Ethanol Market Is Encouraged to Reach USD 163.9 billion by 2033 at a CAGR of 4.9%

Introduction

The global ethanol market is on a strong growth trajectory, with its size projected to reach approximately USD 163.9 billion by 2033, up from USD 102.8 billion in 2023. This expansion reflects a compound annual growth rate (CAGR) of 4.9% from 2023 to 2032. Several key factors are driving this growth, including increasing demand for ethanol as a renewable fuel source, which is spurred by global efforts to reduce greenhouse gas emissions and transition towards sustainable energy solutions.

Ethanol’s role in blending with gasoline to lower carbon footprints and improve fuel efficiency is a significant contributor to its rising consumption. Additionally, the growth in the automotive sector, particularly with the push for biofuels and cleaner energy alternatives, supports the market’s expansion.

However, the ethanol market also faces challenges. Fluctuating feedstock prices, such as corn and sugarcane, can impact production costs and profitability. Moreover, regulatory changes and trade policies can influence market dynamics, potentially affecting supply chains and pricing. The industry is also confronting competition from other renewable energy sources, such as biodiesel and advanced biofuels, which can impact market share.

Recent developments include advancements in ethanol production technologies, such as cellulosic ethanol, which promises to utilize non-food biomass, thereby addressing some of the sustainability concerns related to traditional feedstocks. This innovation is expected to enhance market growth by expanding the potential for ethanol production and reducing environmental impact.

Recent developments in the ethanol market highlight significant strategic moves and advancements by key players. Archer Daniels Midland Company (ADM), a major ethanol producer, has been active in expanding its production capacity and integrating advanced technologies. ADM announced a $350 million investment in its ethanol facilities in Columbus, Nebraska, aiming to enhance production efficiency and sustainability. This investment aligns with ADM’s commitment to increasing its renewable fuel output and reducing carbon emissions.

Aventine Renewable Energy has also made notable strides, focusing on boosting its ethanol production capabilities. The company secured $200 million in funding to support the development of a new ethanol plant in Illinois, which is expected to increase its production by 20% once operational. This expansion will help meet the growing demand for ethanol as a renewable fuel and strengthen Aventine’s market position.

AB Miller, a subsidiary of Anheuser-Busch InBev, has entered the ethanol market with a strategic acquisition. In 2023, AB Miller acquired a controlling stake in a large ethanol production facility in the Midwest, valued at $150 million. This move allows AB Miller to diversify its business and capitalize on the rising demand for ethanol.

United Breweries has been involved in recent product innovations related to ethanol. The company launched a new line of bioethanol-based products designed for use in both fuel and industrial applications. This product launch is part of United Breweries’ broader strategy to integrate more sustainable practices into its operations and contribute to the growing ethanol market.

