Ethanol Market to Reach Valuation of USD 163.9 Bn AT CAGR of 4.9% by 2032

In the coming years, there will be a surge in the demand for ethanol owing to its multiple applications as a solvent, a catalyst for synthesizing various organic compounds, and an additive in automotive fuel.

New York, April 10, 2023 (GLOBE NEWSWIRE) -- According to, The Ethanol market size is projected to surpass around USD 163.9 billion by 2032 from USD 102.8 billion in 2022, and it is poised to reach a registered CAGR of 4.9% from 2023 to 2032. Ethanol is one of the organic compounds that is used most frequently in both industrial and consumer goods. The primary industrial uses of this aliphatic alcohol include as a solvent and as a step in the production of other chemicals. Ethanol is used in the production of medicines, polymers, lacquers, polishes, plasticizers, and cosmetics. Ethanol is employed in treatment as a topical anti-infective as well as an antidote for methanol or ethylene glycol overdose. Commercial goods that include ethanol include drinks, colognes, mouthwashes, liniments, perfumes, aftershaves, and various rubbing alcohols.

ethanol market

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Key Takeaway:

  • By type, the bioethanol segment dominated the global ethanol market in 2022.
  • By source type, the grain-based segment dominated the market over the past years holding the most considerable share value.
  • By purity, denatured ethanol is predicted to be the fastest-growing segment at a CAGR of 3.9%.
  • By application, the fuel and fuel additives accounted for holding the largest market share in 2022.
  • In 2022, North America dominated the market with the highest revenue share of 40%.
  • Asia-Pacific is expected to witness the fastest CAGR from 2020 to 2027.

The growing usage of ethanol as a biofuel will increase demand for the substance. Another essential aspect fueling the market's expansion is rising alcoholic beverage consumption. Ethanol is produced by petrochemical and natural feedstocks. Natural processes involve the fermentation of natural sugars with the help of yeast. Production of ethylene is rising as a result of increased shale gas output. This market is predicted to become oversupplied with ethylene as oil production drops and new ethylene capacity comes online, which would cause a decline in ethanol production.

Factors affecting the growth of the Ethanol industry?

  • There are several factors that can affect the growth of the Ethanol industry. Some of these factors include:
  • The growing use of ethanol as a biofuel: As ethanol replaces methyl t-butyl ether (MTBE) as an oxygenate addition for regular gasoline, demand for ethanol is rising.
  • Increasing alcoholic beverage consumption: Increasing alcoholic beverage consumption is a significant element fostering industry expansion.
  • The growing use of alcohol-based hand sanitizers: The abrupt emergence of the COVID-19 pandemic has increased the use of alcohol-based hand sanitizers, which has dramatically raised the demand for ethanol.
  • Increasing use of ethanol as an industrial solvent: The demand for ethanol will increase over the future years due to its usage as a solvent, a catalyst for the synthesis of other organic compounds, and an additive in fuel for automobiles.

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Top Trends in Global Ethanol Market

Alcohol-based beverages are frequently made using ethanol, and rising alcohol use is what's fueling business growth. Each person above the age of 15 consumed around 6.4 erliters of alcohol globally in 2016. The desire for handcrafted beer among millennials is growing, driving the market's expansion. Craft beer sales in the United States increased by 4% in volume in 2018 and represented around 13.2% of the nation's total beer market, according to the Brewers Association.

Market Growth

The ethanol market is expected to expand more quickly due to its widespread use. The fuel and additive sectors are the primary consumers of ethanol due to its flammability and effective burning as a fuel. Due to its growing use as a solvent in the production of numerous chemicals,  ethanol demand is expected to rise during the projection period. The need for disinfectants and the population's increased awareness of health risks will drive up the price of ethanol in the coming years.

Regional Analysis

The United States is the country that produces the most ethanol. The reason for these markets' expansion is the availability of ethanol and raw materials required for manufacture. Due to multiple big ethanol producers, the market in South America will grow dramatically over the coming years in addition to North America.

