by Bioethanol is an alcohol made by fermenting the sugar components of plants such as corn, sugarcane or wheat. It is most commonly used as a biofuel and a gasoline additive to increase octane and improve vehicle emissions. As an octane booster and oxygenate, it is blended with gasoline at concentrations of up to 10% (E10) for conventional vehicle engines and up to 85% (E85) for flex-fuel engines. The global bioethanol market is also driven by growing demand for eco-friendly transportation fuels to reduce dependence on crude oil and cut down carbon emissions. Bioethanol as a fuel emits lesser greenhouse gases as the carbon dioxide released during its combustion is re-absorbed by new plant growth.
The global bioethanol market is estimated to be valued at US$ 13.7 billion in 2024 and is expected to exhibit a CAGR of 9.8% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The growing demand for eco-friendly fuels is a major driver propelling the bioethanol market growth. Many governments across regions like Europe and North America are promoting the use of biofuels including bioethanol through tax incentives and supportive policies to reduce vehicular emissions. This is expected to boost the sales and production of bioethanol over the next few years. Additionally, with depleting crude oil reserves and volatility in oil prices, many fuel retailers and automakers are keen on expanding their cellulosic bioethanol portfolios to diversify their fuel sources. Continued research on advanced bioethanol production technologies from agricultural waste is further expected to encourage bioethanol consumption during the forecast period.
Segment Analysis
The global bioethanol market is dominated by the transportation fuel segment which holds around 90% share of the overall market. Bioethanol is predominantly used as a transportation fuel which is blended with gasoline. It provides benefits like reduced greenhouse gas emissions and does not require modifications in vehicle engines to be used. With stringent regulations and policies promoting the usage of renewable fuels, the demand for bioethanol as a transportation fuel is expected to rise significantly over the forecast period.
PEST Analysis
- Political: Governments across major regions have implemented supportive policies and regulations to promote the production and usage of bioethanol. Subsidies and tax incentives are provided to bioethanol producers. Mandates are in place requiring oil companies to blend bioethanol with gasoline in certain percentages.
- Economic: Bioethanol provides opportunities for agricultural development and rural employment generation. It is a more cost-effective alternative to fossil fuels. Fluctuations in feedstock prices and crude oil prices affect the price competitiveness of bioethanol.
- Social: Use of bioethanol helps reduce dependence on fossil fuels and curbs environmental pollution. However, there are concerns that increased demand for agricultural commodities could raise global food prices.
- Technological: Advances are being made in dry and wet milling technologies to improve ethanol yields. Second generation technologies are being developed to produce bioethanol from non-food biomass sources like lignocellulosic materials and agricultural residues.
Key Takeaways
The global bioethanol market is expected to witness high growth over the forecast period owing to supportive government policies and regulations promoting the usage of renewable fuels. The transportation fuel segment dominates the market and demand is expected to rise with increasing blending mandates. The global bioethanol market is estimated to be valued at US$ 13.7 billion in 2024 and is expected to exhibit a CAGR of 9.8% over the forecast period 2024 to 2031.
Regional analysis: North America holds the largest share currently mainly due to the USA being the largest producer and consumer of bioethanol globally. Stringent blending mandates and presence of key producers are driving the North American market. The Asia Pacific region is expected to witness the fastest growth on account of rapidly growing blending mandates and production capacities in countries like China, India and Indonesia.
Key players operating in the bioethanol market are CropEnergies, British Sugar, New Generation Biofuels Holdings, Inc., Vivergo Fuels Limited, Butalco GmbH, and Global Green SA. Key players are focusing on capacity expansions and developing technologies to produce bioethanol from agricultural residues and cellulosic feedstocks.
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