Statistics

Ethanol produced from cane juice is priced at Rs 65.61 per litre, while rates for ethanol from B-Heavy and C-Heavy molasses stood at Rs 60.73 and Rs 56.28 per litre.
ethanol blending in India has reached 13.3 per cent by July of the current season, up from 12.6 per cent during the 2022-23 season.
Ethanol usage began to increase in the United States in the 1980s and 1990s when government regulations encouraged the use of ethanol as replacements for harmful gasoline additives such as benzene octane boosters.
RFS and EISA, virtually all domestic motor fuel contains at least 10% ethanol (E10), which can be used by all vehicles.
In fact, only 68 percent of a bushel of corn is used to produce ethanol. For the 2023/24 marketing year, total supply of corn is estimated at 16.72 billion bushels of which 5.37 billion bushels will be used for ethanol and its co-products.
It takes an average of 2.7 gallons of water to produce a gallon of ethanol. In comparison, it takes between 2.1 – 5.4 gallons of water to produce a gallon of crude oil.
Ethanol, from the production process to its usage as a fuel, reduces greenhouse gas emissions by 34% to 44% in comparison to gasoline.
Production and use of renewable ethanol from ePURE members reduced greenhouse-gas emissions by an average of 78.4% compared to fossil fuels in 2022,
The record-high GHG-saving performance of ePURE members’ ethanol was also accompanied by significant production of food and feed co-products (5.9 million tonnes of commercial product) and of captured CO2 (1.1 million tonnes) – more ways in which ethanol production contributes to EU food security and offsets fossil fuel use.
There were 56 biodiesel plants with a combined 2.09 billion gallons per year of production capacity in the U.S. as of Jan. 1, 2024, according to data released by the U.S
The U.S. was home to 22 renewable diesel plants with a combined 4.328 billion gallons of annual production capacity.
The US produces the most ethanol worldwide (~57%), primarily from corn. Brazil is the next largest producer with 27%.
E10 (10% ethanol) is currently commercialized and research is going on higher percentage of ethanol blend in gasoline to meet the energy demand and factor for reducing climate change by 2030.
The only viable solution is ethanol, up to 10 % of which can be used directly with spark ignition engines. However, for a higher percentage, a gasoline engine modification is required.
Currently most of the ethanol is produced by starch-based crop. USA and Brazil together produce 80 % of the total ethanol commercialized world-wide.
India imported crude oil of 226 million metric tons (MMT) during 2018–19, 2.75 % greater than last year. In 2018–19, the production and consumption of petro-products were at 262.36 MMT and 213.22 MMT,with an average growth of 3.42 %.
India imported crude oil of 226 million metric tons (MMT) during 2018–19, 2.75 % greater than last year. In 2018–19, the production and consumption of petro-products were at 262.36 MMT and 213.22 MMT, respectively, with an average growth of 3.42 %.
According to data from the Energy Information Administration that has been seen by the Renewable Fuels Association, production has fallen by 16.4%, or 165,000 barrels per day to a total of 840,000 barrels per day.
The volume of gasoline supplied to the US market, which is a measure of implied demand, fell to 6.6m barrels per day, which was 24.6% lower than the previous week and 27% lower.
Using ethanol helps reduce carbon dioxide (CO2) emissions by 30 – 50%.
In 2014, the 14.3 billion gallons of ethanol produced reduced greenhouse gas (GHG) emissions from on-road vehicles by 39.6 million metric tons. That’s the equivalent of removing 8.4 million cars and pickups from the road for one year.
According to a recent analysis by the University of Illinois at Chicago, energy requirements for ethanol production have decreased 28% since 2001, electricity demand has decreased by 32% and water use fell by 47%-all while ethanol yields increased by 5.3%.
Ethanol reduces tailpipe carbon monoxide (CO) emissions by as much as 30%, toxics content by 13% (mass) and 21% (potency) and tailpipe fine particulate matter (PM) emissions by 50%.
The production of ethanol from rice and maize lowers carbon emissions and contributes to the annual removal of 12 million automobiles’ worth of carbon off the road.
India is expected to generate 330 lakh tonnes of sugar for the current sugar season of 2022–2023 after diverting roughly 43 lakh tonnes for ethanol production. It is anticipated that domestic consumption will be roughly 275 lakh tonnes.
The ethanol production capacity in India has increased from 423 crore litres in 2019-20 to 947 crore litres in 2022-23.
Oil India, a state-run company, plans to invest over Rs 8,000 crore in the 2G (second generation) ethanol market in light of India’s desire for biofuels and the recent launch of the Global Biofuels Alliance.
Ethanol is environment friendly as one crore litre of ethanol blended petrol can save around 20,000 tons of carbon dioxide emission. Greenhouse gas emissions due to the EBP Programme were reduced by 318.2 lac tons.
Road transport is over 90% reliant on fossil oil and transport CO2 emissions are still growing. They grew by 2.5% annually between 2010 and 2015 globally and are on track to become the largest GHG emitting sector, especially in developed countries.
For OECD countries they need to decline by 2.1% annually between 2015 and 2025.
Brazil has the highest share of ethanol use globally, recently raising it to 27% of transport fuels. China has just announced that E10 (a blend of 10% ethanol in petrol) will be introduced by 2020.
Production was greater than 56% of capacity in all years, with an average of 88% and median of 91%.increasing ethanol consumption by roughly 1–2 billion gallons per year over what otherwise would have been produced without the RFS program.
product is a binary mixture containing a 10 to 19% ethanol concentration. The next step of the ethanol refining process is the distillation of this binary mixture to reach 99.6% and 94.7%.
the U.S., nearly 95% of all fuel used by consumer vehicles contains a blend of 10% ethanol .
In Europe, more and more ‘flexible fuel’ car options, which run on a combination of gasoline and up to 85% ethanol.
European renewable ethanol association (ePURE) members produced 5.57 billion litres of ethanol and 6.16 million tonnes of co-products in 2020, according to audited data released today by the industry group.
More than 98% of the feedstock used to produce renewable ethanol by ePURE members – including cereals, sugars, wastes and residues – was grown or sourced in Europe.
ethanol production in 2020, 5.6% was for food and beverage uses and 15.2% was for industrial applications, including hand sanitiser and other hygienic uses.
Brazil has been surpassed in terms of volumetric bioethanol production by the United States, reaching 21 billion liters per year during the 2007/2008 crop season.
In the United States, most of the ethanol is produced from corn, amounting to 24 billion liters in 2007.
In Brazil, nearly all the ethanol produced is used as biofuel, today representing >40% of total gasoline consumed in the country.
U.S. is found to increase from 4.33% (by volume) in 1995 to 4.66% in 2000.
These savings will create over $8 million of projected EBITDA per year. The reduced carbon intensity under LCFS generates $15 million of projected EBITDA.
Aemetis fully commissions Zebrex Dehydration system and achieves 20% reduction in ethanol plant natural gas use.
According to the 2019 National Survey on Drug Use and Health (NSDUH) statistics, almost 15 million people over the age of 12 in the U.S. had an alcohol.
Ethanol production in Thailand increased rapidly from 1.05 billion liters in 2014 to a peak of 1.61 billion liters in 2019.By 2019, Thailand had 28 distilleries with a total production capacity of 2.47 billion liters per year. The top producers were companies like KTIS, Mitrphol, Biofuel and KSL.
Gasoline with ethanol blended (gasohol) accounted for over 97% of all transport fuel. since 2020, ethanol consumption has dropped by 19% to around 1.3 billion liters annually. There are several factors that have contributed to this decline.
India is aiming to achieve a 20% blend of ethanol in gasoline by 2025, up from around 5% in 2020. it’s an ambitious target; pre-COVID Indian gasoline consumption was growing at around 8% per year.
We’re the nation’s second-largest ethanol producer, generating approximately 2.5 billion gallons each year.
E10 contains up to 10% ethanol, while E85 contains up to 85% ethanol. Flex-fuel vehicles are capable of running on gasoline blends containing higher concentrations of ethanol. The study found that using E10 and E85 reduced particulate matter emissions by more than 95%.
The Renewable Fuels Association says these technologies could reduce emissions by as much as 70% in the coming years. Already, ethanol made from corn kernel fiber is reducing greenhouse gas emissions by 80% or more.
Volatile organic compounds—These can damage the liver, kidney and central nervous system. The EPA reports corn ethanol reduces volatile organic compound emissions by 15%.
ethanol blending in petrol reached 15.8 percent, and cumulative ethanol blending during November 2023 to July 2024 touched 13.3 percent.The Government has estimated the demand for ethanol required for 20% blending by 2025.
The Indian ethanol market has experienced significant growth and shows promising potential .In 2023, the market reached a size of USD 6512.27million ,with a projected compound Annual growth Rate (CAGR) of 8.84 % until 2029.Ethanol dominates the market.accounting for 87.35% share in 2023.
Rising from 1.53% in 2013-14 to 10.7%in 2022 The government aims to achieve a blending target of 20% by 2025 .

