Global Ethanol Market - 2021-2028
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Ethanol is a colorless, volatile, flammable organic chemical compound. Many hand sanitizers, medical wipes, antiseptics, and disinfectants comprise it. The global ethanol market is expected to grow at a CAGR of 3.67% during the forecast period.
Increasing automobile sales are expected to boost the demands for ethanol
In the automobile industry, ethanol acts as a major component of gasoline. Almost all gasoline, whether regular or unleaded, contains 10% ethanol. Ethanol blends have the ability to raise gasoline octane ratings. The higher a fuel's ethanol content, the higher its octane rating. Whereas E10 has an octane rating of 87, E15 has an octane rating of 88, and E85 has a rating of 108. This means they can be used in manufacturing powerful and high-compression engines. Although E85 has the highest-octane rating, mid-level blends also have higher octane ratings. Moreover, most of the higher ethanol blends have no discernible mileage loss.
Because of the high demands of ethanol and its various blends in the automotive industry, the global production of ethanol increased from 1790 barrels per day in 2017 to over 1974 barrels per day in 2019, a 10.3% increase in production, based on data provided by the International Energy Agency. Further statistics state that, the global automobile sales are expected to increase to just under 70 million units in 2021, up from an estimated 63.8 million units in 2020. The market value of the global automotive industry is estimated to grow by almost 9 trillion US dollars by 2030, as compared to the current 2020 market value.
Environmental benefits of Ethanol in the automobile industry are expected to boost its demand
Ethanol is made from corn, which is organic matter. As a result, it is a renewable fuel. As a result, ethanol is an environmentally friendly and long-term solution. According to a 2019 USDA study, using corn-based ethanol instead of gasoline results in a 37% reduction in greenhouse gas emissions. This is a significant difference with serious implications for our health and environmental sustainability. Ethanol emits fewer greenhouse gases during production as well as from the tailpipe during use. While using ethanol as a fuel generates emissions, increasing the amount of clean-burning ethanol in gasoline improves air quality by 15-30%, according to research carried out by Urban Air Initiative. Due to its environmental benefits, Ethanol is expected to now comprise of almost 85% of gasoline, which will boost the demand for it.
The corrosiveness of Ethanol and huge land requirement for its production are expected to restrain the global ethanol market.
COVID-19 Impact Analysis
The impact of COVID-19 pandemic on the Global Ethanol market is mixed. According to data given on the International Energy Agency's website, Ethanol production dropped from 1947 thousand barrels per day in 2019 to 1689 thousand barrels per day in 2020, a decrease of 13.3%. Automobile sales fell by 14% in 2020 as countries imposed lockdown measures in response to the COVID-19 pandemic. Moreover, the growing concerns with regards to air pollutions pushed people to look for alternatives in transport vehicles. This boosted the sales of electric vehicles around the world.
A major use of Ethanol is in manufacturing medical wipes, sanitizers and disinfectants. As the current pandemic dictates keeping our hands and bodies clean all the time, there has been a significant boost in the demand for sanitizers and wipes and disinfectants. According to Adobe Analytics, which tracks sales at 80 of the top 100 online retailers in the United States, online sales of hygiene products for virus protection such as hand sanitizers, gloves, masks, and anti-bacterial sprays increased 817 percent in January and February 2020 compared to the same period in 2019. Moreover, Alcohol-based hand sanitizers are recommended by the Centers for Disease Control and Prevention (CDC) as an effective method of decontaminating hands. This is expected to boost the Ethanol production, which is estimated to show an increase of 21.8% by 2024, according to data provided by the International Energy Agency.
The global ethanol market is segmented by type, by grade, by application, by region and by Production process.
Based on Type
The Global Ethanol Market is segmented by type into Fermentation Ethanol and Synthetic Ethanol.
Bioethanol, or ethanol produced through fermentation, accounts for approximately 95 percent of total ethanol production. The remaining is produced through dehydration of ethene, called Synthetic ethanol and it accounts for approximately 5% ethanol production globally, according to data provided by the International Energy Agency. Bioethanol is now widely used as a gasoline additive. Corn in the United States and sugarcane in Brazil are both widely used as raw materials for bioethanol production. In 2018, North America and South America combined to produce 86 billion litres of bioethanol, according to data. Moreover, In 2019, biofuel production in China had reached around 50,000 barrels of oil equivalent per day, which was over 80% of their annual ethanol production. Globally, biofuel (which contains bioethanol and biodiesel) production levels in 2019 reached 1,841 thousand barrels of oil equivalent per day, up from 187 thousand barrels of oil equivalent per day in 2000.
