Bioethanol Market Size, Share & Trends Analysis Report By Feedstock (Starch-based, Sugar based, Others), By Blend (E10, E20 & E25, E70 & E75, E85, Others), By Application (Transportation Fuel, Power Generation, Cosmetics, Pharmaceutical, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2025-2033

Bioethanol Market Size

The global bioethanol market size was valued at USD 80.03 billion in 2024 and is expected to reach from USD 83.90 billion in 2025 to USD 129.79 billion in 2033, growing at a CAGR of 5.60% over the forecast period (2025-33).

Bioethanol is alcohol obtained from plants rich in cellulose, such as sugar cane, sugar beet, or some grains, such as corn. It is the principal fuel used as a petrol substitute for road transport vehicles. The sugar fermentation process mainly produces bioethanol fuel, although it can also be manufactured by the chemical process of reacting ethylene with steam. The primary sources of sugar required to produce ethanol come from fuel or energy crops. These crops are grown specifically for energy use and include corn, maize, and wheat crops, waste straw, willow and popular trees, sawdust, reed canary grass, cord grasses, Jerusalem artichoke, miscanthus, and sorghum plants. Bioethanol has the same uses as fuels to generate other energy classes, such as heat, motor power (transportation), and electricity.

The global market is witnessing robust growth, primarily driven by rising concerns over carbon emissions and the transition toward renewable energy sources. Governments worldwide are implementing stringent environmental regulations and blending mandates, such as the Renewable Fuel Standard (RFS) in the U.S. and the European Union’s Renewable Energy Directive (RED), which are accelerating bioethanol adoption. The increasing demand for biofuels in transportation and power generation, coupled with advancements in second-generation bioethanol production from non-food biomass, presents significant growth opportunities. Additionally, the expansion of flex-fuel vehicles and rising crude oil prices bolstered market demand. North America and Europe lead in bioethanol production, with growing investments in sustainable production technologies.

Latest Market Trends

Increased demand for renewable fuels

The global market is experiencing growth, fueled by the increasing global demand for renewable energy sources. As concerns about climate change and the environmental impact of fossil fuels intensify, governments and consumers are actively seeking cleaner alternatives. Bioethanol, produced from plant-based materials like corn and sugarcane, has emerged as a viable solution. It offers a renewable and lower-carbon alternative to traditional gasoline, making it an attractive option for transportation and other applications.

• North America will produce around 63 million metric tons of ethanol and nearly 17 million metric tons of biodiesel in 2025. North America is expected to remain the largest biofuel-producing region in the world, primarily due to producers in the United States. By 2030, the United States alone is expected to account for nearly 77 million metric tons in biofuel production.

Bioethanol Market Growth Factors

Bioethanol: a cleaner, greener fuel alternative

Bioethanol is a cleaner and greener alternative to traditional fossil fuels like gasoline. Its advantage lies in its renewability, derived from plant-based materials such as corn, sugarcane, or other biomass. Furthermore, the combustion of bioethanol generally produces lower greenhouse gas emissions than gasoline, contributing to a reduction in overall carbon footprint and mitigating the effects of climate change. Another environmentally friendly characteristic of bioethanol is its biodegradability.

• Grain-based ethanol reduces greenhouse gas emissions by 44-52% compared to gasoline (Argonne National Laboratory). Research from Harvard, MIT, and Tufts found a 46% reduction. Emerging technologies and cellulosic ethanol promise even more significant reductions, up to 70% and 80%, respectively.

Government Regulations

Governmental bodies worldwide are playing a crucial role in driving the expansion of the bioethanol market. By implementing supportive policies, mandates, and incentives, these regulatory bodies are encouraging both the production and consumption of bioethanol. These measures often include blending mandates, tax breaks, subsidies, and research funding, all aimed at promoting bioethanol as a cleaner and more sustainable alternative to traditional fossil fuels.

• Ethanol Blending Programme: This involves producing bioethanol blended with petrol. As per the policy, India was to achieve 10% blending rate (E10) by 2021-22 and 20% (E20) by 2025-26. It has led to the average ethanol blending in petrol rising from 1.6 to 11.8% between 2013-14 and 2022-23.

Restraining Factors

Feedstock challenges and food competition

Bioethanol production relies heavily on crops like corn and sugarcane, which can lead to competition with food production. As demand for bioethanol increases, there's a risk of diverting agricultural resources away from food crops, potentially driving up food prices and raising concerns about food security. This resource competition presents a significant challenge to the long-term growth and sustainability of the global market.

• India has banned sugarcane juice and sugar syrup for ethanol production in the 2023-2024 supply year to ensure enough sugar for domestic use and to control prices. The government will promote maize procurement at MSP for ethanol production to reach its 2025 goal of 20% ethanol-blended petrol (currently at 11%).
• Brazil's bioethanol production dropped from 37.38 billion liters in 2019 to 31.35 billion liters in 2022 due to sugarcane shortages and government policies favoring sugar production.

