July 16, 2024

Corn Ethanol Is The Largest Segment Driving The Growth Of Ethanol Market

Ethanol is an alcohol produced by fermentation of sugars that can be used as a biofuel. It is commonly made from agricultural feedstocks such as sugar cane and corn. Ethanol provides clean burning fuel and octane boost to gasoline. It is also used to produce alcoholic beverages, pharmaceuticals, and personal care products.

The global ethanol market is estimated to be valued at US$ 114.02 Bn or Mn 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 key trends in the ethanol market is increasing usage of ethanol-blended gasoline. Various countries have mandated usage of certain percentage of ethanol blended with gasoline due to rising concerns regarding emissions from gasoline-powered vehicles. For instance, the U.S. requires use of gasoline blended with at least 10% ethanol, known as E10. Brazil utilizes gasoline blended with up to 27% ethanol nationwide. Increasing production of flex-fuel vehicles that can operate on gasoline as well as higher blends of ethanol is also promoting usage of ethanol-blended gasoline.
SWOT Analysis

Strength: Ethanol is a renewable fuel that can help reduce dependence on fossil fuels. It has a higher octane rating than gasoline which allows for more efficient engines.

Weakness: Ethanol has lower energy content per gallon than gasoline which reduces fuel efficiency. More land is required to produce the amount of ethanol needed to replace a significant portion of gasoline demand.

Opportunity: Governments across various countries are promoting the use of renewable fuels like ethanol through incentives and mandates. The growing global automotive industry increases the demand for alternative fuels.

Threats: Fluctuating corn and sugar prices directly impact ethanol production costs. International trade policies and tariffs can disrupt export markets. Low oil prices threatened the competitiveness of ethanol against gasoline.

Key Takeaways

The global ethanol market is expected to witness high growth, exhibiting CAGR of 3.9% over the forecast period, due to increasing demand for low-carbon biofuels. Countries are implementing stricter fuel emission regulations to curb vehicular pollution which is driving the adoption of ethanol blended gasoline.

The Asia Pacific region is expected to be the fastest growing market for ethanol during the forecast period due to rising energy demand and growing automotive sector in major economies like China and India. China and India have imposed ethanol blending mandates to reduce their oil imports and curb air pollution in major cities.

North America currently dominates the global ethanol market led by United States due to supportive public policies and mandates for ethanol fuel usage. The US sets a 15 billion gallons renewable fuel standard annually of which 13 billion gallons has to be ethanol.

Key players operating in the ethanol market are Archer Daniels Midland Company (ADM), Valero Energy Corporation, Green Plains Inc., Flint Hills Resources LP, POET LLC. Major players are making investments in capacity expansions to leverage the growing opportunities in renewable fuels sector globally.


1.Source: Coherent Market Insights, Public sources, Desk research

2.We have leveraged AI tools to mine information and compile it