Ethanol Biofuel Market Size - By Feedstock (Coarse Grain, Sugar Crop, Vegetable Oil), Application (Transportation, Aviation), & Forecast, 2024 - 2032

Ethanol Biofuel Market Size

Ethanol Biofuel Market was valued at USD 115.8 billion in 2023 and is estimated to register over 7.1% CAGR from 2024 to 2032, propelled by the increased desire for environmentally friendly fuels in road transportation. Heightened awareness regarding the utilization of renewable energy and a growing emphasis on reducing greenhouse gas emissions contribute significantly to this trend. Governments are playing an active role by seeking alternatives to traditional fuels to combat rising emissions. Investment plans to develop biofuels as a major energy source further positively impact the industry, reflecting a collective effort towards more sustainable and eco-friendly fuel solutions.
 

The market is set to benefit from an expansion in feedstock diversity and a surge in initiatives promoting advanced biofuels. Increasing industry shift involves incorporating a broader array of feedstocks beyond traditional sources like corn and sugarcane. Non-food feedstocks such as algae, waste cooking oil, and agricultural residues are gaining prominence, reducing competition with food crops and enhancing sustainability. In addition, growing emphasis on advanced biofuels like cellulosic ethanol and renewable diesel is gaining traction owing to their higher energy efficiency and reduced greenhouse gas emissions compared to first-generation biofuels, signaling a positive trajectory in the industry.

The increasing focus from both consumers and regulatory bodies on sustainability and carbon reduction is fueling a heightened demand for ethanol biofuels with certified sustainability credentials. Certifications such as RSB (Roundtable on Sustainable Biomaterials) and ISCC (International Sustainability & Carbon Certification) have gained significant importance, contributing to the ethanol biofuel market growth. Additionally, ongoing research and development initiatives are driving advancements in more efficient and cost-effective biofuel production processes. Innovations in enzyme technology and biorefinery methodologies are playing a key role in improving yields and reducing production costs within the industry.
 

Government policies and incentives play a pivotal role in shaping the dynamics of the ethanol biofuels market. Across diverse countries, mandates and subsidies have been instrumental in fostering the adoption and production of biofuels, contributing significantly to the overall growth of the market. Furthermore, the biofuels industry is increasingly influenced by the dynamics of international trade. Global exports and imports of biofuels, often guided by market demand and trade agreements, have notable impacts on the worldwide biofuels market.
 

COVID- 19 Impact

The COVID-19 pandemic had a substantial impact on the ethanol biofuel market, primarily driven by reduced demand for transportation fuels as lockdowns and travel restrictions curtailed economic activity. Despite these short-term challenges, the pandemic underscored the importance of sustainability, potentially encouraging investments in biofuels as part of a green recovery strategy.
 

Ethanol Biofuel Market Trends

The global ethanol biofuel industry is expected to witness substantial growth, driven by the increased focus on advanced ethanol technologies, such as cellulosic ethanol production along with growing interest in sustainable and low-carbon ethanol production methods. Government initiatives and policies promoting ethanol as an alternative fuel source are influencing market dynamics.
 

Technological advancements in the biofuel sector have led to substantial cost reductions, positioning it as a compelling alternative to fossil fuels. The introduction of innovative feedstock sources for biofuel production is expected to drive industry growth in the foreseeable future. Moreover, the increasing focus on the circular economy and waste-to-energy approaches is fostering the utilization of biofuels derived from organic waste materials, thereby enhancing the overall business landscape.
 

Ethanol Biofuel Market Analysis

The sugar crop feedstock is set to grow at a CAGR of over 7.3% through 2032. Increasing technological advancements have enabled the production of ethanol from a wider range of feedstocks, including non-food sources and waste materials. This includes the use of agricultural residues, algae, and organic waste, contributing to the development of more sustainable and diverse feedstocks for ethanol biofuel production, thereby contributing to the overall market growth.
 

Research and development endeavors are concentrated on the creation of advanced biofuels, such as renewable diesel and renewable jet fuel, derived from vegetable oils. These advanced biofuels present superior energy efficiency and diminished greenhouse gas emissions when juxtaposed with first-generation biofuels. This focus on innovation in biofuel technology aims to provide more sustainable and environmentally friendly alternatives to traditional fuels, contributing to the broader goal of mitigating the environmental impact of transportation and industrial activities. The advancements in producing biofuels from vegetable oils underscore the industry's commitment to enhancing overall efficiency and reducing its carbon footprint.
 

