by The ethanol market consists of biofuel derived from agricultural feedstocks such as corn, sugarcane, and wheat. Ethanol is mainly used as an oxygenate and octane booster in unleaded gasoline and also serves as an alternative fuel in flexible-fuel vehicles. It is also used as a cook fuel as well as in liqueurs, alcoholic drinks like rum, and perfumes. Growing environmental concerns regarding carbon emissions from vehicles and increasing regulations to reduce carbon footprint are augmenting the demand for biofuels globally. Ethanol being a renewable source of energy and having lower greenhouse gas emissions as compared to gasoline, is gaining wide acceptance as an alternative fuel.
The global Ethanol Market is estimated to be valued at US$ 114.02 Bn in 2023 and is expected to exhibit a CAGR of 3.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the ethanol market is growing production of cellulosic ethanol. Cellulosic ethanol is produced from lignocellulosic biomass which includes agricultural residues such as corn cobs and stover, sugarcane bagasse, and dedicated energy crops such as switchgrass. Cellulosic ethanol offers significant advantages over corn-based ethanol such as lower production cost, reduced competition with food crops, and net greenhouse gas reduction. Major players in the market are investing heavily in R&D activities to commercialize cellulosic ethanol technologies at a large scale. For instance, POET-DSM Advanced Biofuels LLC, a joint venture between POET LLC and Royal DSM, is constructing a commercial-scale cellulosic ethanol plant in Emmetsburg, Iowa with a production capacity of 30 million gallons per year. Such initiatives are expected to boost the production of cellulosic ethanol globally during the forecast period.
Porter’s Analysis
Threat of new entrants: The ethanol market requires high capital investments for setting up production facilities. This acts as a deterrent for new players to enter the market.
Bargaining power of buyers: The presence of a large number of producers and buyers in the global ethanol market limits the bargaining power of individual buyers.
Bargaining power of suppliers: Corn is the major raw material used for producing ethanol. The availability of corn from a large number of suppliers across regions reduces their bargaining power.
Threat of new substitutes: Alternate biofuels such as biodiesel offer competition to ethanol. However, the high demand for ethanol fuel blending continues to drive the market.
Competitive rivalry: The global ethanol market experiences intense competition due to the large number of producers operating worldwide.
Key Takeaways
The global ethanol market is expected to witness high growth during the forecast period of 2023-2030. The market size is projected to reach US$ 114.02 Bn by 2024.
Regional analysis: North America dominates the global ethanol market with the largest share. The US is the major producer and consumer of ethanol globally. Availability of abundant feedstock such as corn drives the market in the region. Asia Pacific is expected to be the fastest growing market during the forecast period with countries like China and India boosting ethanol production.
Key players: Key players operating in the ethanol market are Archer Daniels Midland Company (ADM), Valero Energy Corporation, Green Plains Inc., Flint Hills Resources LP, and POET LLC. These players are focusing on capacity expansion and mergers & acquisitions to strengthen their market position.