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Emerging Trends

The ethanol market is experiencing several emerging trends driven by advancements in technology, regulatory support, and increasing applications. One notable trend is the growing use of ethanol in the aviation industry. Researchers are focusing on developing ethanol-blended fuels to reduce costs and carbon emissions, which presents significant opportunities for market expansion. The transportation sector is also seeing increased adoption of ethanol in ignition systems and emission control, driven by stringent environmental regulations aimed at reducing air pollution.
Another significant trend is the rising demand for ethanol-based hand sanitizers, which surged during the COVID-19 pandemic. Ethanol’s effectiveness in killing microorganisms, including bacteria and viruses, has led to its widespread use in sanitizers, supported by recommendations from health authorities like the Centers for Disease Control and Prevention.
The market is also benefiting from the abundant availability of raw materials for ethanol production, especially in developing countries. This has encouraged major companies to expand their production facilities. For instance, Shree Renuka Sugars Ltd. announced plans to increase ethanol production by 25% as part of its green energy initiatives .
Additionally, ethanol’s application as an industrial solvent and its increasing use in the cosmetic industry and various household products are expected to boost market growth. The adoption of ethanol in these sectors is driven by its effectiveness and the shift towards more sustainable and eco-friendly products.
Technological advancements in ethanol production are also playing a crucial role. Companies are investing in capacity expansion and innovation to stay competitive. For example, British Petroleum plans to increase its biofuel output three-fold by 2030, aiming for 100,000 barrels per day, which will significantly impact the ethanol market.

