Ethanol Market Size To Expand at a Notable CAGR Of 6.72% During 2024 - 2032

Market Research Future (MRFR) has published a cooked research report on the “Global ethanol market” that contains information from 2018 to 2032. 

The Global ethanol market is estimated to register a CAGR of 6.72% during the forecast period of 2024 to 2032.

As per Market Research Future (MRFR) analysis the following companies as the key players in the Global ethanol market— Cargill Incorporated, Tereos TTD, a.s., LyondellBasell Industries Holdings B.V., Sasol, Valero, INEOS, ADM, GODAVARI BIOREFINERIES LTD., Panila Chem, Wilmar Sugar Pty Ltd. (Wilmar International Limited), Phaga among other key players.

Market Highlights

The Global ethanol market is projected to grow at a CAGR of 6.72% in the forecast period, and the market is expected to reach USD 165.62 million by 2032.

Some of the most critical driving factors behind the accelerated development of the global ethanol market are the rapid growth in ethanol consumption as a fuel, extensively impacting the dynamics of this market and accelerating it towards enormous growth. Ethanol is a renewable fuel obtained from different materials known as "biomass," for which production is picking up for several reasons. To name a few, changes in environmental policies, changes in the preferences of both consumers and automobiles, and general advancements in technology. Increased percentage of ethanol blends mandates by governments in many regions as part of their renewable energy programs and climate goals.

For instance, In the United States, nearly all fuel ethanol is produced from corn kernel starch, which is considered a conventional biofuel under the U.S. Renewable Fuel Standard Program (RFS). More than 98% of U.S. gasoline contains ethanol to oxygenate the fuel. Brazil—the world's second-largest consumer of fuel ethanol after United States—uses sugar cane to produce ethanol, which qualifies as an advanced biofuel in the United States under the RFS. Regulations such as the Renewable Fuel Standard (RFS) in the United States and similar policies in Brazil and the European Union enforce blending requirements that necessitate the use of ethanol in gasoline. These mandates not only promote ethanol consumption but also create a stable demand environment that encourages investment and expansion in ethanol production facilities.

Moreover, the function of ethanol as an alternative fuel is linked to the worldwide trend that fosters sustainable progress. With the increasing threat of climate change and environmental degradation, ethanol has become a viable option to reduce carbon emissions, as it is more efficient than conventional gasoline. It not only provides environmental benefits for government policy initiatives, but also attracts environmentally conscious consumers who drive demand. By establishing infrastructure to facilitate ethanol distribution, including the expansion of fuel stations, also facilitates its broader adoption, contributes to the growth of ethanol market.

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Segment Analysis

Based on feedstock, global ethanol market is categorized into Renewable, and Non-renewable. In 2023, the renewable segment accounted for 77.52% of the market revenue share. This segment is projected to maintain a Compound Annual Growth Rate (CAGR) of 7.16% in the forecast period. Ethanol, with its molecular formula C2H5OH, is a biofuel derived from organic matter, such as corn, sugarcane, or cellulosic materials. It is classified into two generations: first-generation ethanol, produced from food crops, and second-generation ethanol, derived from non-food biomass. Additionally, the concept of carbon neutrality is integral to ethanol, as it refers to the net-zero carbon emissions resulting from its production and use. Ethanol has emerged as a crucial player in the realm of renewable energy, offering a sustainable alternative to traditional fossil fuels. Its significance lies in its ability to address the pressing challenges of energy security and environmental sustainability. This article explores the historical background, key concepts, production, benefits, challenges, case studies, current trends, controversies, and future outlook of ethanol as a renewable fuel source. The production of ethanol involves different feedstocks, including corn, sugarcane, and cellulosic materials. Corn-based ethanol has been the predominant feedstock due to its abundance and high starch content. The production process includes fermentation, where enzymes convert the feedstock’s sugars into ethanol, followed by distillation to purify the ethanol. This process results in a clean and renewable fuel source. Ethanol offers numerous environmental benefits. Its combustion produces fewer greenhouse gas emissions compared to fossil fuels, contributing to the reduction of global warming. Additionally, ethanol has the potential to reduce dependence on imported fossil fuels, enhancing energy security. Moreover, ethanol production supports rural development and agriculture, creating economic opportunities for farming communities. The ethanol industry is witnessing exciting trends and developments. Technological advancements have improved ethanol production efficiency, enabling higher yields and lower costs. Research findings continue to contribute to the optimization of production processes and the exploration of alternative feedstocks. Moreover, government policies and regulations play a pivotal role in shaping the ethanol market, providing incentives and promoting its adoption.

