Ethanol Market Size, Share, Trends, Growth 2032

Ethanol Market Industry Prospective:

The global ethanol market size was worth around USD 110.72 billion in 2023 and is predicted to grow to around USD 176.22 billion by 2032 with a compound annual growth rate (CAGR) of roughly 5.30% between 2024 and 2032.

Request Free Sample

Ethanol Market: Overview

Ethanol is an organic compound with a chemical formula of CH3CH2OH. It is also known as alcohol and is a keyingredient in major alcoholic beverages such as beer and wine. Ethanol is a colorless liquid that easily dissolves in water making it a highly sought-after compound in several other end-user industries ranging from personal care to food additives. Ethanol is highly volatile and flammable and hence must be used with extreme care. According to official studies, ethanol as a part of alcoholic beverages is the second most consumed psychoactive depressant following caffeine.

The organic compound is naturally produced as a byproduct of plant fermentation. It can also be produced through ethylene hydration. The demand for ethanol has been growing across major industries however, the final application of the compound in other items is widely regulated.

The growing production rate of ethanol is expected to promote more growth opportunities in the long run. In addition to this, the rising use in the buildings & construction industry along with the paint and varnishes sector will be crucial to shaping the industry’s overall revenue in the future.

Key Insights:

• As per the analysis shared by our research analyst, the global ethanol market is estimated to grow annually at a CAGR of around 5.30% over the forecast period (2024-2032)
• In terms of revenue, the global ethanol market size was valued at around USD 110.72 billion in 2023 and is projected to reach USD 176.22 billion, by 2032.
• The market is projected to grow at a significant rate due to the rising demand for personal care & cosmetic items.
• Based on the type, the bio-based segment is anticipated to command the largest market share.
• Based on the application, the fuel segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on region, North America is projected to dominate the global market during the forecast period.

Ethanol Market: Growth Drivers

Rising demand for personal care & cosmetic items will drive market demand rate in the future

The global ethanol market is expected to grow due to the rising demand for the compound in the personal care & cosmetic industry. Ethanol is widely used in the production of personal care items due to its excellent preservation-related properties. In addition to this, it is also crucial to maintain the textural integrity of the personal care item by ensuring that the components do not break down.

Market analysis suggests that the use of ethanol helps in cleaning the skin thus allowing personal grooming items to meet consumer needs. Another application of ethanol is found in the hair spray segment since the compound assists in the product adhering to the hair. The demand for ethanol escalated during COVID-19 due to the use of the compound in the production of hand sanitizers since ethanol has proven beneficial in killing microorganisms such as viruses, fungi, and bacteria.

COVID-19 resulted in increased consumption of hand sanitizers and the trend has continued as of 2024. Consumer awareness related to the importance of maintaining personal hygiene has improved leading to higher use of hand sanitizers especially in areas with limited supply of water and soap. The demand for personal care products is on the rise influenced by multiple factors. The most evident reasons include increased disposable income and higher access to products through the emergence of e-commerce platforms.

Rising demand for alcoholic beverages worldwide will generate demand for ethanol in the coming years

The demand for alcoholic beverages has increased across the globe. For instance, the rapid rate of urbanization and changing consumer lifestyles have been a critical factor in escalating the statistics related to alcohol demand worldwide.

In addition to this, cultural barriers related to alcohol drinking have diminished as more people are willing to gain new experiences in life. Furthermore, the increased rate of tourism especially to international locations has also prompted growth in the alcoholic beverages segment.

In addition to this, companies manufacturing and selling alcoholic drinks have adopted innovative approaches to attract new consumers. The rising rate of international partnerships, leveraging the impact of smart marketing & advertising techniques, and product innovation have worked in tandem to generate revenue in the global ethanol market.

Ethanol Market: Restraints

Safety hazard associated with ethanol to limit the industry’s expansion plan

The global industry for ethanol is projected to be restricted due to the safety hazards associated with the use and production of the organic compound. Ethanol can easily catch fire due to a low flash point. If the compound is exposed to excessive heat or fire, it is readily ignited causing a massive fire. Furthermore, the extreme volatility of ethanol also raised questions about safety of using the compound with less care.

Ethanol Market: Opportunities

Ongoing investments in the industry-based research & development segment will generate growth opportunities

The global ethanol market is projected to generate growth opportunities due to the increasing investments in the industry. The construction of new plants along with rising research in extending applications of ethanol point to the excellent growth prospects the industry holds in the future.

