February 21, 2024
Global Flexfuel Market

The Global Flexfuel Market Driven By Growing Awareness Of Environmental Benefits Is Estimated To Be Valued At US$ 93.57 Bn In 2023

The global flexfuel market has been gaining significant traction in the past decade owing to the growing awareness about the environmental benefits of flexfuel vehicles. Flexfuel, also known as flexible-fuel, allows motor vehicles to operate on more than one type of fuel like gasoline or ethanol. It provides the flexibility to drivers to choose fuel depending on its availability and price. Flexfuel vehicles are typically compatible with gasoline and up to 83% ethanol (E85). The reduced greenhouse gas emissions from vehicles running on E85 flexfuel has driven its use as a viable alternative fuel globally. Additionally, flexfuel vehicles offer improved performance, decreased maintenance costs and reasonable fuel efficiency compared to traditional gasoline vehicles. The global flexfuel market provides ample opportunities for automakers to reduce emissions from the transportation sector in view of rising environmental concerns. The use of bioethanol from maize, sugarcane or cellulosic sources as an automotive fuel also cuts reliance on imported petroleum and creates new revenue streams for agriculture.

The global Flexfuel Market is estimated to be valued at US$ 93.57 Bn in 2023 and is expected to exhibit a CAGR of 15% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

Government policies and initiatives are playing a key role in promoting the adoption of flexfuel vehicles across major markets. Many countries have introduced tax benefits, subsidies and blending mandates to boost the production and consumption of biofuels. For instance, the Brazilian government has mandated a minimum of 27% ethanol blending to increase domestic production and usage. Similarly, the United States has set a target of 36 billion gallons of renewable fuels to be blended in transportation fuel annually by 2022 under the Renewable Fuel Standard. Such supportive regulatory framework is encouraging flexfuel vehicle sales, especially in high growth regions of North America, Latin America and Europe.

Porter’s Analysis

Threat of new entrants: The threat of new entrants entering the global flex fuel market is moderate. The flex fuel engine technology requires heavy investment and entrants will need to have the marketing expertise and customer base to compete with the existing large players.

Bargaining power of buyers: The bargaining power of buyers in the global flex fuel market is high. Buyers have options to switch between flex fuel and conventional fuel vehicles based on fuel price fluctuations.

Bargaining power of suppliers: The bargaining power of suppliers in the global flex fuel market is low. The market has numerous raw material suppliers and technology providers with no single supplier dominating the market.

Threat of new substitutes: The threat of substitutes is moderate as electric vehicles are emerging as an alternative but flex fuel vehicles still have an edge in terms of fuel availability and affordability.

Competitive rivalry: The global flex fuel market is competitive due to the presence of numerous regional and multinational players competing in terms of technology, pricing, and vehicle performance.

Key Takeaways

The Global Flex Fuel Market Demand is expected to witness high growth over the forecast period. The global Flexfuel Market is estimated to be valued at US$ 93.57 Bn in 2023 and is expected to exhibit a CAGR of 15% over the forecast period 2023 to 2030.

The market in North America is expected to dominate due to increasing adoption of flex fuel vehicles and supportive government policies and initiatives around biofuel production and usage in the region. The presence of major automakers focusing on developing flex fuel vehicles along with developed ethanol production infrastructure in countries like the US and Canada is supporting market growth. Asia Pacific is expected to witness fastest growth in the global flex fuel market during the forecast period. The rapidly growing vehicle parc, increasing disposable income, and developing ethanol production capacity especially in countries like India, Indonesia, Thailand are supporting market expansion.

Key players: Key players operating in the flex fuel market are Poet, DuPont, Green Plains Inc., Valero Energy Corporation. Poet is one of the largest producers of ethanol in the world and a leading manufacturer of renewable and low carbon products. The company is investing heavily in expanding its production capacity.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it