Based on type, the global ethanol market is categorized into Extra Neutral Ethanol (EN), Neutral Ethanol, Bioethanol, Others. In 2023, the bioethanol segment dominated the market accounting for 34.24% of the market revenue share. This segment is projected to maintain a Compound Annual Growth Rate (CAGR) of 7.34% in the forecast period. Bioethanol is one of the most important renewable fuels contributing to the reduction of negative environmental impacts generated by the worldwide utilization of fossil fuels. Bioethanol is a type of fuel produced by a fermentation process using natural sugars from crops such as grasses, wood and sugar cane. In terms of the actual chemicals involved, bioethanol is identical to the ethanol found in alcoholic beverages such as beer, wine and spirits. Bioethanol is used as a fuel for road vehicles, such as cars, and also as a high-octane fuel in motor sports. In some parts of the world, many cars run on pure bioethanol. In other countries, such as America and the UK, bioethanol is mixed with regular unleaded petrol to produce blends such as E10, which most cars can run on without any engine modifications. Another common application of bioethanol as a fuel is in fireplaces for domestic heating. It is also used to power things like camping stoves and lanterns. It is a popular fuel for domestic heating because it produces a real flame with a pleasant orange colour and burns without producing smoke or leaving any ash or soot, making the maintenance of a bioethanol fire very easy. You can even install a bioethanol fire if there is no chimney.

Based on grade, the global ethanol market is categorized into Fuel Grade, Pharmaceutical Grade, Industrial Grade, Others. In 2023, the fuel grade segment dominated the market with a significant market revenue share of 54.06%. Fuel Grade Ethanol used for EBP Programme has Ethanol content more than 99.5% and should meet IS 15464:2004 specifications or revisions thereof. Fuel Grade Ethanol also contains denaturants, which makes it unfit for potable purposes. Ethanol has a higher-octane number than gasoline, providing premium blending properties. Minimum octane number requirements for gasoline prevent engine knocking and ensure drivability. Lower-octane gasoline is blended with 10% ethanol to attain the standard 87 octane. Ethanol, when used as a gasoline component, improves combustion—helping the fuel burn more completely. Thus, the quality of the environment improves. Carbon monoxide emissions are reduced, and lead and other carcinogens are removed from gasoline. People use fuel grade ethanol as a fuel additive or standalone fuel. They commonly blend it with gasoline in ratios ranging from 5% to 85%. The use of fuel grade ethanol benefits society by reducing greenhouse gas emissions, reducing dependence on fossil fuels, and increasing the octane rating of gasoline.

Based on application, the global ethanol market is categorized into Fuel Blending, Alcoholic Beverages Production, Solvents and Chemical Intermediates, Disinfectants and Sanitizers, Others. In 2023, the fuel blending segment dominated the market with a significant market revenue share of 35.84%. Ethanol has been used to enhance the quality of gasoline and reduce the rates of emissions by vehicles through fuel blending. Ethanol is here blended with gasoline in order to enable the production of different kinds of blends including E10 that contains 10% of ethanol and 90% of gasoline, E15 that has 15% of ethanol, and E85 that contains 85% of ethanol. The major positive aspect associated with the mixing of ethanol with gasoline is that it reduces carbon that accompanies the fuel, since it came from a source that is biodegradable, renewable, and obtained from biomass such as corn or sugarcane. It reduces fossil fuel consumption and serves to meet compliance requirements concerning cuts of emissions. For one, ethanol has a higher-octane rating than gasoline does; the latter makes an engine perform better and travel further. Blending ethanol fuel encourages reducing greenhouse gas emission but encourages agricultural economies. High mixes of ethanol such as E85, though, necessitate proper engine technology; in fact, regional availability is limited by infrastructure and supply chain logistics. Ethanol is blended into many aviation fuels and renewable diesel. There it helps the reductions in environmental footprint that these modes of transport are achieving. Ethanol is an improving agent for fuel lubricity, prevents engine knocking, and therefore ensures better performance and longer life in high-stress applications.

