Global market for ethanol is forecast to grow at a high rate driven by the sustained increase in demand from biofuel and food & beverage industries.
The growing consumer awareness about eco-friendly products and supportive government policies are driving growth in the ethanol market. Ethanol use in industries such as automotive, chemicals, food & beverages, personal care & cosmetics, and pharmaceuticals continues to grow.
The focus on technology advancements and development of low cost feedstock is also favoring growth. Amid the COVID-19 crisis, the global market for Ethanol is projected to reach US$100.3 Billion by 2024, registering a compounded annual growth rate (CAGR) of 6.2% over the analysis period.
The United States represents the largest regional market for ethanol, accounting for an estimated 45.1% share of the global total. The market is projected to reach US$45.3 Billion by close of the analysis period. China is expected to spearhead growth and emerge as the fastest growing regional market with a CAGR of 8.9% over the analysis period.
A major factor fueling growth in ethanol market is the rising prominence of ethanol as a fuel or fuel additive in the automotive industry. Ethanol fuel offers advantages due to the low carbon monoxide products compared to gasoline-powered engines.
The addition of ethanol to fuel is also being propelled by its ability to burn much cleaner than pure gas, thus facilitating in reducing carbon footprint. Ethanol is widely used in the production of alcoholic beverages such as cider, beer, ale, and wine. Ethanol is also used as a natural production for extracting and concentrating flavors and aromas in non-alcoholic beverages.
Skyrocketing crude prices and increasing concern of greenhouse gases are expected to boost the demand for ethanol both in the developed and developing countries over the next several years. Additionally, a ban on MTBE in several countries including the U.S. is another boon for the ethanol market. Demand for ethanol is also growing from food processing industry in the U.S.
The high consumption of processed, packaged and frozen foods and high consumption of alcoholic beverages is driving demand for ethanol. With rising environmental concerns and depletion of fossil fuel sources affecting fuel supplies, the regional governments in countries such as China, India, Vietnam and Thailand are promoting the use of alternatives such as fuel ethanol.
