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The Global Bioethanol Market size is estimated to increase by USD 66.96 billion, growing at a CAGR of 11.69% between 2022 and 2027.
The market's growth is dependent upon various factors, notably the increasing demand for a consistent supply of clean fuel, concerns regarding atmosphere and energy security, and supportive government policies. These elements collectively shape the trajectory of the market, fostering innovation, investment, and adoption of sustainable energy solutions. As the global focus intensifies on mitigating environmental impact and ensuring energy reliability, stakeholders are spurred to invest in technologies and practices that promote cleaner, more secure energy sources. Such dynamics drive market expansion, positioning it for continued growth and development in the evolving energy landscape.
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The market is experiencing significant growth as a sustainable alternative to traditional fuels, driven by concerns over global warming and greenhouse gas emissions. Derived from renewable sources such as sugarcane, maize, and switch grass, bioethanol offers a low-carbon footprint and reduces dependency on fossil fuels, enhancing energy security. With its high octane value and antiknock characteristics, bioethanol serves as an effective fuel additive, improving the performance of transportation fuels while decreasing emissions. Its production involves sugar fermentation of feedstocks like sugar cane molasses and beet, with algae emerging as a promising feedstock due to its biodegradability and homogeneity. As the chemical market continues to evolve, bioethanol's low viscosity and anti-corrosiveness make it a preferred choice for industrial applications, driving further adoption and market expansion amidst the rise of electric vehicles (EVs) and increasing blending mandates.
The market share growth by the starch segment will be significant during the forecast period. The starch segment showed a gradual increase in market share from USD 25.86 billion in 2017 and continued to grow by 2021. The starch segment accounted for a significant market share in 2020, and it is likely to retain its position through the forecast period. The growth of the starch segment is attributed to the increasing demand from APAC and North America and the availability of a wide variety of starch-based crops globally. Corn is considered to have the highest starch content, approximately 70%-73%. In North America, starch-based crops, especially corn, are the most preferred feedstock in production.
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Starch-based bioethanol uses grains such as wheat, barley, corn, and rye and starch-containing raw materials such as tapioca, cassava, and potato as feedstocks to produce this chemical. The hydrolysis of starch produces glucose, and the fermentation of glucose produces bioethanol. Starch is a polymeric carbohydrate and requires hydrolysis to break down the chemical bonds between monomer units and to produce simple sugars such as glucose. The fermentation of glucose produces bioethanol and carbon dioxide as an end-product.
Bioethanol is consumed as a fuel and fuel additive by the transportation and automotive industry. The demand for transportation fuel is expected to increase due to the decrease in fossil fuel reserves and an increase in the number of automobiles. This element accounts for a key element for transportation in government policies of various countries globally. For instance, in December 2021, Nitin Gadkari, Union Road Transport and Highways Minister of India, stressed the use of ethanol in the transport sector. Additionally, it is used as a feedstock for the production of ethyl tert-butyl ether (ETBE), which is a blending component in gasoline and has a non-hygroscopic property. Also, this product, when mixed with emulsifiers, is used as a fuel for modified diesel engines. This is generally used for greenhouse gas savings in heavy vehicles and buses in metropolis cities. Thus, owing to such factors, the transportation segment of the global bioethanol market will grow during the forecast period.
North America is projected to contribute 33% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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North America led the global market, and it is likely to sustain its position over the forecast period. The US government supports the producers of feedstock and bioethanol and related R&D activities by providing special category grants, loans, and funds, which has led to advancements in technology and processes and an increase in the quality and yield over the years. The Canadian government is promoting the use of biofuels to encourage the reduction of carbon emissions from vehicles. The country is focusing on the expansion of biofuel manufacturing plants, which is expected to increase the demand for biofuels like bioethanol during the forecast period.
The rapid expansion driven by a confluence of factors including concerns over climate change and global warming. Derived from diverse sources such as agricultural & forest residues, energy crops, and crop residues, bioethanol serves as a vital renewable energy resource, reducing reliance on conventional fuel sources and mitigating greenhouse gas emissions. Its high octane value and antiknock characteristics make it an ideal fuel additive, meeting blending mandates set by regulatory bodies like the EPA. Through chemical processes like distillation and dehydration, raw materials such as sugar cane molasses and maize are transformed into bioethanol, ensuring physical stability and homogeneity. As demand grows across industrial and power generation sectors, the market capitalizes on raw material availability and advancements in biodegradable and anti-corrosive technologies, positioning bioethanol as a sustainable solution for transportation and medical applications alike.