Market Opportunity

Bioethanol economy: a pathway to sustainable and inclusive industrial development

Industrial Development" suggests that bioethanol production can be a key driver for developing countries' economic growth while promoting sustainability and social inclusion.  This is based on the idea that bioethanol, derived from renewable resources like sugarcane or agricultural waste, can create new industries, jobs, and income streams, particularly in rural areas.  Furthermore, it can reduce reliance on fossil fuels, contributing to a cleaner environment and mitigating climate change.  

• For example, by achieving 15% ethanol blending in 2024, India targets 20% by 2025. India is taking significant steps toward securing its energy future by embracing sustainable practices like ethanol blending.
• According to the International Energy System, biofuel demand will increase by 11 % in 2024 worldwide. In 2023, the global biofuels market was valued at around 123.98 billion USD with a growth rate of 7.02 %. In 2033, the global biofuel market will reach 243.37 billion USD worldwide.

Regional Insights

North America: Leading region

North America dominates the global market due to the strong presence of the United States as a major producer and consumer. The abundance of corn, coupled with supportive government policies like the Renewable Fuel Standard (RFS), has fueled the growth of the bioethanol industry in this region. The well-established infrastructure and high vehicle ownership rates further contribute to North America's leading position.

• US ethanol exports in 2024 have broken the previous record, reaching 1.72 billion gallons through November. With one month left, they're projected to hit 1.9 billion gallons, a new record representing 12% of US ethanol production.
• In 2024, the United States, Brazil, and Indonesia will be among the top three leading countries in biofuel production. Brazil is a pioneer in the biofuel industry and is recognized as the world's foremost sustainable biofuel economy.

Asia Pacific: Rapidly growing market

The Asia Pacific region is witnessing significant growth in the global market, driven by increasing energy demand and government initiatives to promote renewable energy sources. Countries like China, India, and Thailand are investing in bioethanol production and adoption to reduce reliance on fossil fuels and improve energy security. This region's rising population and expanding transportation sector will accelerate market growth further.

• The global Pro AV market is projected to reach USD 325 billion in 2024, from USD 4 billion in 2023, with India leading the Asia Pacific region in growth, according to the Audiovisual and Integrated Experience Association (AVIXA) 2024 Industry Outlook and Trends Analysis (IOTA).  

Countries Insights

• United States: The U.S. leads the global bioethanol market, producing 15.8 billion gallons of ethanol and 3.1 billion gallons of biodiesel and renewable diesel in 2023. Ethanol, primarily derived from corn, is widely used in gasoline blends (E10, E15, and E85), reducing reliance on fossil fuels. The U.S. Department of Energy projects continued growth due to increasing mandates for renewable fuels and advancements in cellulosic ethanol production.
• Brazil: Brazil, the second-largest ethanol producer globally, produced 8.3 billion gallons in 2023 and is recognized as a leader in sustainable biofuels. The country’s ethanol production is sugarcane-based, making it more efficient and eco-friendly than corn-based ethanol. The Brazilian government mandates 27% ethanol blending (E27) in gasoline, and flex-fuel vehicles (FFVs) dominate the market, enabling greater ethanol consumption. In 2024, Brazil partnered with the International Energy Agency (IEA) to promote biofuel adoption worldwide.
• India: India has significantly scaled up its ethanol production capacity to 1,623 crore liters by 2024, doubling in just four years. Ethanol blending with petrol increased from 1.53% in 2014 to over 13% in 2024, with a target of 20% blending (E20) by 2025. The government’s Ethanol Blended Petrol (EBP) program aims to cut crude oil imports and lower carbon emissions. Significant investments in grain-based and molasses-based ethanol production have been made by Praj Industries, Indian Oil Corporation (IOC), and Bharat Petroleum (BPCL).
• Thailand: Thailand is rapidly expanding its bioethanol and biodiesel production as part of its Alternative Energy Development Plan (AEDP 2018-2037). The country aims to produce 5.3 billion liters of bioethanol by 2025 and 5.5 million tons of biodiesel by 2030. The Biodiesel Blended Diesel (BBD) program is a key policy driver, with incentives for palm oil-based biodiesel production. Thailand’s ethanol sector benefits from investments by PTT Group, Bangchak Corporation, and Thai Oil, ensuring supply chain stability and technological advancements in biofuel production.
• Canada: In 2023, Canada implemented the Clean Fuel Regulations, targeting a 13% reduction in transportation fuel emissions by 2030. The country focuses on expanding bioethanol production from corn and wheat, with new facilities in Ontario and Saskatchewan. Greenfield Global and Suncor Energy are leading biofuel production efforts, with significant investments in low-carbon ethanol for domestic and export markets. Canada is also exploring advanced biofuels and sustainable aviation fuel (SAF) production.
• Indonesia: Indonesia, the largest palm oil producer, increased its biodiesel blend mandate from B30 to B35 in 2023, leading to greater biofuel demand. The government plans to launch E10 ethanol blending in gasoline to diversify its biofuel mix. Companies like Pertamina and Wilmar International are expanding biodiesel refineries to meet domestic and regional demand. Additionally, Indonesia is promoting bioethanol from cassava and sugarcane to enhance energy security and reduce dependence on fossil fuels.
• Kenya & Zambia: Kenya is investing in ethanol production infrastructure, with the State Oil Corporation building a new ethanol plant to meet blending mandates. Zambia’s Sunbird Bioenergy Africa launched a program to develop a cassava supply chain for ethanol production, contributing 100 million liters annually to replace 20% of gasoline consumption. Malawi also targets a 20% ethanol blending rate, with support from regional biofuel initiatives.

