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The ethanol market is a complex and ever-changing framework of variables that determine its picture as a component of the market economy. At the core, however, the demand for ethanol is determined by two major factors, including the state of the worldwide energy sector and the constant transformation of the fuel industry to green and sustainable sources. Alongside the global strengthening of national authority and business eagerness to decrease emissions of carbon, ethanol, a renewable and bio-fuel, is gaining more popularity. A delicate balance of market factors is the consequence of policies and regulations that foster biofuels and control the emissions of conventional fossil fuel.
This blend composition is adopted by various Indian fuel providers. Under an official prognosis, these goals are likely to be reached by 2022 and 2030 respectively with 10% and 20% ethanol blends with gasoline. For just a 10 percent mix with biodiesel, sugar factories will require an amount of 3.3 billion liters of bioethanol which will create a very robust business potential for sugar factories of India in the future.
The other important force behind ethanol market dynamics is to lower the use of fossil fuels in energy production by using renewable energy sources. Ethanol, which chiefly comes from corn and sugarcane, are a conceptual petrol substitution. The understanding that can finish fossil fuels and the environmental issues that comes with their combustion has seemed the rise in investment and initiatives for ethanol. Government mandates and subsidies, along with market incentives have a major impact on increasing sales volumes of ethanol-blended fuels with improving market conditions.
Additionally, the types of crops planted contribute to market dynamics. Access and pricing of feedstocks (corn, sugarcane) are key factors determining the ethanol production. Weather instability, new agricultural methods, and political factors might reduce crops yield through which ethanol costs and supply may rise. This interconnection of agriculture and ethanol market, hereby outlines the need for an overall knowledge of both sectors which should be considered in order to successfully manage market dynamics.
Further, factors of global economic conditions and energy prices are a strong determinant of ethanol market trends. Ethanol competes with conventional fuels in energy market; it is important to be aware that the market dynamics for ethanol and gasoline determine how much of it would be used. Economic downturn can lead to spending cuts and changes in travel patterns. It, in turn, result in fuel consumption and, at last ethanol need. Moreover, the instability of oil prices can spread on the ethanol market by influencing the prices of other eco-friendly fuels such as consumers and industries that are searching for cost-effective solutions.
Ethanol Market Highlights:
Global Ethanol Market Overview
Ethanol Market Size was valued at USD 85.90 billion in 2021. The ethanol industry is projected to grow from USD 90.10 Billion in 2022 to USD 125.94 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 4.90% during the forecast period (2022 - 2030). rising consumption of alcoholic beverages and the growing use of ethanol as a bio-fuel product are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Ethanol Market Trends
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Rapid use of ethanol as a fuel to boost the market growth
It is anticipated that increasing ethanol use as fuel will hasten market growth for ethanol. The vehicle industry has seen significant growth in recent years because of advancements in the design of small, high-efficiency motors. It has, however, had a lot of problems with lowering air pollution. The problem of rising auto air pollution is solved by blending ethanol with gasoline and other pricey fuel additives. The demand for ethanol as a biofuel is growing since it is easily produced. This makes it a more cost-effective, clean energy source than the byzantine process required to create gasoline and diesel. In order to reduce engine knocking, bio-ethanol is also employed in the automotive industry as an octane booster.
The aviation industry also benefited from the chance to experiment with ethanol blending, leading to a substantial advancement in fuel innovation. Due to the widespread supply of raw components, ethanol production is an economical process. It is feasible to replace a sizeable portion of the crude oil imported from nations like India, where raw materials are produced in large quantities.
Figure 1: Production and Consumption of Ethanol in the U.S. from 2018-2021 (million gallons)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
However, ethyl alcohol-containing beverages, which were once considered to be luxury goods, are now gradually evolving into a necessity in the majority of homes around the world. Last but not least, a government program to support the production of self-sufficient fuel and to promote the development of new businesses have increased ethanol sales throughout the world during the forecast period. Therefore, such increasing trends of production and consumption in the U.S. has enhanced the ethanol market CAGR across the globe in recent years. Moreover, the expansion of the food and beverages industry is another factor driving the growth of the ethanol market revenue.
Ethanol Market Segment Insights
Ethanol Type Insights
The ethanol market segmentation, based on feedstock, includes coarse grains, sugar cane, wheat, and molasses. The coarse grains segment held the majority share in 2021 contributing to around ~35-45% in respect the ethanol market revenue. Easy access to corn and maize and the development of effective technologies have accelerated the segment's expansion. Dry milling is the main method used to make grain-based ethanol, and one bushel of maize can provide 2.86 gallons of denatured ethanol. As producers address issues related to yields and demand saturation, corn production is anticipated to slow down ly.
January 2023:Â Two Delhi-based companies would invest Rs 295 crore in Chhattisgarh to build ethanol and power plants as well as nutritional supplements and fortified grains. For the construction of the factories, the governments of Unity Industries Private Limited and Suruchi Foods Private Limited have signed Memorandums of Understanding (MoUs).
