The depletion of natural resources due to the exploding demand for energy, growing consciousness regarding sustainable fuels, and climate change due to the excessive greenhouse gas emissions are the major growth drivers for the global bioethanol market. Due to the aforementioned factors, the industry is projected to witness significant growth during the forecast period (2021–2030).
In the COVID-19 pandemic, the manufacturing facilities of industry players were closed due to lockdowns, which, in turn, has negatively impacted the bioethanol market. Moreover, there has been a reduced demand for bioethanol owing to these lockdowns and other government regulations, which have forced people to stay inside their homes. This led to the decreased usage of automobiles, which led to a drastic reduction in the global automotive fuel demand.
The market for bioethanol is divided into E5, E10, E15 & E70, E75 & E85, and others, on the basis of fuel blend. Among these, the E10 category held the largest share in the market in 2020, and it is expected to advance at a substantial CAGR during the forecast period. This can be attributed to the fact that E10 is a reliable fuel and compatible with the majority of petrol (gasoline)-powered cars on the roads in the present scenario.
The bioethanol market is divided into transportation, alcoholic beverages, cosmetics, pharmaceuticals, and others, on the basis of end use. Among these, the transportation category held the largest market share in 2020, and it is expected to retain its position during the forecast period. This will primarily be due to the rise in the adoption of bioethanol as a transportation fuel and blending mandates by several regulatory bodies. In addition, with the rising population and personal disposable income, the number of vehicles is increasing.
Geographically, North America held the dominating share in the market for bioethanol in 2020, and it would continue on this path in the coming years. This will majorly be due to the large-scale production of bioethanol in the region because of the rising demand for it. Moreover, the mandatory usage of bioethanol blends in vehicles is leading to the increasing sales of bioethanol in the region.
Players in the bioethanol industry are expanding geographically to gain a significant position. For instance, in April 2019, Raizen Energia SA bought certain areas at the ports of Miramar and Vila do Conde for the storage of liquids in bulk, to strengthen its distribution network of bioethanol across Brazil.
Some of the key players operating in the bioethanol market are The Archer-Daniels-Midland Company, POET LLC, Green Plains Inc., Valero Energy Corporation, Tereos, Raizen SA, and Flint Hills Resources LLC.