Bioethanol Market Segmentation Analysis

By Feedstock

Starch-based feedstocks, particularly corn, currently dominate the global market in revenue. This is primarily due to the abundant availability of corn in key bioethanol-producing regions, especially the United States. Corn's high starch content allows efficient and cost-effective bioethanol production, leading to strong growth prospects for this feedstock. Existing infrastructure and technologies optimized for corn-based bioethanol contribute to widespread use and market leadership. The combination of high starch content and efficient conversion processes solidifies corn's position as a key feedstock for bioethanol production.

By Blend

E10, a blend of 10% ethanol and 90% gasoline, currently captures the largest market share in the global market. This dominance proceeds from several factors. Firstly, the E10 is compatible with most gasoline-powered vehicles today, requiring no modifications. This ease of use makes it a readily accessible option for consumers worldwide. Secondly, many countries have implemented mandates or incentives for using E10, driving its adoption to meet renewable energy targets and reduce greenhouse gas emissions.  This policy support further solidifies E10's market position.

By Application

The transportation fuel segment accounts for the most significant market revenue in the global market. This dominance is primarily driven by the widespread use of bioethanol as a gasoline blend, particularly in blends like E10, which are mandated or incentivized in many countries. The sheer volume of gasoline consumed globally, coupled with the increasing adoption of bioethanol blends to meet renewable energy targets and reduce greenhouse gas emissions, makes transportation fuel the most extensive application for bioethanol. While other applications like power generation, cosmetics, and pharmaceuticals utilize bioethanol, their market volumes are significantly smaller than the massive transportation fuel market.

Company Market Share

The global market is highly competitive and fragmented. While no company holds a dominant market share, several key players contribute to the worldwide supply. Additionally, several regional players and smaller producers contribute to the market, making it relatively diverse. Factors like production capacity, feedstock availability, regional presence, and government policies influence the market share distribution among these companies. As the bioethanol market continues to grow, competition is expected to intensify, with companies focusing on innovation, cost efficiency, and sustainable practices to gain a competitive edge.

Archer Daniels Midland (ADM): An Emerging Player

Archer Daniels Midland (ADM), a major player in agricultural processing, is a dominant force in the global market and is likely to hold the largest market share. A key factor is their significant presence in corn-based ethanol production, especially within the United States (the world's leading bioethanol producer). ADM's extensive infrastructure, substantial production capacity, and widespread distribution network solidify its market leadership.

Recent Developments

• September 2024: LanzaTech and Lanzajet signed a new project with Australia’s Wagner Sustainable Fuels to evaluate the equipping of Wagner’s Brisbane SAF Refinery with the help of the CirculAir platform. LanzaTech and LanzaJet convert waste carbon and renewable power into sustainable aviation fuel (SAF).
• July 2024: TruAlt Bioenergy of India received an order of USD 47.36 million from leading oil marketing companies (OMCs), which includes Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), and Mangalore Refineries and Ports. Under these orders, TruAlt Bioenergy would supply over 60 million liters of 1G bioethanol over three months from August to October 2024

Analyst Opinion

The global bioethanol market is experiencing growth, fueled by rising demand for renewable fuels and supportive government policies. Bioethanol's attractiveness as a cleaner gasoline alternative, combined with advancements in production technology, is driving market expansion. While starch-based feedstocks currently dominate, concerns about food competition are prompting the exploration of sugarcane and cellulosic sources.

Furthermore, the E10 blend leads the market due to its compatibility with existing vehicles, but higher blends are gaining traction. Transportation fuel is the primary application, though power generation and cosmetics also contribute. North America currently leads, but Asia Pacific is emerging as a strong growth region due to rising energy demand and government support. Key players like ADM focus on production capacity and strategic partnerships to compete in this moderately fragmented market, with recent trends emphasizing decarbonization and sustainability.