In January 2021, LanzaTech and SkyNRG-led the FLITE consortium announced the construction of the LanzaJetTM Alcohol to Jet (AtJ) facility becoming the first-of-its-kind unit. The facility will be equipped to convert waste-based ethanol to more efficient and highly sustainable aviation fuel (SAF). According to official reports, the unit has a capacity of producing 30,000 tons/yr. The EU H2020 program provided a grant of EUR 20 million for the project.

Similarly, in November 2023, ArcelorMittal Steel Corporation began the commercial production of ethanol at its new facility. The company has constructed Europe’s first carbon capture and utilization (CCU) project in the form of a production facility in Belgium. The plant has a production capacity of 80 million liters, meeting around 50% of Belgium’s demand for ethanol.

In August 2024, Verbio, another leading player in the market, initiated the commercial production of ethanol at the company’s biorefinery located in Iowa, USA. The company is a subsidiary of European Verbio SE. Similar projects are being reported across the globe indicating a positive outlook in the future.

Ethanol Market: Challenges

Surging development of novel alternatives will create growth barriers for the industry players

The global industry for ethanol is projected to be challenged by the rising development of novel alternatives to the compound across industries. For instance, fuel companies are excessively inclined toward more eco-friendly solutions such as biofuels.

Furthermore, the development of electric vehicles (EVs) and their growing popularity may have a direct impact on the demand for ethanol in the long term. The introduction of non-alcoholic beverages worldwide may also limit the use of the compound in the food industry.

Ethanol Market: Report Scope

Ethanol Market: Segmentation

The global ethanol market is segmented based on type, application, and region.

Based on the type, the global industry divisions are bio-based and synthetic. In 2023, the highest growth was listed in the bio-based segment. The same trend can be expected in the future. It is produced using renewable sources such as biomass and plant matter. It is a result of the fermentation process. The demand for bio-based ethanol is higher since it has a lower carbon footprint and can be easily produced using natural resources thus allowing companies to promote environmentally-friendly business operations. More than 110 billion liters of ethanol were produced in 2023 according to market analysis.

Based on the application, the global market segments are chemicals, food & beverages, industrial solvents, fuel, and others. In 2023, the highest growth was listed in the fuel segment. The growing demand for energy-efficient automotives across the globe is promoting the demand for ethanol. Some of the most common blends of ethanol are E10, E15, and E85. The demand is significantly high for E10 which consists of 10% ethanol and 90% gasoline. Furthermore, ethanol mix can be used for several types of engines making it highly versatile.

Ethanol Market: Regional Analysis

North America to continue leading all market trends during the forecast period

The global ethanol market is expected to be led by North America during the forecast period. The US will emerge as the highest revenue generator. It contributes to more than 55% of ethanol production in terms of domestic and international production.

In January 2024, the US Department of Energy (DOE) announced the commencement of operations at the world’s first commercial production facility equipped to convert ethanol to SAF in Georgia, USA. The facility is supported by the department’s Bioenergy Technology Office (BETO) and will produce millions of gallons of SAF along with one million gallons of renewable diesel in the first year itself.

According to market research, the US is home to over 180 ethanol plants as of 2023. The regional market is led by increased use of ethanol across crucial industries such as fuel and personal care. The increasing demand for fuel-powered vehicles across North America has been crucial in promoting the consumption of ethanol. In addition to this, the growing consumption of alcoholic beverages across the US, Mexico, and Canada regions further promotes significant revenue in the industry.

Ethanol Market: Competitive Analysis

The global ethanol market is led by players like:

• Alto Ingredients
• POET Biorefining
• Marquis Energy
• Highwater Ethanol
• Valero Renewable Fuels
• ExxonMobil Biofuels
• Archer Daniels Midland (ADM)
• Louis Dreyfus Company
• Flint Hills Resources
• RKA Petroleum
• Aemetis Inc.
• Pacific Ethanol
• Green Plains Inc.
• Greenfield Global
• CIE (Compañía Industrial de Especialidades)

The global ethanol market is segmented as follows:

By Type

• Bio-Based
• Synthetic

By Application

• Chemicals
• Food & Beverages
• Industrial Solvent
• Fuel
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa