Bio alcohol is a sustainable organic chemical that can be used as fuels in several engines. It is produced by the action of microorganisms and enzymes during the fermentation process of sugars or starches. It is co friendly in nature and used in applications such as transportation as an alternative to gasoline. The bio alcohol market is driven by increase in scarcity of nonrenewable resources and rise in crude oil prices.
Presently, bio alcohols are manufactured from feedstock such as biomass including organic wastes. With the technological advancement, cellulosic biomass usage is increasing and is expected to support the growth of the bio alcohol market. Cellulosic biomass is made up of very complex sugar molecules with the use of biomass such as switch grass and corn stover. Researchers are now able to use cellulosic biomass for improved bio fuel production, due to crucial advances in biotechnology.
On the basis of type, the global bio alcohol market is categorized into bioethanol, biomethanol, biobutanol, and bio-butanediol. Bioethanol to lead the market growth as it offers higher-octane fuel alternative and is also used for energy-oriented applications, such as power generation. Its applications in buses, trucks, airplanes, medical industry, and fuel cells is expected to lift the growth in the market.
Based on raw materials, the bio alcohol market is bifurcated into grains, sugarcane, industrial beets, biowaste, and others. In 2017, grains dominated the market and is expected to maintain its dominancy throughout the forecast period. Cereal grains are widely used for food and feed applications; however, overproduction of cereals and advancement in technology in tillage, seed production, and sowing led cereals to be used as an energy source.
In terms of application, the bio alcohol market is divided into transportation, power generation, medical, and others. Emerging uses of bioethanol in energy-oriented applications such as in power generation provides lucrative opportunities for market growth.
The demand for fossil fuels is increasing substantially over the last decades. These are considered to be highly expensive and are claimed to be the main reason for global warming. Bio-based alcohols are considered to be an alternative for fossil fuels. The exhaust gases of these alcohols are much cleaner and their usage reduces the net emissions of greenhouse gases by more than 37.1%. All these eco-friendly factors are anticipated to drive the bio alcohol market through the forecast period. Apart from this, the power potential of bio-based alcohol is also high, making it a highly feasible fuel to be used at large scales.
The disadvantages of bio alcohol such as requirement of arable land, during the production process of bioethanol a huge amount of carbon dioxide is released, and increased prices are expected to hinder the bio alcohol market. This is so because there is a concern that due to the lucrative prices of bioethanol some farmers may sacrifice food crops for biofuel production which will increase food prices around the world.
High availability and low cost of biomass is predicted to provide significant amount of feedstock for the production of bio alcohol in the long term. Feedstock and investment cost affects economy of scale as more than 75% of the bio alcohol production is dependent on feedstock. Rising conversion of biomass to ethanol as alternative to sugar and grain surplus is reliant on food market situations. This in turn provides significant opportunities for utilization of biomass in the bio alcohol market in coming years.
Insights by geography
Asia-Pacific is expected to be the fastest growing region for bio alcohol market owing to the enduring growth in the end-user industries including construction, transportation, and electronics. The region has a presence of huge population and is witnessing a growing demand for high performance products with increase in the income of the middle class. The countries in the region including China, India, and Indonesia are investing highly on the construction and infrastructure projects. This coupled with growing automotive sector to make the region a prominent market for bio-based alcohols.
Some of the major players operating in the global bio alcohol market Genomatica Inc., BASF SE, Fulcrum BioEnergy Inc, Cool Planet Energy Systems Inc., DowDuPont Inc, Myriant Corporation, Mascoma LLC, Harvest Power Inc., and Mitsubishi Chemical Corporation.