Transportation application industry is projected to witness about 7.4% CAGR from 2024 to 2032. The ethanol biofuel industry for transportation application is witnessing a shift owing to increasing adoption of higher ethanol blends, such as E15 (15% ethanol and 85% gasoline) and E85 (flex-fuel, containing up to 85% ethanol). These blends are gaining traction in various regions as a means to reduce greenhouse gas emissions and enhance the overall environmental profile of the transportation sector. Moreover, government policies and initiatives promoting ethanol blending mandates are further driving the trend toward increased ethanol use in the transportation sector.
 

• Growing emphasis on the production of advanced ethanol technologies, including cellulosic ethanol that involves utilizing non-food feedstocks such as agricultural residues, waste materials, and dedicated energy crops to produce ethanol is further adding to the market growth.
   
• The diversification in feedstocks aims to reduce the reliance on traditional sources like corn and sugarcane, promoting sustainability in the biofuel supply chain. As the transportation sector continues to grapple with the need for cleaner fuels, these trends signal a promising future for ethanol biofuels in meeting the evolving demands of the global transportation industry.
   

North America ethanol biofuel market is likely to showcase around 7% CAGR through 2032. The U.S. Environmental Protection Agency (EPA) maintained the enforcement of the Renewable Fuel Standard (RFS), requiring the integration of biofuels, particularly ethanol based into the country's transportation fuel distribution. The RFS outlined precise benchmarks for advanced biofuels, creating a stimulus for increased production. In addition, governmental policies and incentives, both at the federal and state levels, persistently endorsed the utilization of biofuels. These measures encompassed tax credits and renewable energy standards, strategically designed to incentivize and propel the widespread adoption and production of biofuels in the nation.
 

• Biodiesel, with a particular emphasis on renewable diesel, experienced a surge in both production and consumption. Renewable diesel, sourced from feedstocks such as vegetable oils and animal fats, gained significant traction owing to its diminished carbon footprint.
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• The transportation sector increased its focus on sustainability, placing importance on responsibly sourcing feedstocks and mitigating the environmental footprint associated with ethanol biofuel production, thereby swaying the application industry growth.
   
• North America's biofuel industry sought opportunities in emerging markets and industries like aviation and marine transportation, where biofuels are being explored as a sustainable fuel source.
   

Ethanol Biofuel Market Share

The ethanol biofuel industry is characterized by the presence of established global players alongside regional companies. Collaborations and public-private partnerships involving research institutions, government agencies, and biofuel companies have been instrumental in driving forward the industry's research and development initiatives.
 

Ethanol Biofuel Market Companies

The major key players operating across the ethanol biofuel industry includes:

• ADM
• Borregaard AS
• BTG International Ltd
• Cargill
• Chevron Corporation
• CLARIANT
• COFCO
• CropEnergies AG
• FutureFuel Corporation
• GreenJoules
• Münzer Bioindustrie GmbH
• My Eco Energy
• Neste
• POET, LLC
• Praj Industries
• The Andersons, Inc.
• TotalEnergies
• UPM
• VERBIO AG
• Wilmar International Ltd
   

Ethanol Biofuel Industry News

• In September 2023, the Indian government has made a strategic decision to allocate over USD 80 million through India Oil Company in the 2G (second generation) ethanol sector. This investment represents a concerted effort to embrace cleaner energy sources, aiming to reduce greenhouse gas emissions.
   
• In November 2022, United Airlines Ventures (UAV) has invested in NEXT Renewable Fuels (NEXT) to support the establishment of a biofuel refinery in Port Westward, Oregon, with anticipated production commencement in 2026. The strategic location and valuable assets of NEXT's primary facility position it advantageously for the distribution of biofuel throughout the West Coast. This investment has the potential to bolster United Airlines' access to a sustainable aviation fuel supply.
   

This ethanol biofuel market research report includes in-depth coverage of the industry with estimates & forecast in terms of ‘Mtoe’ & USD Million’ from 2019 to 2032 for the following segments:

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Market, By Feedstock

• Coarse Grain
• Sugar Crop
• Vegetable Oil
• Others

Market, By Application

• Transportation
• Aviation
• Others

The above information has been provided for the following countries across the regions.

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • UK
  • Spain
  • Italy
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • South Africa
• Latin America
  • Brazil
  • Argentina