Ethanol Fuel Market Will Surpass USD 115.65 Billion By 2025| Grand View Research Inc.

June 11 06:10 2019
Ethanol Fuel Market Will Surpass USD 115.65 Billion By 2025| Grand View Research Inc.

Grand View Research, Inc. – Market Research And Consulting.
According to report published by Grand View Research,The rising requirements for minimizing carbon emissions from gasoline in the automotive & transportation industry, is likely to boost the usage of ethanol fuel Market as a bio based additive over the next couple of years.

According to a report, “Fuel Ethanol Market Analysis By Product (Starch-Based, Sugar-Based, Cellulosic), By Application (Conventional Vehicles, Flexible Fuel Vehicles), By Region, And Segment Forecasts, 2018 – 2025″,The global ethanol fuel market is expected to reach USD 115.65 billion by 2025, growing at a CAGR of 6.7%, according to a new report by Grand View Research, Inc. Asia Pacific is estimated to witness a fast paced growth during the forecast period. China, India, and Philippines are the key countries that are considered to positively impact the industry growth in the future.

The government of India is currently drawing efforts on enhancing the use of ethyl alcohol as an automotive fuel. The National Policy on Biofuels was implemented in India in 2009, which stated that the oil manufacturing companies were required to distribute petrol blended with a minimum of 5% ethyl alcohol. Furthermore, this policy proposed a target of 20% increase in the blending rate by the end of 2017 in the country.

Key Takeaways from the report:

  • In terms of volume, sugar-based segment is expected to rise at a CAGR of 5.4% from 2017 to 2025. In terms of revenue, the product demand is expected to reach USD 24.44 billion by the end of 2025.

  • Technological advancement in the production of ethyl alcohol from lignocellulosic raw materials is expected to propel the industry growth during the forecast period

  • In 2012, DuPont commenced the construction of its cellulosic ethyl alcohol facility in Iowa, U.S., that utilizes corn stover as a raw material source and has an anticipated annual manufacturing capacity of 30 million gallons per year. The construction of this manufacturing plant is anticipated to be completed by the end of 2017.

  • India is likely to witness fast paced growth in terms of product demand over the years ahead. In 2016, the Union Minister of Road Transport & Highways and Shipping announced the Indian Government is focusing on increasing the ethanol blend rate in petrol to 22.5% in the future.

  • Abundant availability of raw material substitutes is estimated to lower the bargaining power of suppliers over the years ahead. Barrier for new entrants is estimated to remain high over the years ahead, as longer duration is required to achieve economies of scale.

  • Companies are focusing on business growth by implementing various growth strategies such as forward and backward integration of business operations, acquisition, technology licensing, and distribution agreements.

U.S. fuel ethanol market volume by product, 2014 – 2025 (Billion Liters)

U.S. fuel ethanol market

Growth of the automotive industry in India is another vital factor that is expected to enhance the consumption of the product over the years ahead. Government of India is focusing on making automobile sector as one of the major drivers of the ‘Make in India’ initiative. The manufacturing output of passenger vehicles is likely to reach approximately 9.4 million units by the end of 2026, as stated by the Auto Mission Plan (AMP) 2016-26.

Significant blending mandates in Australia, China, and Philippines are considered to drive the market demand during the forecast period. Australia currently has an E7 ethanol blending mandate implemented in New South Wales. Furthermore, Australia focuses on reaching a 10% biofuels mandate by the end of 2020. In China, nine provinces have proposed a 10% ethanol blends that include Jilin, Henan, Heilongjiang, Liaoning, and Anhui.

Application Insights

Automotive & transportation sector widely incorporates the use of ethanol fuel. Conventional fuel vehicles segment was the largest application of the industry 2016. In terms of volume, this segment is likely to expand at a considerable CAGR of 5.7% during the forecast period between 2017 and 2025.

Conventional vehicles can utilize gasoline with low ethanol blends such as E10 and E15. E10 is a blend of 10% ethanol and 90% gasoline, while E15 comprises 10.5 to 15% ethanol respectively. The rising requirements of boosting fuel economy of conventional vehicles in countries including the U.S., China, India, and Brazil is expected to boost the product consumption in the future.

Flexible fuel vehicles (FFVs) segment is projected to illustrate fastest industry growth during the forecast period. These vehicles consist of internal combustion engines that are capable of operating on both gasoline and ethanol-gasoline blends ranging beyond E10 such as E85, also known as flex fuel. E85 comprises 51% to 83% ethanol blended with gasoline.

Rapid production of FFVs in Brazil, the U.S., and countries in European Union is considered to boost the usage of fuel ethanol in the next couple of years. Key automotive manufacturers such a Dacia, Toyota Group, and Volvo have launched cars designed for utilizing E85 blend. Other niche applications of the product include space heating and steam and power generation.

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Regional Insights

The industry is expected to rise at a robust growth rate especially in developing countries Regulatory policies and mandates imposed in India, China, and Mexico over the use of fuel ethanol in the automotive & transportation sector is expected to improve the long-term energy availability.

North America accounted for the largest share of 59.4% of the total market volume in 2016. This region is likely to be one of the fastest growing consumers of the product, owing to the presence of a well-established automotive industry and strict regulations over particulate emissions. This scenario is likely to reflect in the U.S.

Global fuel ethanol market volume by application, 2016 (%)

Global fuel ethanol market

Other countries in North America including Canada and Mexico have been implementing various environmental policies and programs for improving the industry growth. For instance, Canada signed The Paris Agreement in 2016 and announced its futuristic targets of minimizing emissions by nearly 30%, by the end of 2030. This regulatory scenario is considered to boost the use of low carbon intensity fuels and is ultimately to impact the ethyl alcohol consumption in the future.

Central & South America was the second-largest consumer of the industry in 2016, followed by Europe. Strong production of flexible fuel vehicles in Brazil and Argentina is likely to drive the demand of sugar-based ethanol fuel, over the years ahead. Raízen S.A., GranBio-API, and BP Biofuels are a few of the prominent players operating in the market.

Asia Pacific is likely to witness fastest growth during the forecast period. Rising number of foreign investments coupled with government initiatives towards sustainable development is expected to promote the use of biofuels over the next couple of years. This scenario is likely to be reflected in China, India, and some countries in Southeast Asia.

Grand View Research has segmented the global fuel ethanol market on the basis of product, application, and region:

Ethanol Fuel Product Outlook (Volume, Million Liters; Revenue, USD Million, 2014 – 2025)

  • Starch-based

  • Sugar-based

  • Cellulosic

Ethanol Fuel Application Outlook (Volume, Million Liters; Revenue, USD Million, 2014 – 2025)

  • Conventional Fuel Vehicles

  • Flexible Fuel Vehicles

  • Others

Ethanol Fuel Regional Outlook (Volume, Million Liters; Revenue, USD Million, 2014 – 2025)

  • North America

    • U.S.

  • Europe

    • Germany

    • UK

  • Asia Pacific

    • China

    • India

  • Central & South America

    • Brazil

  • Middle East & Africa

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