Bioethanol holds almost all of the market share segment because of its applications and advantages. It is easily producible in any plant that contains sugar and starch sources. Greenhouse gases emissions are reduced when it is used as a fuel in automobiles. But recently new research has suggested that synthetic ethanol gives a much better octane rating to automobile engines and the bioethanol fuel is not as efficient a fuel as synthetic ethanol. Therefore, it is estimated that synthetic ethanol will increase its market share during the forecast period.
Based on Grade
The Global ethanol market by grade is segmented into fuel grade, food grade, industrial grade and Others.
Based on Application
The global ethanol market based on application is segmented into Fuel additive, industrial solvent, Food and Beverage, chemical intermediate and Others.
Based on Production process
The global ethanol market based on Production process is segmented into Starch and Sugar-based ethanol production, Cellulosic production, Others
The global ethanol market based on region is segmented into North America, Europe, South America, Asia-Pacific and Middle East & Africa.
North America has dominated the Ethanol production market and is expected to do so during the forecast period. According to the US Energy Information Administration, in 2020, the USA ranked 1 in Ethanol production which quantified to 13926 million gallons, making up over 53% of the global Ethanol production. It was followed by Brazil, which manufactured over 7930 million gallons of Ethanol, holding over 30% of the production in the market. The entire European continent holds over 5% of the Ethanol production followed closely by China and India at 5% and 3% respectively. Inspite of the demand for Ethanol being affected drastically due to COVID-19, a steady increase has been observed in the past decade. Most of it comes from United States. Ethanol production in Canada had been at a steady production of 30 thousand gallons per day till 2019, took a hit in 2020 but is expected to cross the 30 thousand per day mark during the forecast period.
Weekly gasoline consumption for 2020 in the United States averaged over 8.1 million barrels per day, a significant decrease from the 9.3 million barrels per day observed in 2018 and 2019, according to the Agricultural Economic Insights data. This decrease in gasoline consumption also affected the demand for Ethanol, which hit a low point in 2020. Only 902000 barrels were produced per day, a decrease of 12.3% from 2019. In 2020, Iowa retailers sold 60.59 million gallons of E15, up from 48.96 million gallons in 2019 and more than doubling the volume of E15 sales in 2017. Despite a 14.3 percent drop in the state's overall motor gasoline consumption from 2019 levels, E15 sales increased in Iowa. The drop in Iowa gasoline demand mirrored the national trend, which saw a 13.5% drop in 2020 compared to 2019.
COVID-19 pandemic has also boosted the demand for sanitizers and disinfectants as these are necessary precautions to ensure that we do not contract the virus. The demand for alcoholic beverages is expected to boost the worldwide ethanol production market during the forecast period, as people mostly stay at home.
The Global Ethanol market is fragmented with many key players. Majority of these key players are based in North America and South America. Technology launches, acquisitions, and R&D activities are key strategies used by Ethanol market participants. Poet Biorefining is one of the largest ethanol producers in the world. By 2020, the South Dakota-based company will have a 2 billion gallon per-year ethanol production capacity spread across 27 Midwest plants. The key players in the global ethanol market include Heineken, United Breweries, Poet Biorefining, Pacific Ethanol, DONG Energy, Tereos, Ensus, The Archer Daniel Midlands Company.
Company Profile: POET LLC
Company Overview: POET LLC is a biofuel company based in the United States.The privately held corporation, originally known as Broin Companies, is based in Sioux Falls, South Dakota. It was founded by Jeff Broin in 1986.
Product Portfolio: The company specializes in the production of bioethanol. POET's commitment to research and technology enables their biorefineries to produce the highest purity, sustainable purified alcohol for a wide range of applications. They also engage in manufacturing hand sanitizers and PG modifiers.
Recent Developments: 1) POET announced in June 2021 that it had acquired the bioethanol assets of Flint Hills Resources in their entirety, increasing the company's production capacity by 40%.
2) During the 2021 Virtual Minnesota Safety and Health Conference in May, POET Biorefining Glenville was recognised for excellence in workplace safety and health.