Use Case

Fuel Additives: Ethanol is extensively used as a biofuel additive to gasoline, improving fuel efficiency and reducing greenhouse gas emissions. Ethanol-blended fuels, like E10 (10% ethanol) and E85 (85% ethanol), are common in the United States. The market for ethanol in fuel additives was valued at approximately USD 45 billion in 2022 and is expected to grow as regulations for cleaner fuels become stricter.
Industrial Solvent: Ethanol serves as an effective industrial solvent used in the manufacture of paints, coatings, and personal care products. Its high solvency and low toxicity make it suitable for these applications. The industrial solvent segment of the ethanol market accounted for about 15% of the total market share in 2022, reflecting its significant role in various manufacturing processes .
Beverage Industry: Ethanol is a key ingredient in the production of alcoholic beverages, such as beer, wine, and spirits. The beverage industry remains a stable and lucrative segment for ethanol producers. In 2022, the beverage ethanol market was estimated to contribute around USD 20 billion, with a steady demand driven by both established and emerging markets .
Pharmaceutical and Medical Applications: Ethanol is used in pharmaceuticals as a preservative and disinfectant. It is also a critical component in the production of hand sanitizers, which saw a dramatic increase in demand during the COVID-19 pandemic. The market for ethanol in medical and pharmaceutical applications grew by 30% in 2020 and has continued to maintain high levels of demand .
Renewable Energy: Ethanol is increasingly being used in the production of renewable energy, such as ethanol-powered generators and fuel cells. This segment is relatively new but is expected to grow significantly as the push for sustainable energy solutions intensifies. Projections suggest that the renewable energy segment of the ethanol market could reach USD 10 billion by 2030 .
Cosmetic and Personal Care Products: Ethanol is a common ingredient in personal care products like perfumes, deodorants, and hair sprays due to its quick-drying properties and ability to dissolve other ingredients. The cosmetic ethanol market was valued at USD 5 billion in 2022, indicating its widespread use and consumer acceptance.

Key Players Analysis

United Breweries, known for its beer production, has also been making strides in the ethanol sector. The company leverages its by-products from beer production to produce ethanol, contributing to the renewable energy market. This initiative aligns with their sustainability goals and supports the increasing demand for biofuels. United Breweries’ efforts in ethanol production are part of their broader strategy to diversify and strengthen their portfolio in environmentally friendly energy solutions.

Aventine Renewable Energy is a key player in the ethanol market, focusing on the production and distribution of ethanol derived from corn. Their facilities in the Midwest United States enable them to produce substantial quantities of ethanol, meeting both local and international demand. Aventine’s strategic location and advanced production techniques ensure efficient operations and competitive pricing, positioning them as a significant contributor to the renewable energy sector.

AB Miller is involved in the ethanol sector through its efforts in bioethanol production, which is derived from agricultural feedstocks. The company focuses on utilizing renewable resources to create ethanol, which serves as a sustainable fuel alternative. AB Miller’s activities contribute significantly to the biofuel market, supporting cleaner energy initiatives and reducing carbon emissions.

Archer Daniels Midland Company (ADM): is a key player in the ethanol sector, with substantial investments in bioethanol production. ADM focuses on converting agricultural products like corn into ethanol, which is used as a renewable fuel source. The company has made significant strides in expanding its ethanol production capacity and improving the efficiency of its operations, contributing to the growth of the biofuel industry.

Kirin Holdings, a prominent Japanese beverage company, is actively engaged in the ethanol sector through its initiatives in bioethanol production. Leveraging its expertise in fermentation technologies, Kirin aims to produce sustainable bioethanol from non-food biomass, contributing to reducing carbon emissions and promoting renewable energy. Their focus is on developing innovative processes to enhance the efficiency and scalability of ethanol production. This aligns with Kirin’s broader commitment to environmental sustainability and corporate social responsibility.

Pure Energy Inc. is a key player in the ethanol sector, specializing in the production of bioethanol from various biomass sources. The company focuses on innovative technologies to convert agricultural waste and other feedstocks into ethanol, supporting the move towards renewable energy. Pure Energy aims to enhance the sustainability and efficiency of ethanol production, contributing to lower greenhouse gas emissions and reducing dependency on fossil fuels.

British Petroleum (BP) is significantly involved in the ethanol sector as part of its broader biofuels initiative, which aims to support the energy transition towards lower carbon fuels. BP collaborates with major agricultural companies to produce and distribute bioethanol. In recent years, BP has focused on expanding its biofuels capacity, enhancing its ethanol production capabilities to meet the growing demand for renewable energy sources.

Cargill Corporation is a significant player in the ethanol market, leveraging its extensive agricultural and industrial expertise to produce and distribute ethanol. Cargill’s ethanol production supports its strategy to offer sustainable solutions and enhance the biofuel supply chain. The company’s operations in this sector help drive advancements in renewable energy and contribute to reducing carbon emissions. Cargill continues to invest in ethanol technology and infrastructure to meet growing demand and support environmental sustainability.

Conclusion

The ethanol market is experiencing robust growth driven by increasing demand for renewable energy sources and advancements in technology. Key players such as United Breweries, Aventine Renewable Energy, AB Miller, Archer Daniels Midland Company, British Petroleum, and Cargill Corporation are actively involved in expanding production capacities and exploring new applications for ethanol. Recent trends highlight a surge in ethanol use in automotive fuels and industrial applications, driven by sustainability goals and regulatory support. With ongoing investments and innovations, the ethanol market is poised for continued expansion, offering significant opportunities for stakeholders across the value chain.

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