Bioethanol is a renewable energy source produced from agricultural feedstocks such as corn, sugarcane, and cellulosic biomass. Bioethanol is blended with gasoline to produce fuel ethanol, which acts as an octane booster and oxygenate in fuels. It is beneficial and more environment-friendly as compared to fossil fuels owing to its renewable and lower greenhouse gas emissions profile. With growing environmental concerns regarding emissions from gasoline vehicles, bioethanol is being promoted as a sustainable fuel alternative in many countries.
The global bioethanol market is estimated to be valued at US$ 13.7 billion in 2024 and is expected to exhibit a CAGR of 9.8% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Mandatory blending targets by governments worldwide present a major opportunity for growth in the bioethanol market. Many countries have mandated the use of fuel ethanol blends like E10 and E85 to reduce dependence on imported petroleum and curb emissions. For instance, China and India have mandated a 10% ethanol blending level for gasoline. The US and Brazil also have long standing blending requirements. Such blending mandates ensure a guaranteed offtake for bioethanol producers and promote investments in the industry. The growing mandates for biofuel use worldwide are expected to drive significant demand for bioethanol over the forecast period.
Porter's Analysis
Threat of new entrants: The bioethanol market has moderate threat of new entrants due to required feedstock sourcing capabilities, production technologies and distribution network.
Bargaining power of buyers: The bargaining power of buyers is moderate as there are numerous producers catering to the demand from transportation sector and oil marketing companies.
Bargaining power of suppliers: The suppliers of raw materials like corn, sugarcane etc have moderate bargaining power due to availability of substitutes.
Threat of new substitutes: There is high threat of substitutes like electric vehicles and other cellulosic ethanol production technologies.
Competitive rivalry: The rivalry in the market is high with presence of numerous global and regional producers.
SWOT Analysis
Strength:bioethanol is a renewable fuel and helps reduce greenhouse gas emissions. It can replace gasoline in most vehicle engines.
Weakness: Production of bioethanol requires huge capital investments and supportive public policies. Raw material prices are susceptible to climate changes.
Opportunity: Growing concerns about environment sustainability is driving demand. Government policies and investments are supporting market growth. Use of agricultural waste can enhance feedstock availability.
Threats: Competition from other green fuels. Potential food shortage issues due to diversion of agricultural land for feedstock.
Key Takeaways
The global bioethanol market is expected to witness high growth at a CAGR of 9.8% during the forecast period of 2024 to 2031. The market size is projected to reach US$ 13.7 Billion by 2024.
Regional analysis indicates North America will dominate the market during the forecast period supported by stringent environmental regulations and mandates for biofuel blending in gasoline. Availability of feedstock like corn makes US the leading producer.
Key players operating in the bioethanol market are CropEnergies, British Sugar, New Generation Biofuels Holdings, Inc., Vivergo Fuels Limited, Butalco GmbH, and Global Green SA. CropEnergies is one of the leading producers with production facilities across Europe.
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