by The global flexfuel market has witnessed significant growth in recent years owing to its multiple advantages over conventional gasoline. Flexfuel, which is a blend of gasoline and ethanol, results in improved engine performance, reduced harmful emissions, and higher fuel efficiency. It allows vehicles to operate on either pure gasoline or E85 fuel with up to 85% denatured ethanol. With growing environmental concerns and rising crude oil prices, several countries are promoting the use of renewable fuels like ethanol to reduce carbon footprint. E85 fuel emits lesser greenhouse gases as ethanol is plant-based and renewable. It also helps farmers by creating more opportunities for agricultural products.
The global flexfuel market is estimated to be valued at US$ 126.7 billion in 2023 and is expected to exhibit a CAGR of 15% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the flexfuel market is the increasing production and availability of ethanol fuel. To curb vehicle emissions and diversify fuel sources, many nations are incentivizing greater blending of ethanol in gasoline. As per RFA, global ethanol production grew by 5% in 2021 to reach 113.3 billion liters. The U.S leads ethanol production with 58.5 billion liters annually. Brazil continues to be the second largest producer with 33 billion liters while China’s output is expanding strongly. Automakers are also launching more flex-fuel compatible vehicles to sync with rising biofuel supplies. This is facilitating higher penetration of E85 across regions which augurs well for the flexfuel industry.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the global flexfuel market is low owing to the high capital requirements and established presence of existing players.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of alternatives and fluctuation in demand.
Bargaining power of suppliers: Suppliers have low to moderate bargaining power since raw materials can be sourced easily.
Threat of new substitutes: Substitute threat is low as flexfuel vehicles are unique in their ability to operate on different ratios of gasoline and ethanol without any modifications.
Competitive rivalry: The competition in the market is high among key players operating globally.
Key Takeaways
The Global Flexfuel Market Demand is expected to witness high growth over the forecast period. Factors such as supportive government policies promoting ethanol blending as well as growing flex-fuel vehicles production are expected to propel the market growth.
Regional analysis – North America dominated the market in 2020 and is expected to continue its dominance over the forecast period. This is attributed to consistent efforts by governments to promote biofuel production and usage of flexfuel vehicles in the region.
Key players – Key players operating in the flexfuel market are General Motors, Ford, Volkswagen, Fiat, Nissan, Kia, and Mitsubishi. These players are focusing on strategic collaborations to expand their product offerings and geographic reach. For instance, in 2021, Nissan partnered with bioethanol producer GranBio to boost ethanol use in Brazil.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
