The Global Bio-ethanol Market size was estimated at around 100 billion liters in 2020 and the market is projected to register a CAGR of over 4.5% during the forecast period (2021-2026). The market was negatively impacted by COVID-19 in 2020. Owing to the pandemic scenario, several countries were forced to go in lockdown, which led people to minimize the usage of personal vehicles, thus creating a negative impact on the demand of ethanol-blended gasoline fuel, which in-turn negatively impacted the bio-ethanol market demand. However, the use of ethanol sanitizers as disinfectants has increased in the current situation, thus enhancing the market growth for bio-ethanol. In April 2020, BASF started producing hand sanitizers from bio-ethanol in Ludwigshafen.

- Over the short term, increasing demand of bio-ethanol blending in gasoline and increasing government initiatives to produce and use greener fuels like bio-ethanol are driving the market growth.
- In case of the United States, specifically, uplifting restrictions on selling gasoline containing high percentage of ethanol will be a major driver in the country.

- On the flipside, shifting focus to bio-butanol and less mileage provided, when blended with more percentage of bio-ethanol, is going to somehow hinder the market growth. Moreover, declining sales and production in the automotive industry will further have an adverse impact on the market studied.
- Increasing consumption of biofuels like bio-ethanol in the aviation industry is likely to create opportunities for the market in the coming years.
- North America dominated the market across the world, with the largest consumption from the United States.

Key Market Trends

Automotive and Transportation Segment to Drive the Market Growth

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- Ethanol derived from sugarcane is a comparatively sustainable fuel, with direct emissions up to 90% lower than those of gasoline or diesel. Ethanol, produced from biomass, has been considered a suitable automobile fuel since the invention of automobiles, particularly for vehicles powered with spark-ignition engines.

- Bioethanol has mostly been used as a biofuel for transport, as it is blended with petrol at 5% and in some countries at a 10% level. Bioethanol is by far the most commonly used biofuel, globally, and is used alongside conventional petrol to fuel petrol engines in road vehicles. It can also be used for the production of the ethyl tertiary butyl ether (ETBE), which is an octane booster and used in many types of petrol.

- In India, currently, 4% to 5% of ethanol is mixed with petrol. The government has been planning to achieve 10% ethanol blending with petrol by 2022 and 20% by 2030. To get this 10% blending, the requirement of bioethanol will be 3.3 billion liters, which is expected to propel economic opportunities for Indian sugar mills in the coming years.
- As of Q3 2019, about 67.47 million vehicles were produced globally and has reached about 52 million vehicles till Q3 2020, registering a decline rate of about 23%, thus led to a decrease in the demand for automotive fuels, which in turn negatively impacted the market growth of bio-ethanol.

- An important consideration when marketing the price of bioethanol is the fact that ethanol contains around 30% less energy per liter than petrol. Therefore, the sale price will have an important impact on take-up of bioethanol as a transport fuel.
- Therefore, the aforementioned factors are expected to show significant impact on the market in the coming years.

North America Region to Dominate the Market

- North America region is dominating the global bio-ethanol market share. The United States is the largest producer of bio-ethanol, worldwide, followed by Brazil, China, India, and Canada. It is also the largest consumer of bio-ethanol.

- Presently, the total production capacity of bioethanol from biorefineries of the United States is about 66.0 billion liters per year and the capacity is going to increase in the coming years.
- In recent years, bio-ethanol production increased as a result of higher renewable fuel standard (RFS) targets and growth in domestic motor gasoline consumption, almost all of which is now blended with 10% ethanol by volume.
- Up to Q3 of 2019, North America has produced about 15.4 million vehicles and has reached about 10.9 million vehicles in Q3 of 2020, with a decline rate of about 29%, thus led to a decrease in the consumption of bio-ethanol for gasoline blending, which in turn negatively impacted the market growth.
- Moreover, the United States pharmaceutical industry is also expanding at a rapid pace. According to the Centre of Medicare & Medicaid Services (CMS), the US National Health Expenditure is projected to grow by an average of 5.5% annually over the next decade.

- Driven by biofuel policies, which aim to reduce greenhouse gas (GHG) emissions and increase domestic energy supply, US production and consumption of bio-ethanol have doubled over the years.
- The market demand for bio-ethanol has improved over the decade in the region, owing to factors, such as rapid growth in corn-based bio-ethanol, advances in crop yields, biomass-to-ethanol conversion and energy efficiency.
- Furthermore, owing to the COVID-19 scenario, the demand of bio-ethanol from various end-user industries like automotive and food and beverages has been decreased.
- Moreover, considering to the post-pandemic scenario, these end-user industries will pick up the pace in the North America region, thus the market demand for bio-ethanol will rise in the forecast period.

Competitive Landscape

The global bio-ethanol market is fragmented with several players opertaing in the market. Some of these major players include POET, LLC, Valero, ADM, Green Plains Inc., and Flint Hills Resources, among others.

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