July 16, 2024
Global Flexfuel Market

Global Flexfuel Market Is Expected To Be Flourished By Increasing Demand For Alternative Fuels

Flexfuel or flexible-fuel vehicles operate on more than one type of fuel like gasoline, ethanol and methanol blended fuels. These vehicles are engineered to run on any blend ranging from zero to 85% of any of these fuels. Flexfuels help reduce harmful emissions and lower dependency on fossil fuels. Ethanol blends in particular, help lower greenhouse gas emissions and improve air quality. Flexfuels are gaining popularity, especially in regions with thriving agriculture sector where blending of ethanol in fuels helps support local farmers.

The global flexfuel Market is estimated to be valued at US$ 93.57 Bn in 2024 and is expected to exhibit a CAGR of 15% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics

Increasing demand for alternative fuels is expected to drive the global flexfuel market during the forecast period. Rising environmental concerns due to vehicular emissions have prompted governments across regions to implement stringent emission norms. This has increased demand for eco-friendly alternative fuels like ethanol blended gasoline. Brazil for example has made it mandatory to produce cars that can operate on any blend of gasoline and hydrous ethanol up to 100%. Fleet owners and consumers are also switching towards flex fuel vehicles to reduce their carbon footprint. The growing agriculture industry especially in Americas is boosting ethanol production which is encouraging flexfuel adoption. Furthermore, flexfuel infrastructure and technology improvements are making these vehicles more accessible which will further support market growth over the coming years.

Segment Analysis

The global flexfuel market is dominated by the ethanol sub-segment, which holds around 94% share of the overall market. Ethanol offers certain benefits over gasoline such as lower emissions, domestic production which enhances energy security, and higher octane rating. These benefits have led to widespread use of E-85 fuel containing 85% ethanol in flexible fuel vehicles in countries like the US. The remainder of the market is captured by the E-20, E-25 and E-100 sub-segments.

PEST Analysis

Political: Many governments provide subsidies and tax benefits for ethanol production and usage to reduce dependence on imported oil. The US mandates usage of renewable fuels like ethanol in gasoline.

Economic: Ethanol is cheaper to produce than gasoline and offers a sustainable alternative. However, infrastructure upgrade costs to support higher ethanol blends pose challenges.

Social: There is growing awareness about vehicular emissions and sustainability. Flexfuel vehicles enabling use of biofuels are viewed positively.

Technological: Advanced flex fuel engines compatible with high ethanol blends up to E-85 have been developed. Sensors accurately detect ethanol concentration and optimize engine performance.

Key Takeaways

The Global Flexfuel Market Growth is expected to witness high growth over the forecast period assisted by supportive government policies and regulations around the world. The global flexfuel Market is estimated to be valued at US$ 93.57 Bn in 2024 and is expected to exhibit a CAGR of 15% over the forecast period 2023 to 2030.

The North American region currently dominates the market owing to a well-established ethanol industry and flex fuel vehicles compatible with E-85 fuel in countries like the US. The region accounted for over 65% share of the total flexfuel market in 2024 led by the US market.

Key players operating in the flexfuel market are Poet, Bronco Fuel Company, VelociBio, DuPont, and BP. Poet is the largest manufacturer of ethanol in the US with an annual production capacity of over 1.8 billion gallons. It has partnered with major automakers to expand the availability of flexfuel vehicles compatible with high ethanol blends.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it