The Asia-Pacific area is expected to experience the fastest CAGR between 2023 and 2032 due to increased fuel consumption and expanding industrial activity. It is projected that the existence of various industries, together with the region's economy's ongoing expansion, will positively impact market growth. The market is expected to be dominated by two application categories: fuels and industrial solvents.

South America is one of the biggest regional marketplaces due to the abundant supply of raw materials and the rising demand for goods made by the automobile industry. Expanding environmental regulations in this area is anticipated to enhance ethanol uptake in end-use industries.

Brazil is the top consumer of alcoholic beverages in South America. It is one of the first countries to experiment with ethanol and gasoline blending. Many automakers in the country have made improvements to reflect the changes. The government is raising taxes on imported ethanol, which is anticipated to impact the expansion of the local market positively.

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Scope of the Report

Report AttributeDetails
Market Value (2022)USD 102.8 billion
Market Size (2032)USD 163.9 Billion
CAGR (from 2022 to 2032)4.9%
North America Revenue Share40%
Historic Period2016 to 2022
Base Year2022
Forecast Year2023 to 2032

 Market Drivers

One of the major factors driving the industry is the use of ethanol as a biofuel. The automotive sector has expanded quickly in recent years, but it still has a lot of work to do to reduce air pollution. Ethanol is combined with gasoline at concentrations of 10% and 15% to help tackle the issue of rising air pollution from automobiles. The addition of ethanol has a significant impact on fuel economy and thermal efficiency and assists with cold starts in the winter. The use of ethanol as a biofuel is most common in the US and Brazil.

Alcoholic drinks containing ethanol, once seen as a luxury good, are now a standard fixture in most houses worldwide. Introducing premium products to the market is the primary trend fueling expansion. The demand for premium goods has increased rising disposable income and improved knowledge of raw materials. Sales of premium liquor have climbed by 5% to 6% during the last two years.

Market Restraints

The rise in raw material prices, which would probably have a negative impact on market expansion, is one of the primary barriers to the growth of the global ethanol market. The effect of this restriction is anticipated to be moderate during the projected timeframe due to the variability in raw material output. Furthermore, it is insulting to limit the supply chain while restricting imports.

The liver, which purges toxins from the blood, is particularly vulnerable to damage from excessive alcohol consumption. Long-term alcohol drinkers are more prone to develop chronic liver disease, sometimes known as cirrhosis of the liver. By raising awareness of these adverse effects, ethanol sales could decline, so limiting market expansion.

Market Opportunities

Following the COVID-19 outbreak, the demand for hand sanitizers and disinfectants has increased dramatically. As a result, the demand from pharmaceutical industries increases to produce alcohol-based products.

The demand for the development of alcohol-based products will rise due to the growing use of ethanol in hospitals, the use of ethanol as an industrial solvent, the increasing popularity of alcohol-based sanitizers and cleansers, and the growing consumption of alcoholic drinks, which will propel the expansion of the ethanol market.

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Report Segmentation of the Ethanol Market

Product Type Insight

Ethanol can be classified as synthetic and bioethanol according to type analysis. A product made from petroleum is synthetic ethanol. The bioethanol category dominates the market. When ethane, a petroleum by-product, is hydrated with steam and a catalyst like phosphoric acid, synthetic ethanol is created.

Bioethanol is an environmentally beneficial substance that is produced from biomass through the fermentation and hydrolysis of sugar. Since bioethanol is made entirely of biological importance, when it is burned, fewer harmful emissions, including steam, heat, and carbon dioxide, are produced. Bioethanol replaces petroleum-based products. As a result, gasoline blended with bioethanol is typically recommended in many nations. In addition, bioethanol is utilized in the energy, chemical, and automotive industries. These factors are the key factors upsurging the growth of the bioethanol segment.

