Ethanol Market Growth & Trends

The global ethanol market size is projected to reach USD 129.36 billion by 2027 registering a CAGR of 4.8%, according to a new report by Grand View Research, Inc. Increasing demand from fuel and industrial solvents applications is anticipated to remain a key factor favoring market growth.

The advent of second-generation ethanol is expected to bring about a revolution in the industry. The feedstocks used for production are cane trash, rice & wheat straw, corn cobs, cotton stalk, empty fruit bunches, and bagasse. With growing concerns regarding sustainability and tackling organic waste production of second-generation ethanol is expected to gain widespread acceptance. Although a large number of manufacturers have successfully run pilot experiments, there are still concerns surrounding the extraction of useful sugars that are locked in by lignin, cellulose, and hemicellulose in biomass and woody feedstock.

Disinfectants manufactured from ethanol are expected to gain prominence as they form an important component of personal hygiene. The changing consumer behavior and rising health awareness are expected to drive product consumption in this application segment. The growing cases of Hospital-Acquired Infections (HAIs) and rise in surgical procedures are expected to have a positive impact on product demand.

Europe is expected to be one of the major regional markets. The implementation of programs supporting the growth of the biofuels sector is expected to positively impact the eco-system. The European Commission has also started to incentivize farmers to produce feedstock, such as corn, maize, and sugarcane. The adoption of Fuel Quality Derivative aimed at increasing the concentration of ethanol in gasoline will also help augment product demand.

Ethanol Market Report Highlights

  • Second-generation ethanol demand is expected to register the fastest CAGR of 5.9% from 2020 to 2027 due to rising demand from the alcoholic beverages and disinfectant industries
  • Undenatured ethanol was the second-largest segment in 2019 and accounted for a market share of 29.9% owing to growing demand in the manufacturing of fuel additives
  • The beverages application segment is anticipated to witness the maximum CAGR of 5.4% from 2020 to 2027 owing to growing consumption of alcohol-based products
  • The demand for the product in Germany is expected to reach USD 2.05 billion by 2027 backed by changing fuel regulations and steady growth in the consumption of alcoholic beverages