The global bio-alcohol market size was valued at USD 10.8 billion in 2022 and is projected to reach a value of USD 21.95 billion by 2031, registering a CAGR of 8.20% during the forecast period 2023-2031.
Bio-alcohols, comprising bio-ethanol, bio-methanol, bio-butanol, and bio-propanol, are commonly used as fuels. Microorganisms and enzymes produce them through the fermentation of starches, sugars, or cellulose. The two forms of bio-alcohols are first-generation and second-generation. First-generation is made from crops such as sugar starch and vegetables, which can be used for human consumption. Second-generation products are made from products that humans cannot consume, such as stems, wood, and branches.
In the last few decades, the demand for fossil fuels has been increasing substantially. Fossil fuels are considered more expensive and are claimed to be the primary key reason behind global warming. Bio-alcohols are alternatives to fossil fuels. Exhaust gases of products are much cleaner, and their usage decreases the net emission of greenhouse gases by more than 37.1%. The amount of carbon dioxide consumed by crops during photosynthesis equals the amount of carbon dioxide released. Thus, bio-alcohols are eco-friendly and expected to drive their adoption during the forecasted period.
The growth of the bio-alcohol market is peopled by the increasing scarcity of non-renewable resources and fluctuating prices of crude oil. The demand for biofuels is increasing with the growing population and the subsequent rise in the demand for vehicles across emerging economies. Products are renewable, eco-friendly, and help in reducing carbon dioxide emissions. With technological developments, the use of cellulosic biomass is increasing in the industrial sector, which is expected to drive market growth in the coming years. Widespread availability is a critical challenge that must be overcome to provide impetus to market growth further.
|Market Size||USD 21.95 billion by 2031|
|Fastest Growing Market||North America|
|Largest Market||Asia Pacific|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
A biofuel made from the fermentation of organic materials is called bio-alcohol. Waste materials such as corn, sugar cane, or animal excrement can be used to make bio-alcohol. The use of agricultural commodities raised expressly for the manufacturing of alcohol is another resource (rather than food). Transportation and infrastructure are two businesses that can use bio-alcohol. Bioethanol is frequently praised for being renewable, emitting fewer greenhouse gases than conventional fuels like oil or coal, and acting as a fuel for heaters in cold locations. The need for bio-alcohol is increasing for agrochemicals, chemical intermediates, and transportation fuels.
Over the past few decades, the demand for fossil fuels has significantly increased. These are thought to be very pricey and are said to be the primary cause of global warming. Alcohols made from biological sources are viewed as a fossil fuel substitute. These alcohols produce substantially cleaner exhaust gases, and their application lowers net greenhouse gas emissions by more than 37.1%. During the projection period, it is predicted that all of these environmental considerations will drive the market for bio alcohol. In addition, bio-based alcohol has significant power potential, making its usage as fuel at scale exceedingly viable.
The drawbacks of bio alcohol, such as the requirement for arable land, the enormous quantity of carbon dioxide released during the production of bioethanol, as well as higher pricing, will impede the market's growth. Furthermore, there is the worry that a few farmers may sacrifice food crops for biofuel manufacturing due to the lucrative costs of bioethanol, which would raise food prices globally.
Long-term manufacturing of bio alcohol is expected to require a sizable amount of biomass due to its high availability and low cost. Given that feedstock accounts for more than 75% of the production of bio alcohol, investment costs and feedstock impact the economy of scale. Situations in the food market affect the rising conversion of biomass to ethanol as a substitute for sugar and grain surplus. In turn, this creates a lot of prospects for biomass usage in the bio-alcohol market in the years to come.
Depending on the region, the market is analyzed in North America, Asia-Pacific, Europe, and LAMEA. Asia-Pacific dominates the market.
Asia-Pacific is amongst the fastest-growing regions in the bio-alcohol market, propelled mainly by the growth of end-use industries that create demand for bio-ethanol in emerging countries such as China, India, and Japan. Due to the large population in the area and the rising middle-class affluence, there is an increasing need for high-performance items. China, India, and Indonesia are among the nations in the region that are making significant investments in infrastructure and building projects. This, together with the expanding automobile industry, has made the area a significant market for bio-based alcohols.
In North America, government rules and regulations regarding the use of renewable resources have been increasing with a rise in crude oil prices and carbon dioxide emissions. Governments in North America are offering support in the form of loan guarantees to those who are manufacturing high-performance bio-based chemicals. Germany's large market share is a result of strict government rules governing carbon emissions and the usage of biofuels.
Europe is one of the largest consumers of products, driven by stringent government regulations regarding carbon emissions that target a sustainable, greener environment. Germany's automobile industry focuses on using bio-based fuels to increase fuel efficiency.
The market for bio-alcohol is anticipated to increase in South America due to the region's demand for bio-ethanol to support its growing industrialization.
The global bio-alcohol market is segmented into type and application.
The bio-alcohol market is segmented based on type into bioethanol, bio-methanol, biobutanol, and BDO. The bioethanol segment will likely account for a significant market share during the forecast period.
The bioethanol segment will likely account for a significant market share during the forecast period, owing to the rising demand for eco-friendly and renewable energy sources. Moreover, bioethanol is a conventional fuel source owing to its high octane value and low greenhouse gas emission.
Since biomethanol has a high octane rating, it is considered an alternative energy source. Minimal flammability, excellent performance, and low emissions are further benefits. Since methanol breaks down into CO2 and water in the presence of steam, it can be utilized in fuel cell-powered automobiles.
Internal combustion engines use biobutanol as fuel. Its characteristics are comparable to those of gasoline. Even some gasoline-powered vehicles that haven't been upgraded can use biobutanol.
Bio BDO is a biofuel created from plants like corn and sugarcane. Brazil is the country where it has been used most frequently to power cars, trucks, buses, and other forms of transportation. Additionally, power generation or heating can be accomplished with bio-BDO. The advantage of this type of ethanol is that it does not compete with human consumption because it does not rely on food sources like corn or wheat. Instead, crops are converted into alcohol through procedures like fermentation or distillation.
The bio-alcohol market is segmented into transportation, medical, power generation, and others. The transportation segment is likely to dominate the market during the forecast period.
The transportation segment will likely dominate the market during the forecast period, owing to the growing use of products in the sector, due to its benefits such as enhanced efficiency and optimal performance. Moreover, the increasing population and demand for vehicles are other factors expected to bolster market growth during the forecast period.
Bio-alcohol is employed in medical procedures, including skin graft pain relief and inflammation reduction. Additionally, bioethanol can be administered topically to minor cuts, abrasions, and burns that don't require hospitalization. A variety of illnesses, including cancer, diabetes mellitus, and hepatitis, are treated using bio-alcohol. Due to its biodegradability, bioethanol can also replace mineral oil in medical equipment.
In the infrastructure and building sectors, bio-alcohol is employed. It facilitates the development of materials that serve as building blocks, such as adhesives, bio binders, insulating foams, flooring systems, or roof coatings. Some oil pipelines use bio-alcohol to increase efficiency and reduce friction. In the future, bioethanol might be used in pipes for pressurized liquids like water or sewage systems.
The major players in the market are: