which requires the integration of renewable fuels, such as ethanol, into the country's transportation fuel supply. Aside from Brazil and the United States, several countries have made tremendous progress in creating their own ethanol industry. The European Union, for example, has been encouraging the usage of biofuels, including ethanol, as part of its efforts to achieve renewable energy targets and reduce dependency on imported fossil fuels. Countries like Argentina, China, and Thailand have also emerged as notable ethanol producers, leveraging their agricultural resources and industrial capabilities to expand ethanol production capacity. According to the research report, “Global Ethanol Market Research Report, 2029” published by Actual Market Research, the market is anticipated to cross USD 139 Billion by 2029, increasing from USD 104.56 Billion in 2023. The market is expected to grow with 5.05% CAGR by 2024-29. Technological improvements have had a significant impact on the ethanol industry's growth and efficiency. Biotechnology, fermentation techniques, and feedstock pretreatment innovations have resulted in higher ethanol yields, increased production efficiency, and lower costs. Furthermore, research and development activities aimed at developing advanced biofuels from non-food feedstocks such as agricultural wastes, algae, and municipal garbage show promise for increasing the ethanol industry's sustainability and lowering its dependency on food crops. Another intriguing issue is how policy frameworks and regulations shape the ethanol market. Government incentives, mandates, and targets are critical to increasing demand for ethanol and encouraging investment in production capacity. Countries with aggressive renewable energy objectives or CO2 reduction ambitions frequently implement supportive policies such as blending mandates, tax incentives, and subsidies to promote ethanol use. Conversely, policy uncertainties or changes can create challenges for industry stakeholders, impacting investment decisions and market dynamics. As such, navigating the evolving regulatory landscape is a key consideration for participants in the ethanol industry. The ethanol industry's connections to other industries, such as agriculture, transportation, and energy, are particularly notable. Ethanol production is primarily reliant on agricultural inputs, which fosters relationships between the farming community and the agribusiness sector. Furthermore, ethanol is an important component of the transportation fuel mix, combining with gasoline to lower pollutants and increase octane ratings. As the transportation sector shifts toward electrification and other fuels, the role of ethanol changes, posing both difficulties and opportunities for the industry.

What's Inside a Actual Market Research`s industry report?

Asia-Pacific dominates the market and is the largest and fastest-growing market in the animal growth promoters industry globally

Download Sample

Market Drivers • Government policies and regulations: Government policies and regulations shape the worldwide ethanol market, driving demand and investment. Many countries have adopted policies to encourage ethanol production and consumption as part of larger initiatives to reduce greenhouse gas emissions, improve energy security, and stimulate rural development. One of the most important policy tools is the introduction of blending mandates or targets, which compel a specific percentage of ethanol to be blended with gasoline in transportation fuels. For example, the Renewable Fuel Standard (RFS) in the United States requires the incorporation of renewable fuels, including ethanol, into the country's fuel supply, increasing demand for ethanol. Similarly, countries such as Brazil have created blending mandates and tax incentives to promote ethanol use, with the Proálcool program serving as a longstanding example of successful government intervention in the ethanol market. • Technological advancements and innovation: Technological developments and innovation promote continual improvement and expansion in the worldwide ethanol market, opening up new avenues for efficiency, sustainability, and cost effectiveness. Ongoing research and development activities aim to improve the competitiveness and environmental performance of ethanol production through innovations in fermentation methods, the creation of innovative feedstocks, and production technologies. For instance, the commercialization of cellulosic ethanol technology allows for the use of agricultural waste, forestry waste, and other non-food feedstocks, lowering competition with food production while expanding the ethanol industry's feedstock base.

Make this report your own

We're excited to discuss your needs and our solutions. Let's schedule a call.

Ask an Expert

Kripa Shah

Senior Analyst

Market Challenges • Feedstock competition and price volatility: Ethanol manufacturing is primarily dependent on agricultural commodities like corn, sugarcane, and other biomass feedstocks. As ethanol demand rises, so will the pressure on these feedstocks, potentially resulting in conflicts with food production, price instability, and supply chain disruptions. Weather variability, changes in land use patterns, and adjustments in global agricultural markets all contribute to increased competition for feedstocks. Adverse weather conditions, such as droughts or floods, can diminish agricultural yields, raise ethanol feedstock prices, and affect ethanol companies' profitability. Furthermore, swings in commodity prices caused by geopolitical conflicts, trade policies, and macroeconomic trends can increase market uncertainty. • Infrastructure limitations and distribution challenges: Infrastructure constraints and distribution issues pose substantial obstacles for the worldwide ethanol sector, influencing both production and consumption trends. Ethanol manufacturing plants necessitate specific infrastructure for feedstock storage, fermentation, distillation, and delivery. Furthermore, ethanol must be delivered, stored, and blended with gasoline before it reaches consumers, necessitating investment in transportation networks, blending facilities, and retail distribution channels. In many areas, the current infrastructure may be insufficient or antiquated to meet the increasing demand for ethanol, resulting in logistical bottlenecks, inefficiencies, and higher costs. For instance, insufficient storage capacity or transportation networks can cause supply chain interruptions, diminishing ethanol availability and market penetration.

Don’t pay for what you don’t need. Save 30%

Customise your report by selecting specific countries or regions

Specify Scope Now

Market Trends • Increasing demand for renewable energy sources: Ethanol, made from renewable feedstocks including corn, sugarcane, and cellulose, is a cleaner-burning alternative to traditional fossil fuels like gasoline. This spike in demand is mostly driven by growing environmental concerns about climate change and air pollution. Governments around the world are enacting tough regulations and policies to reduce greenhouse gas emissions, promoting the use of renewable fuels such as ethanol. Furthermore, advances in ethanol production methods, as well as increased consumer knowledge of the benefits of renewable energy, contribute to ethanol's growing demand. As a result, the worldwide ethanol industry is rapidly expanding, with ethanol becoming an essential component of the global energy mix. • Diversification of feedstock sources: The diversification of feedstock sources is a prominent trend in the global ethanol market. While corn and sugarcane remain the key feedstocks for ethanol production, there is a rising interest in investigating alternate feedstocks to address concerns about food security and land use competition. Cellulosic biomass, in particular, shows promise as a sustainable feedstock for ethanol production because it may be derived from agriculture residues, energy crops, and forestry residues. Furthermore, advances in biotechnology allow for the conversion of non-food biomass into ethanol, hence broadening the ethanol industry's feedstock base. Diversifying feedstock sources strengthens the global ethanol market's resilience and sustainability, lowering reliance on individual crops and mitigating the risk of price volatility. Based on source segment market is divided into natural and synthetic. Synthetic source segment is expected to grow at rapid pace in global ethanol market. Based on feedstock segment market includes starch based, sugar based, cellulose based and others. Sugar based feedstock segment is expected to grow at fastest rate in global ethanol market. Biotechnology and chemical engineering advancements have allowed for the creation of novel ethanol synthesis techniques using non-traditional feedstocks such as natural gas, coal, biomass, and industrial waste gases. These synthetic ethanol production processes, which are often based on the catalytic conversion or fermentation of syngas (synthesis gas), have several advantages over traditional ethanol production methods, including increased efficiency, greater feedstock flexibility, and a lower environmental impact. As these technologies mature and become more cost-competitive, they are propelling growth in the synthetic source segment of the global ethanol market. Weather, land use competition, and price volatility all have an impact on the availability and sustainability of traditional feedstocks like corn and sugarcane. In contrast, synthetic ethanol manufacturing enables the utilization of a wider range of feedstocks, including abundant and low-cost resources like natural gas and biomass residues. By diversifying feedstock sources, synthetic ethanol production reduces dependency on specific crops and mitigates the risk of supply disruptions, thus enhancing the resilience and sustainability of the ethanol industry. Sugar-based feedstocks include a high concentration of fermentable sugars, which can easily be turned into ethanol via fermentation techniques. Sugarcane, in particular, has high sucrose content, making it one of the most efficient feedstocks for producing ethanol. The high ethanol yield per unit of feedstock makes sugar-based ethanol production economically viable and appealing to producers, resulting in growth in this section of the global ethanol industry. Regions with suitable climatic conditions, such as tropical and subtropical areas, are ideal for sugarcane and sugar beet growth. These crops have a high output of fermentable sugars, making them ideal feedstocks for ethanol generation. Sugarcane agriculture is widespread in Brazil, India, Thailand, and Australia, providing a consistent and plentiful supply of sugar-based feedstock. for ethanol production. Based on end-user industry segment is categorised into automotive and transportation, alcoholic beverages, cosmetics, pharmaceuticals and others. Automotive and transportation industry is expected to remain revenue generation for ethanol in global ethanol market. Based on fuel blend segment market is divided into E5, E10, E15 to E70, E75 to E85 and others. E15 to E70 fuel blend segment is expected to grow at fastest rate in global ethanol market. Ethanol is used as an octane enhancer in gasoline, enhancing its performance and minimizing engine knock. Ethanol has a high octane rating, making it a desirable ingredient for gasoline mixing to meet octane and performance requirements. As automakers continue to build high-performance engines and fulfill increasingly rigorous emissions rules, demand for ethanol as an octane booster is projected to stay strong, fueling revenue growth in the automotive and transportation industries. In areas with renewable fuel credit programs, such as the Renewable Identification Number (RIN) system in the United States, ethanol producers can profit from the sale of credits linked with the production and mixing of renewable fuel. These credits give financial incentives for mixing ethanol into transportation fuels and help offset compliance costs for obligated parties, such as refiners and importers. The availability of renewable fuel credits incentivizes increased ethanol blending and supports revenue generation in the automotive and transportation sectors. Governments throughout the world are implementing policies and laws to encourage the use of renewable fuels and minimize greenhouse gas emissions from the transportation industry. Ethanol blending