Rising Prominence of Ethanol as a Fuel
The rising prominence of ethanol as a fuel is anticipated to drive the market growth over the coming years. The product is considered as a renewable fuel produced via various plant materials. Increasing practice of using ethanol along with gasoline has widely gained popularity around the globe over the last few years. For instance, in the U.S., nearly 98% of the gasoline consists of ethanol.
The top ethanol producing countries are Brazil and the U.S. As per the stats released by the Renewable Fuels Association, overall production in the U.S. increased from nearly 6.52 billion gallons in 2007 to 15.8 billion gallons in 2017. Similarly, Brazil production increased from nearly 5.0 billion gallons in 2007 to roughly 7.0 billion gallons in 2017. These two countries are responsible of producing nearly 85% of the overall global ethanol production.
Ethanol Demand Surging due to Global Pandemic
Revelation of global pandemic has strongly boosted the demand for sanitizing products. Denatured ethanol is a key raw material to produce sanitizing products. Many of the prominent vendors within the industry have reported growing demand of the product. For instance, Cargill which is a key player of the industry, involved in the production and commercialization of the ethanol reported that the demand from European Union doubled since February 2020.
Similarly, Tereos which is among the largest producer of bioethanol alcohol in the European region has recorded a strong spike in terms of demand. The company reported that recently, it received an order to provide nearly 20,000 hectoliters of denatured ethanol.
As the impact of COVID 19 enhances around the globe, demand for hand sanitizer is also expected to pick up. Thus, positively influencing the market dynamics of ethanol industry around the globe.
On the basis of grade, market is segmented into food grade, industrial grade, pharmaceutical grade and lab grade. Among this category, industrial grade is projected to observe highest growth over the predicted timeline. Cleaning products such as toiletries, cosmetics,sanitizers, and others account for nearly quarter of the end-use market for industrial grade ethanol.
Another key driver for the growth of industrial grade segment is the increasing use of the product to derive cleaner gasoline. The product offers greater octane numbers as compared to gasoline. Thus, creating exceptional blending properties and reducing carbon monoxide emission at the same time.
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On the basis of purity, market is segmented into undenatured and denatured ethanol respectively. Within this segment, denatured ecategory is likely to dominate the market share over the coming years. ThIs segment is expected to witness greater demand over the short term period due to the rising demand for sanitizing mediums among this COVID 19 situation.
Undenatured segment is expected to observe high growth over the coming years. The product is a 99.6% ethyl alcohol and is widely used across hospitals, labs, clinics, and so on. Amid the global crisis caused due to the outbreak of COVID 19, demand for this segment is projected to spike over the forecast period.
On the basis of application, market is segmented into industrial solvent, fuel additive, disinfectant, beverages, personal care, and others. Among this, disinfectant application segment is projected to observe strong demand over the short term period. This spike in demand is largely attributable to the recent outbreak of coronavirus. As the governments around the globe fight this pandemic, the demand for disinfectants is likely to grow at significant rate.Thus, positively influencing the dynamics of ethanol industry.
Industrial solvent segment is projected to dominate the marker share over the forecast period. The usage of product across various sectorsad specially as biofuel is likely to drive the growth over the long term period.
The key vendors of the industry include AB Miller, Diego, Cargill, Tereos, United Breweries, Archer Daniels Midland, Aventine Renewable Energy, Pure Energy, The Anderson Inc., Alternative Energy Sources, and Advanced Bioenergy LLC.
The vendors of the industry are investing in efficiency upgrade to serve end-use sectors. In addition, industry vendors are focusing on developing eco-friendly products to gain greater market share and offer unique product line.
Ethanol is a colorless flammable liquid produced using fermentation process. The product is generally derived through fermentation of sugar. Mostly corn and sugarcane are used for the production of ethanol.
Global Ethanol Market Segmentation