Ethanol Application Insights
The ethanol market segmentation, based on application, includes industrial solvents, fuel, and fertilizer. The fuel segment dominated the market in 2021 and the industrial solvent is projected to be the faster-growing segment during the forecast period, 2022-2030. This is due to the increasing demand for the chemical, which is used to make gasoline additives to increase fuel economy, which is being driven by both the expanding demand for vehicle fuel and the evolving rules aimed at lowering air pollution. Hence, Due to its widespread use in important end-use sectors, the industrial solvent is one of the applications that is steadily expanding. The expanding demand from the paint & coatings and medicines industries is anticipated to have a favorable effect on the total demand. Future application segment growth will be heavily influenced by macroeconomic issues including governmental regulations and federal bank restrictions for ethanol positively impacts the market growth.
February 2019: In Saint-Pierre, Réunion Island, Albioma announced the industrial commissioning of the first peak-load combustion turbine (CT) running primarily on bioethanol. The CT uses two types of fuel: bioethanol (80%), which is made locally at the Rivière du Mât distillery by distilling sugarcane molasses, and diesel fuel (20%), which is used to start the turbine. This type of announcement has further broadened the growth opportunity for the ethanol industry.
Figure 2: Â Ethanol Market, by Application, 2021 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Additionally, in the near future, it is anticipated that legislation relating to environmental safety in both developed and emerging economies, along with rising demand from the automobile sector, will accelerate segment growth. Additionally, the application segment for beverages will grow at a sizable CAGR over the course of the projection period. The increase in demand for ethanol-based beverages in industrialized nations around the world is blamed for the expansion of the market.
Ethanol Regional Insights
By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The Asia-Pacific Ethanol market accounted for USD 37.88 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. This is attributed to the increased fuel consumption and growing industrial activities across the region.
Further, the major countries studied in the market report are The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: Â ETHANOL MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
North America's ethanol market accounts for the second-largest market share due to the presence of various types of industries in the region with a growing economy anticipated to positively impact the market growth in the North American region. Further, the United States ethanol market held the largest market share, and the Canada ethanol market was the fastest-growing market in the North American region.
The Latin America Ethanol Market is expected to grow at a significant CAGR from 2022 to 2030. This is due to the plentiful supply of raw materials and growing demand for products from the automotive sector. It is anticipated that the regional environmental restrictions will improve ethanol consumption in end-use industries. Moreover, Brazil ethanol market held the largest market share.
Ethanol Key Market Players & Competitive Insights
Major market players are spending a lot of money on R&D to increase their product lines, which will help the ethanol market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the ethanol industry must offer cost-effective fuel to expand and survive in an increasingly competitive and rising market environment.
One of the primary business strategies adopted by manufacturers in the ethanol industry to benefit various industries and expand the market sector is to manufacture locally to reduce operating costs. In recent years, the ethanol industry has provided fuel with environmental benefits. The ethanol market major player such as Kirin Holdings Company (Japan), Aventine Renewable Energy (US), United Breweries (India), Archer Daniels Midland Company (US), The Andersons, British Petroleum (UK), Advanced BioEnergy LLC (US), Cargill Corporation (US), VeraSun Renewable Energy (US), Pernod Richard (France), and others are working to expand the market demand by investing in research and development activities.
An integrated beverage firm from Japan is called Kirin Brewery Company, Limited. The Kirin Holdings Company, Limited's subsidiary owns it. Kirin Brewery Company, Limited, Mercian Corporation, and Kirin Beverages Company, Limited are some of its principal operating divisions. A member of the Mitsubishi Group is Kirin. In May 2020, the new coronavirus epidemic has prevented Asahi Breweries Ltd. and Kirin Brewery Co. from shipping draught beer to restaurants and other businesses. They have now declared that they will work together to produce alcohol disinfection for medical facilities from this beer.
Also, the Archer-Daniels-Midland Company, also known as ADM, is a multinational American corporation that was established in 1902 and has its corporate headquarters in Chicago, Illinois. The company's more than 270 processing facilities and 420 crop procurement locations worldwide transform cereal grains and oilseeds into products utilized in the food, beverage, nutraceutical, industrial, and animal feed sectors. For instance, in February 2022, officials from the local, state, and federal levels of government joined ADM and Marathon Petroleum Corp. in celebrating the groundbreaking for North Dakota's first specific plant for processing soybeans. The plant, which is owned by the previously disclosed ADM-MPC joint venture Green Bison Soy Processing, is anticipated to begin harvesting soybeans in 2023 and produce roughly 600 million pounds of refined vegetable oil annually. This oil will be supplied solely to MPC as a feedstock for renewable diesel.
Key Companies in the ethanol market include
- Kirin Holdings Company (Japan)
- Aventine Renewable Energy (US)
- United Breweries (India)
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Archer Daniels Midland Company (US) - The Andersons
- British Petroleum (UK)
- Advanced BioEnergy LLC (US)
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Cargill Corporation (US) - VeraSun Renewable Energy (US)
- Pernod Richard (France), among others
Ethanol Industry Developments
August 2019:Â The state of Maharashtra has requested authorization from the national government of India to allow sugar plants there to turn sugar stock into ethanol.
Ethanol Market Segmentation:
Ethanol Feedstock Outlook
- Coarse Grains
- Sugar Crane
- Wheat
- Molasses
Ethanol Application Outlook
- Industrial Solvent
- Fuel
- Fertilizer
Ethanol End-Use Industry Outlook
- Automotive
- Food and Beverages
- Personal Care and Cosmetics
Ethanol Regional Outlook
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- Africa
- Latin America
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