Favorable government policies are notably driving the market growth. The growing environmental and energy security concerns have compelled governments to intervene and impose legislative and regulatory actions on the compulsory blending of biofuels. The demand for transportation fuel is expected to increase due to the decrease in fossil fuel reserves and an increase in the number of automobiles. This is likely to drive the demand.
Certain countries have set targets for the use of biofuels as a pure mix or as blends. The governments of countries like Germany and India are regulating the use of ethanol in their public transport system. Governments offer incentives, grants, special loans, and tax credits to meet the set targets. For example, the US government provides loan guarantees of up to USD 250 million under the biorefinery assistance program for the construction and retrofitting of commercial-scale biorefineries that produce bioethanol. Such government initiatives and benefits drive production and consumption worldwide.
Increased preference for biofuels over conventional fuels is the primary trend driving the market growth. It is also known as grain alcohol. It exhibits physical and chemical properties similar to that of conventional fuel. Moreover, it has the potential to replace conventional transportation fuels. The benefits associated with biofuels are:
The fluctuation in the prices of crude oil may impede the market growth. Crude oil products such as diesel and gasoline are the primary substitutes for bioethanol. The unexpected changes in the prices of crude oil have led to a steep decrease in oil trading prices. The decline in oil prices is attributed to a systemic demand-supply imbalance in the global crude oil market, which has affected the demand for bioethanol and other alternative renewable fuels. The low prices of crude oil have widened the price gap between conventional fuels and biofuels.
Governments subsidize renewable biofuels to attract investments. When crude oil prices continue to decline, governments must increase subsidies to increase the popularity of biofuels. This will require additional funding from the governments, and any failure to do so will affect the sales of biofuels and the growth of the global market.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Green Plains Inc. - The company's key offerings include biofuels such as bioethanol and octane fuel.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market utilizes biomass sources like sugarcane to produce fuel, aiming to reduce greenhouse gas emissions and reliance on non-renewable fossil fuels, particularly with the rise of EVs (electric vehicles). Beyond fuel, bioethanol is used in pharmaceutical drugs for solubility enhancement and drug delivery systems. However, concerns persist over its adverse environmental impact, including land use change, deforestation, biodiversity loss, and habitat destruction. The industry increasingly adopts sustainable practices to mitigate these issues while meeting energy and pharmaceutical needs.
The environmental regulations set by the EPA and the need for sustainable alternatives in food & beverages and other industries. Key feedstocks like starch crops, sugarcane bagasse, switchgrass, and miscanthus are utilized in the chemical process to produce bioethanol, alongside agricultural & forest residues, algae, and wasted crops. These feedstocks contribute to the market's viability as a biodegradable and renewable energy source, reducing carbon dioxide emissions and reliance on traditional fuels. While bioethanol exhibits anti-corrosiveness and antiknock characteristics, challenges like weak lubricity persist, driving ongoing research and innovation to enhance its performance and market penetration amidst blending mandates.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest market growth and trends and growth opportunities from 2017 to 2027. The market has been segmented by type, product, distribution channel, and region.
Market Scope |
|
Report Coverage |
Details |
Page number |
176 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.69% |
Market growth 2023-2027 |
USD 66.96 billion |
Market structure |
Fragmented |
YoY growth (%) |
9.75 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 33% |
Key countries |
US, Canada, China, Japan, India, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Abengoa SA, Aemetis Inc., ALTO INGREDIENTS INC., Archer Daniels Midland Co., BP Plc, Cristal Union Group, DuPont de Nemours Inc., Green Plains Inc., Honeywell International Inc., Pannonia Bio Zrt., POET LLC, Praj Industries Ltd., SEKAB Biofuels and Chemicals AB, Shell plc, SZVG eG, Tereos Group, The Andersons Inc., United Petroleum Pty Ltd., and Valero Energy Corp. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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