Based on end-use industry, the global ethanol market is categorized into Cosmetics, Pharmaceuticals, Chemicals, Food & Beverages, Automotive, Others. In 2023, the automotive segment dominated the market with a significant market revenue share of 36.08%. Ethanol is more than just a common biofuel within the automotive industry; it is instead a renewable fuel that primarily gets blended with gasoline to reduce emissions and increase octane ratings. These blends are then known by the names E10 (10 percent ethanol, 90 percent gasoline) or E85 (up to 85 percent ethanol). In fact, most standard internal combustion engines can run on these blends. Ethanol comes from biomass. Vehicles consuming ethanol give rise to a lesser emission of greenhouse gases that finally grieve in the atmosphere, thereby giving cleaner air and reduction in carbon footprint. Most countries have integrated policies for ethanol production and consumption to fit in with their respective renewable targets. Flex-fuel vehicles are designed to operate with high ethanol blends, thus providing much flexibility in choice. Advances in engine technology are also making ethanol more feasible, as the newer engines can optimize performance and efficiency with higher ethanol content. Agriculture directly benefits from ethanol production since it encourages crops such as corn and sugarcane. As a whole then, ethanol is assuming a critical role in shaping transportation solutions that will prove to be more sustainable in the automotive sector.

Regional Analysis

By Region, the global ethanol market is segmented into North America, Europe, Asia-Pacific, Middle East & Africa, and South America. In 2023, the North America region emerged as the dominant force in the global market, holding a substantial market revenue share of 45.79%. Ethanol is one of the significant renewable fuels in North America, primarily produced from corn in the United States and sugarcane in Canada. The U.S. is the world's largest producer of ethanol because it boasts a strong industry supported by favorable government incentives, abundant agricultural resources, and technological advancement. Ethanol is used more extensively as a blend in gasoline. The most used blended mix remains E10. This further helps clean up emissions and reduces dependence on fossil fuel. Government support to ethanol - largely through the RFS policy - further enhances the generation and usage of ethanol, which also benefits from greenhouse gas reductions and enhances energy security. State-level mandates help build up market demand. The auto industry has embraced ethanol, and demand for flex-fuel vehicles is expanding as more vehicles are built to operate on high levels of ethanol in fuel like E85. Consumers' increasing concern about the environment has also increased demand for ethanol-blended fuels. Overall, this North American ethanol contribution is a key step towards a more sustainable energy business and sound economic and agricultural policy.

Key Findings of the Study

• The global ethanol market is expected to reach 165.62 billion by 2032, at a CAGR of 6.72% during the forecast period.


• The North America region accounted for the largest market revenue share of 45.79% in 2023.


• Based on feedstock, the renewable segment dominated the global market with the largest revenue share of 77.52% in 2023.


• Based on type, the bioethanol segment dominated the global market with the largest revenue share of 34.24% in 2023.


• Based on grade, the fuel grade segment dominated the global market with the largest revenue share of 54.06% in 2023.


• Based on the application, the fuel blending segment dominated the market with the largest market revenue share of 35.84% in 2023.


• Based on the end-use industry, the automotive segment dominated the market with the largest market revenue share of 36.08% in 2023.


• The global ethanol market key players include Cargill Incorporated, Tereos TTD, a.s., LyondellBasell Industries Holdings B.V., Sasol, Valero, INEOS, ADM, GODAVARI BIOREFINERIES LTD., Panila Chem, Wilmar Sugar Pty Ltd. (Wilmar International Limited), Phaga among others