Bioethanol is a type of alcohol made by fermenting the sugar components of plant materials such as grains, sugarcane, or inedible parts of plants. It is most commonly used as a biofuel for vehicles in the form of E5–E85 gasoline blends and as an alternative fuel in cars that can operate on neat (100%) ethanol. The main feedstocks used for bioethanol production include corn, sugarcane, wheat, or their by-products such as wheat straw. Bioethanol is also used as a fuel additive to increase octane and enhance gasoline’s performance in spark-ignition engines.
The global bioethanol market is estimated to be valued at US$ 83.4 Bn in 2023 and is expected to exhibit a CAGR of 5.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights. The global bioethanol market is expected to flourish by increasing demand for biofuel blending with gasoline.
Market Dynamics
Increasing Demand for Biofuel Blending: One of the major drivers fueling the growth of the bioethanol market size is the increasing blending mandates for bioethanol in gasoline across various countries globally. Many countries have mandated blending of bioethanol ranging between 5%-25% with gasoline due to its environmental benefits such as reduction in greenhouse gas emissions as compared to fossil fuels. This is increasing the demand for bioethanol from oil marketing companies and refineries for blending purposes.
Government Support for Biofuel Production and Consumption: Various governments across the globe are providing subsidies, tax benefits, and incentives to encourage the production and consumption of biofuels such as bioethanol. This is positively impacting the bioethanol market. For instance, the US government provides subsidies for domestic production of biofuels under the Renewable Fuel Standard program. The European Union also aims to achieve a binding target of 14% renewables in the final energy consumption by 2030. Such initiatives by governments are expected to drive market growth over the forecast period.
Segment Analysis
The bioethanol market is dominated by the transportation fuel segment. Over 90% of bioethanol produced globally is used for blending with gasoline to make biofuel for vehicles. This segment is expected to remain dominating during the forecast period owing to the stringent regulations and policies across various regions pushing for higher blending targets. Other segments such as industrial chemicals and beverages are niche but growing steadily.
PEST Analysis
Political: Many countries have introduced policies promoting the use of biofuels blended with petroleum to reduce dependence on crude oil imports and lower carbon emissions. Some nations have blending mandates of 10-15% of ethanol with gasoline.
Economic: Agro-industries producing bioethanol offer income opportunities for farmers. It can reduce trade deficits by substituting fuel imports. However, investments in technologies and facilities are substantial.
Social: Using biomass for fuel instead of food/feed has opposition from some groups. Advanced technologies address such concerns by utilizing non-edible feedstocks. Job opportunities are boosting rural economies.
Technological: Second-generation technologies focus on cellulosic bioethanol which utilizes agricultural/forestry residues and waste. These avoid competition with food and deliver better environmental performance compared to first-generation corn/sugarcane based systems.
Key Takeaways
The global bioethanol market is expected to witness high growth.
Regional analysis: The Asia Pacific region currently dominates the bioethanol market owing to large production capacities in countries such as China and India. North America is another major market led by the US. Brazil and Europe also have sizable markets.
Key players related content comprises Key players operating in the bioethanol market are Adeka Corporation, Baerlocher GmbH, Chemson Polymer Additive AG, Galata Chemicals, Jiangsu Uniwel Chemistry Co. Ltd, KD Chem Co. Ltd, Pau Tai Industrial Corporation, PMC Group Inc., PT TIMAH Tbk, Reagens SpA, Shital Industries Pvt Ltd, SONGWON, Sun Ace Kakoh (Pte) Ltd, Valtris Specialty Chemicals, and Vikas Ecotech Ltd.
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