laws, such as the Renewable Gas Standard (RFS) in the United States and equivalent programs in other countries, call for a specific amount of renewable fuels, including ethanol, to be mixed with transportation gasoline. These mandates produce a regulatory demand for ethanol blends, ranging from E15 to E70, in the global market. Ethanol is considered a cleaner-burning fuel than regular gasoline, resulting in lower greenhouse gas and pollutant emissions such as carbon monoxide and particulate matter. As environmental concerns continue to drive the switch to renewable fuels, ethanol blends offer a sustainable solution for decreasing the carbon impact of the transportation sector. Consumers and policymakers are increasingly favouring higher-ethanol blends, such as E15 to E70, for their environmental benefits and contribution to mitigating climate change. Based on report market includes five major regions North America, Europe, Asia-Pacific, South America and Middle East & Africa. Among them Europe is predicted to grow at fastest rate in global ethanol market during the forecast period. The European Union (EU) has established ambitious renewable energy targets aimed at lowering greenhouse gas emissions and increasing the proportion of renewable energy in the total energy mix. As part of these goals, the EU has enacted regulations such as the Renewable Energy Directive (RED), which requires the use of renewable fuels in the transportation sector. Ethanol, as a sustainable and low-carbon fuel, is ideally positioned to benefit from these laws, which will drive demand for ethanol throughout Europe. Many European countries have implemented biofuel blending requirements, which require a specific amount of biofuels, including ethanol, to be blended with traditional transportation fuels such as gasoline. These mandates establish a stable and predictable market for ethanol producers, which encourages investment in production capacity and infrastructure. European governments are investing heavily in R&D to improve ethanol production processes. Europe is at the forefront of biofuel innovation, driving efficiency gains and cost savings through traditional fermentation processes as well as more creative methods like cellulosic ethanol production. Europe's commitment to sustainability extends to the ethanol industry, with attempts to promote a circular economy. Europe aims to reduce waste and improve resource efficiency by using agricultural residues, organic waste, and other by-products as feedstocks for ethanol production, contributing to a more sustainable bio economy. European countries collaborate closely on ethanol production and trade, leveraging each other's strengths to boost regional energy security and competitiveness. This collaborative strategy also includes international partnerships, with Europe playing a significant role in global ethanol markets through imports and exports. Key producers operating in the market are Cargill Corporation, Ace Ethanol LLC, Grain Processing Corporation, and Shree Renuka Sugars Ltd. These companies are involved in capacity improvement, product innovation, acquisitions, mergers, and collaborations in the market. In February 2020, Shree Renuka Sugars Ltd. expanded its production capacity from 720 kiloliters per day to 970 kiloliters per day. Increased adoption of eco-friendly products is expected to provide new growth avenues for the market players. The recent developments in the global market have brought about changes in the value chain. Initially, manufacturers relied on 2 to 3 suppliers for the raw materials and there is a risk involved as contingency plans cannot always work out. Manufacturers are now looking at options to reduce the risk by acquiring stakes in raw material companies or by entering into forward agreements. Manufacturers are currently considering ways to lower the risk, such as buying stock in raw material businesses or signing forward contracts. Initially, manufacturers relied on two to three suppliers for raw materials, which poses a risk because contingency plans do not always work. Manufacturers are now looking into ways to reduce risk, such as acquiring stakes in raw material companies or entering into forward contracts. • In May 2023, British Petroleum, a leading ethyl alcohol producer, plans to buy stakes in biofuel feedstock producers and invest directly in farming ventures to secure supplies as the global race for the low-carbon fuel speeds up. The company claimed to increase biofuel output three-fold by 2030 to 100,000 bpd, or roughly 4.5 million tons per year. • In March 2023, Wilmar Group Company Shree Renuka Sugars Ltd. announced its plan to increase the production of ethanol by 25% next year as part of its initiative towards green energy. • In February 2023, Kemin Industries introduced FermSAVER, a tea-extract product used in yeast fermentation for ethanol production, as part of its expanding Kemin Bio Solutions portfolio. • In 2023, Jagatjit Industries, based in Punjab, India, announced a massive investment to set up a grain-based ethanol production plant. With profit goals at the core, they aim to expand by catering to the growing demand for green fuels. • In 2023, Krishak Bharti Co-operative Ltd (KRIBHCO) invested around USD 11600 million to set up a grain-based ethanol production plant in the Indian states of Gujarat, Telangana and Andhra Pradesh with a production of 250 Kiloliter/ day. Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Ethanol market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Sources • Natural • Synthetic By Feedstock • Starch Based • Sugar Based • Cellulose Based • Others By End Use • Automotive and Transportation • Alcoholic Beverages • Cosmetics • Pharmaceuticals • Others By Fuel Blend • E5 • E10 • E15 TO E70 • E75 TO E85 • Others The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Ethanol industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.