Fuel Ethanol Market

Fuel Ethanol Market Size (2023-2028):

The Global Fuel Ethanol Market size was valued at USD 89.29 billion in 2022 and is projected to reach USD 123.44 billion by 2028, growing at a CAGR of 5.80% during the forecast period 2023 to 2028.

Market Overview:

Market Drivers and Restraints:

Over the next few years, increased demands in the automotive and transportation industries to reduce carbon emissions from gasoline are projected to increase the use of Ethanol as a bio-based additive, which further acts as a primary driver for the global fuel ethanol market growth during 2022 - 2027. Ethanol fuel is the most affordable energy option because it can be produced in almost every country. Corn, sugar cane, and grain are grown in practically every country, making production cost-effective compared to fossil fuels. In addition, fossil fuels can be detrimental to the economies of most countries, particularly emerging countries that lack the resources to explore them. Therefore, it makes sense for these developing economies to focus on manufacturing ethanol fuel to limit their dependence on fossil fuels and save money. The fact that Ethanol does not pollute the environment is one of its most compelling advantages over other fuel sources. For example, when Ethanol is used to power automobiles, the amount of contaminants released into the environment is considerably reduced. In addition, Ethanol is frequently transformed into fuel by combining it with gasoline. Moreover, it helps in reducing global warming. 

Because Ethanol is a biofuel, it is readily available to almost everyone. Energy obtained from plants such as sugarcane, cereals, and corn is referred to as biofuel. Sugarcane may be grown in any tropical climate. Every country grows grain and corn. Corn is an important meal in almost every African country. More sugarcane, corn, and grain plantations will be needed as the usage of ethanol fuel grows. It further means that there will be more ethanol fuel processing factories, which means more job prospects. Ethanol can also be used to make alcoholic beverages, resulting in new job prospects in the hotel industry.

Because ethanol fuel is mainly made from agricultural products, people will be pushed into the underutilized agricultural sector, which will boost a country's economy. This act will ensure the availability of ethanol fuel for many years. In addition, the demand for more corn and grains has sparked a boom in the farming industry, which further increases the global fuel ethanol market demand in the upcoming years.

On the other hand, increasing electric and hybrid vehicle adoption tends to hamper the global fuel ethanol market growth in the next six years. Moreover, ethanol fuel has been linked to engine burns, and corrosion is one of its drawbacks. However, researchers attempt to convert it to hydrogen to make it more productive and elevate it as a formidable alternative fuel source.

Market Recent Developments:

• On 22nd April 2021, Valero Energy Corporation announced its financial results for the first quarter and further added that its ethanol operations were improved and in plans for a carbon capture and storage project associated with its ethanol plants.
• E.I. du Pont de Nemours and Company introduced its first three products for the fuel ethanol market. These are namely SYNERXIA, DISTILLASE, and OPTIMASH. There are developed to speed the fermentation, increase yields, and decrease the consumption of energy and chemicals.

FUEL ETHANOL MARKET REPORT COVERAGE:

Market Segmentation: 

Fuel Ethanol Market - By Product:

• Sugar-based
• Starch-based
• Cellulosic

Based on the product, starch-based is anticipated to dominate the global fuel ethanol market in terms of volume in the next six years. Furthermore, by 2025, it is expected to increase at a CAGR of 5.8 percent. Corn, wheat, barley, and cassava are used in the production of starch-based products. These goods have a high starch content and can help to reduce greenhouse gas (GHG) emissions significantly. 

On the other hand, corn-based is expected to have the highest CAGR in the global fuel ethanol market. The United States Department of Energy study shows that corn-based ethyl alcohol has reduced airborne emissions by approximately 20%. However, due to its high starch content and capacity to create ethyl alcohol with a high octane rating and good anti-knocking qualities, cassava as a suitable feedstock is likely to acquire relevance in developing economies, including China and Thailand the following years.

Moreover, the cellulosic segment is predicted to hold significant growth in the global fuel ethanol market during the foreseen period. Because it is made from biowastes such as wood chips, maize stover, wheatgrass, and fruit peels, this segment is expected to develop the fastest during the projected period.

Fuel Ethanol Market - By Application:

• Flexible fuel vehicles
• Conventional Fuel Vehicles
• Others

The conventional fuel vehicle segment was the industry's most significant application in 2016. This segment is expected to grow at a considerable CAGR of 5.7 percent between 2022 - 2027 in terms of volume. Gasoline with low ethanol mixes, such as E10 and E15, can be used in conventional automobiles. E10 is a composition of 10% ethanol and 90% gasoline, while E15 is a mixture of 10.5 to 15% ethanol. In addition, rising fuel economy regulations for conventional vehicles in nations such as the United States, China, India, and Brazil are likely to raise product use in the future.

The flexible-fuel vehicles (FFVs) segment is expected to increase quickly during the forecast period. These vehicles are primarily powered by internal combustion engines that can run on gasoline and ethanol-gasoline blends higher than E10, such as E85, often known as flex-fuel. E85 is a composition of Ethanol and gasoline that contains between 51 and 83 percent Ethanol.

Market Regional Analysis: 

The Global Fuel Ethanol Market Report includes the segmentation of Regions:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

North America held the most significant part of the entire market volume, accounting for 59.4 percent owing to the presence of a well-established and developed automotive industry and strong limits on particle emissions; this region is projected to be one of the fastest-increasing customers of the product. This scenario is likely to play out in the United States.

Central and South America was the industry's second-largest customer, followed by Europe. In the coming years, the intense production of flexible fuel vehicles in Brazil and Argentina will likely stimulate demand for sugar-based ethanol fuel. Razen S.A., GranBio-API, and B.P. However, biofuels are only a few of the market's major participants.

During 2022 - 2027, Asia Pacific is expected to grow at the fastest rate. Over the next six years, an increase in foreign investment, combined with government policies promoting sustainable development, is likely to stimulate the usage of biofuels. This scenario is expected to play out in China, India, and certain Southeast Asian countries.

Impact of COVID-19 on the Fuel Ethanol Market:

Coronavirus has had an impact on people's social and economic lives all around the world, but developing economies have been hurt the hardest. Movements are restricted, economic operations are halted, and social engagements are limited during a lockdown. Lockdown can include things like closing airports for international and domestic flights, blocking motor parks to prevent inter-city and intra-city mobility, closing schools, marketplaces, and factories, and restricting social activities like weddings, burials, parties, and clubbing. Therefore, because of these factors, the demand for Ethanol has decreased by 50%, which further affects the global fuel ethanol market growth. 

Market Key Players:

1. Valero Energy Corporation
2. Raizen S.A.
3. Green Plains Renewable, Inc.
4. E.I. du Pont de Nemours and Company
5. Wilmar International Ltd.
6. Cargill, Inc.
7. BlueFire Renewables, Inc.
8. Pacific Ethanol, Inc.
9. Flint Hills Resources L.P.
10. Jilin Fuel Ethanol Co., Ltd.