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CAGR Of 5%|Bioethanol Market Driven By Growing Awareness Regarding Usage Of Biofuels

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The global bioethanol market was valued at US$ 57,650 million in 2017 and is expected to register a CAGR of over 5%.

Bioethanol is a biodegradable, renewable energy resource that is produced from biomass through sugar fermentation and chemical process. Bioethanol forms an attractive alternative to conventional fuel sources owing to its high-octane value and lower greenhouse gas emissions. Bioethanol is used in transportation, alcoholic beverages, and pharmaceuticals.

Global Bioethanol Market Dynamics:

Growing awareness regarding usage of biofuels is expected to drive the bioethanol market over the forecast period. Biofuels are renewable energy resource that is derived from the crops waste, manure, and plants grown for fuel. Most of the fossil fuels may expire someday were as biofuels are renewable fuel that can be generated from plants and these plants can be replanted again and again for fuel generation.

Rising awareness regarding the greenhouse gas emissions is expected to have a positive impact on the bioethanol market over the forecast period. Combustion emission is lower for bioethanol than that of fossil fuels. Ethanol is mixed with gasoline, the mixture burns cleaner and has higher octane levels than that of pure gasoline.

However, production cost and environmental effects during production are primary factors expected to hamper the growth of the global bioethanol market. Bioethanol manufacture has long process from growing plants, fermenting, and distilling. The entire production process is costly compared to fossil fuel extraction. Growing these crops require water, countries that do not receive sufficient rainfall will lead to rising in production cost of the ethanol fuel.

Market analysis by bioethanol type:

On the basis of type segmentation, corn-based bioethanol segment is expected to contribute major revenue share and expected to maintain its dominance over the forecast period. Corn-based bioethanol witness highest CAGR over 5.0%, owing to low prices and large availability of corn. Governments of North America and Latin America provide subsidies for corn production to promote corn production.

Market analysis by blend:

On the basis of blend segmentation, E15 to E70 segment is estimated to contribute major revenue share and expected to maintain its dominance over the forecast period. US government passed a regulation under Energy Independence and Security Act, which mandates consumption of renewable fuels in transportation sector. E70 blend is used as winter blend in US and Sweden as transportation fuel during cold weather to avoid starting problems of vehicles. While, the Brazilian government made mandated of blending ethanol with gasoline between 10% to 22%.

Market analysis by application:

Among all the application segments, transportation segment is expected to register highest CAGR over 5.5%. Bioethanol is used to blend the petrol that is used fuel in transportation. Ethanol burns clean and protects the engines, and often extends engine maintenance, boosting octane, and release low greenhouse gas emissions compared to pure gasoline.

Government initiatives to promote the use of bioethanol as fuel in transportation is expected to fuel the market growth over the forecast period. Bioethanol for Sustainable Transport (BEST) was a four-year plan started by European Union for promoting bioethanol as vehicle fuel in Europe.

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Analysis by Region:

North America market is expected to dominate the global bioethanol market, and it accounts for largest market revenue over US$ 24,500 million in 2017 as compared to that of markets in other regions. Dominance by North America market is expected to continue over the forecast period with comparatively higher CAGR than that of other regions, owing to higher demand among consumers in countries in the region. Presence of leading bioethanol manufacturers in this region and increasing consumers of bioethanol in this region is expected to fuel the market growth over the forecast period.

North America is the largest producer and consumer of bioethanol. The renewable fuel standard (RFS) program started by the US government under Energy Policy Act of 2005 to reduce the greenhouse gas emission is anticipated to fuel the growth of the market over the forecast

Key players in the global market include Archer Daniels Midland Company, POET LLC, Green Plains, Valero Energy Corporation, Flint Hills Resource, Abengoa Bioenergy SA, Royal Dutch Shell plc, Pacific Ethanol, Petrobras, and The Andersons.