Source Type Insight

The use of grain-based raw materials to produce more ethyl alcohol is one of the key factors projected to drive market expansion. Dry milling is the primary method used to make grain-based ethanol, and one bushel of maize may produce 2.86 gallons of alcohol. Throughout the projection period, the sugar and molasses-based sauces category is anticipated to grow at a significant CAGR. The market share of sugar- and molasses-based ethanol will rise in the near future as a result of increased sugar uptake and molasses-based ethanol's use as industrial solvents.

Purity Insight

The ethanol market is divided into Denatured and Undenatured based on purity. The segment with the fastest expected growth is denatured ethanol, with a CAGR of 3.9% from 2023 to 2032. This is a result of rising demand from the petroleum and household chemical sectors. This can be mixed with other compounds. It is mainly utilized in cleaning and disinfecting solutions for both indoor and outdoor spaces.

Denatured alcohol is suitable for use at home because it is primarily made from natural materials like cornstarch and cereals. Growing awareness of personal cleanliness and the negative impacts of synthetic substances are other significant growth factors. Undenatured ethanol is a 95% strength product that doesn't have any additions or solvents. It is mainly used for fuel mixing and other industrial and research-related purposes. Detergents, adhesives, polymers, chemicals, paints, inks, and thinners are just a few examples of the things used in industry.

Application Insight

Drinks, Fuel, and Fuel Additives are the market segments based on Application type. The fuel and fuel additives section held the largest market share out of all the details. Since it is used to create gasoline additives that increase fuel economy, the product's demand has increased as a result of rising demand for vehicle fuels and regulatory improvements aimed at reducing air pollution.

Industrial solvents are one of the applications that are growing as a result of their pervasive usage in significant end-use industries. The pharmaceutical, paint, and coatings industries' rising demand is anticipated to have a favorable effect on total orders. Future application segment growth will be significantly influenced by macroeconomic factors, including governmental regulations and policies.

Ethanol is a key component utilized in the personal care business. It has an astringent quality and is mainly used in lotions and hand sanitizer formulas. Because of its superior physical attributes and low boiling point, it is a crucial element in the personal care sector.

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Market Segmentation

Based on Type

Based on the Source Type

  • Second Generation
  • Grain-based
  • Sugar & Molasses based

Based on Purity

  • Denatured
  • Undenatured

Based on Application

  • Beverages
  • Fuel and Fuel Additives
  • Others Applications (industrial solvents, disinfectants, personal car

By Geography

  • North America
    • The US
    • Canada
    • Mexico
  • Western Europe
    • Germany
    • France
    • The UK
    • Spain
    • Italy
    • Portugal
    • Ireland
    • Austria
    • Switzerland
    • Benelux
    • Nordic
    • Rest of Western Europe
  • Eastern Europe
    • Russia
    • Poland
    • The Czech Republic
    • Greece
    • Rest of Eastern Europe
  • APAC
    • China
    • Japan
    • South Korea
    • India
    • Australia & New Zealand
    • Indonesia
    • Malaysia
    • Philippines
    • Singapore
    • Thailand
    • Vietnam
    • Rest of APAC
  • Latin America
    • Brazil
    • Colombia
    • Chile
    • Argentina
    • Costa Rica
    • Rest of Latin America
  • Middle East & Africa
    • Algeria
    • Egypt
    • Israel
    • Kuwait
    • Nigeria
    • Saudi Arabia
    • South Africa
    • Turkey
    • United Arab Emirates
    • Rest of MEA

Competitive Landscape

The competitive landscape of the market has also been examined in this report. Some major players include

  • United Breweries
  • Aventine Renewable Energy
  • AB Miller
  • Archer Daniels Midland Company
  • Kirin
  • Pure Energy Inc.
  • British Petroleum
  • Cargill Corporation
  • Other Key Players

Recent Development of the Ethanol Market

  • The first greenfield ethanol plant using grain was established in India in 2022. It was constructed using cutting-edge technologies and won't release any garbage. As a result, it is entirely environmentally friendly and a plant with no liquid discharge.
  • Wolf Carbon Solutions and Archer Daniels Midland announced a partnership in 2022 to accelerate the decarbonization of ethanol production.

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