Ethanol is an alcohol produced through the fermentation of sugar by yeast. It is widely used as a biofuel and as an additive to gasoline. Ethanol provides a cleaner alternative to gasoline and helps reduce greenhouse gas emissions. It is produced from agricultural feedstocks such as corn, sugarcane, and cellulosic biomass. The major advantages of ethanol are its renewability, biodegradability, and its ability to lower greenhouse gas emissions. Ethanol is blended with gasoline to increase octane ratings and improve air quality. It is commonly used as a fuel for vehicles, portable stoves, and lighting.
The global Ethanol Market is estimated to be valued at US$ 114.02 Bn 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:
The growing demand for cleaner transportation fuels is a key trend in the global ethanol market. Governments across regions are promoting the use of biofuels including ethanol to reduce dependence on fossil fuels and curb carbon emissions from the transport sector. Ethanol has 25-30% lower greenhouse gas emissions compared to gasoline. Moreover, oil companies are expanding their renewable fuel operations and blending ethanol to meet renewable volume obligations. This is expected to drive the consumption of ethanol during the forecast period. Advancements in cellulosic ethanol production technologies that utilize biomass waste as feedstock can also make ethanol production more sustainable and cost-effective.
Threat of new entrants: The threat of new entrants is moderate as large capital investments are required for ethanol production facilities and distribution networks. Moreover, existing players enjoy economies of scale which make it difficult for new players to enter the market.
Bargaining power of buyers: The bargaining power of buyers is high as there are many established players in the market offering substitutable products. Buyers can exert pressure on prices through competition among existing players.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as key raw materials such as corn and sugarcane are agricultural commodities traded on exchanges where prices fluctuate as per demand-supply dynamics.
Threat of new substitutes: The threat of new substitutes is high as alternative biofuels and fossil fuels pose a threat. Technological advancements can lead to new cheaper substitutes replacing ethanol.
Competitive rivalry: is high due to many global players competing for market share.
The global ethanol market is expected to witness high growth, exhibiting CAGR of 3.9% over the forecast period, due to increasing demand from automotive and energy sectors.
Regional analysis: North America dominates the global ethanol market, accounting for over 45% of the global demand, led by the United States. Brazil and Europe are other major markets for ethanol. China is emerging as a fast growing market in Asia Pacific due to government support for ethanol blending with gasoline.
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. Key players are focusing on capacity expansion and strategic partnership to strengthen their market position.
1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it