Denatured Alcohol Market

Market Overview

The global Denatured Alcohol Market size is expected to grow at an 7.2% CAGR during the forecast period.

Denatured alcohol, commonly known as a methylated spirit, is a spirit that contains 70-99% ethyl alcohol. The high level of ethanol content present in these spirits makes them unfit for human consumption. In the diluted form, denatured alcohol can be used for a wide range of household applications such as general cleaners or sanitizers. It also works as a stain remover, glass cleaner, pest exterminator, and mold remover.

The growing demand for bioethanol, coupled with rising awareness regarding health and hygiene, is anticipated to be the key factor favoring the market's growth during the forecast period. Additionally, the growing adoption of denatured alcohol fuel additive in the automotive industry and as a fuel for camping stoves is anticipated to influence the market's growth during the forecast period positively.

However, the potential health risk associated with the inhaled, ingested, or chronic exposure of these alcohols, such as irritation to the respiratory tract, headaches, gastritis, and in acute cases, death, are some of the concerning factors that are expected to hamper the growth of the market during the forecast period.

Market Dynamics

Increasing Demand and Greater Need for the Product as a Cleaning Solvent

In recent years, the importance of cleanliness and hygiene has increased in commercial and residential sectors, primarily driven by the growing health and hygiene-related concerns among individuals. This demand has further led to continuous product innovation, with an increasing number of companies extending their product portfolio, which has revolutionized the market.  The fastest expanding demand for this cleaning solvent is in less mature, developing world markets, which includes the markets of China, India, Indonesia, and Argentina where the rising populace, improving GDP per capita, changing lifestyle, and growing awareness among the individuals regarding their health and hygiene have been the key drivers.

Additionally, the arrival of eco-friendly and sustainable cleaning solvents drives the market as individuals are getting more inclined towards cleaning products that contain 'natural' ingredients, avoid the use of harmful chemicals, and have a minimum contribution to the carbon dioxide emission during their manufacturing and use. This megatrend is majorly witnessed in the premium household cleaning products, particularly in the developed markets of the U.K., the USA, Germany, and Japan.

Rising Environmental Concerns Coupled with Continues Efforts to Improve the Fuel Efficiency

Ethanol-gasoline blends have higher octane levels than pure gasoline, owing to which these blends burn cleaner than the normal gasoline. Thus, resulting in higher fuel efficiency and lower CO2 emissions. And since global warming has become a major concern worldwide. Many international and environmental agencies across various regions are taking various initiatives to curb the pollution rate and GHG emissions by imposing stringent regulations that mandate the consumption of cleaner fuels and fuel additives. And as denatured alcohols made from the biomass such as corn and sugarcane are considered cleaner fuel additives than the conventional ones. It can be foreseen that this shift in the trend towards cleaner fuels will tend to push the demand for denatured alcohol in the upward trend across the regional market in the near future.

This industry trend is further compelling; the manufacturers engaged in the denatured alcohol business innovate new blends of ethanol and gasoline that can further improve the burning efficiency of conventional fuels. Thus, driving the growth of the market.

Growing Stringent Regulation Imposed on Manufacturing Along with Rise of the EVs

As there is a potential health risk associated with the inhaled, ingested, or chronic exposure of these alcohols, such as irritation to the respiratory tract, headaches, and gastritis. Various government agencies such as the European Union and the Federal government have imposed specific regulations regarding manufacturing these alcohols, assuring that these alcohols are made unfit for human consumption and distributed through certified distributors. Thus, these stringent regulations discourage new entrants willing to enter the market and limit the market growth opportunity.

Also, as a fuel additive is the most prominent application of denatured alcohols, the rise of EVs in recent years is driven by the desire to decrease dependency on conventional fuels and growing awareness of the worsening climatic conditions the shifting inclination and towards sustainable energy sources.

Figure 1: Global Electric Car Stock, 2013-2018

Source: IEA

The figure depicted represents the growth of EVs from 2013-2018. This significant growth in the demand for EVs is further anticipated to rise in the years to come in, and as this trend continues, it can be foreseen that it will hinder the growth of the denatured alcohol market.

Segmental Analysis

Industrial Denatured Alcohol (IDA) to Dominate the Global Denatured Alcohol Market

IDA is also known as partially denatured alcohol, a mixture of 95 parts by volume of alcohol and five parts by volume of wood naphtha, or a substitute for wood naphtha. As the name infers, these alcohols are used across the industrial sector. They are used in the formulations and manufacturing of end-user products such as cosmetics, perfumes, personal hygiene products, bio-fuels, paints, inks, and solvents.

IDA segment is projected to dominate the global denatured alcohol market during the assessment period. The key factors favoring the growth of the segment are rapid industrialization and globalization, further supported by the government of various economies, particularly in developing economies such as India and China. This rapid industrialization across these economies is expected to bolster the growth of the various end-use industries. And consequently, progress the demand for denatured alcohol in the market.

Completely Denatured Alcohol (CDA)

CDA consists of 90 parts by volume of alcohol, 9.5 parts by volume of wood naphtha, a substitute for wood naphtha, and 0.5 parts by volume of crude pyridine. The CDA segment holds an essential share in the global denatured alcohol market and is primarily used as burning alcohol for heating and cooking. CDA is thoroughly denatured that the denaturants used in these alcohols are inseparable, which makes them unfit for any other industrial applications.

By Application

• Cleaning Solvent

The cleaning solvent segment is anticipated to be the largest and the fastest-growing segment for the denatured alcohol market during the assessment period. This segment's growth can be attributed to the anti-bacterial property of denatured alcohol, making it an ideal cleaning agent. Additionally, this solvent's multi-functionality to clean various hard surfaces, including wood, plastic, and glass and dissolve grease and stains, gives the upper hand over the other cleaning agent available in the market.

The growing awareness among the individuals regarding their hygiene and increasing cases of overspread infectious diseases worldwide has fostered the cleaning solvent's growth in the market.

• Cosmetics

Denatured alcohol for use in cosmetics contains water and a bittering agent. The anti-bacterial properties of denatured alcohol provide a vital preservative system to these cosmetics that inhibit pathogens' growth. Thus, making it one of the most natural preservatives for cosmetic use. Additionally, many manufacturers use denatured alcohol in the cosmetics formulation to avoid paying taxes on cosmetics, as it is considered tax-free alcohol.

The continuously rising number of geriatric populaces, changing lifestyle, improving consumer spending, increasing pollution levels, and continuous breakthroughs in natural cosmetic products have boosted the demand for cosmetic and personal care products. And it can be foreseen that as this demand grows, it will also increase the denatured alcohol market.

Regional Analysis

• Asia-Pacific

Asia-Pacific is accounted for the largest share of the global denatured alcohol market in 2019 and is expected to follow the same trend in the years to come. The growth of the regional market can be attributed to being one of the largest regions with an adequate agricultural land area that offers an abundance of agricultural livestock needed for the production of this denatured alcohol. Thus, making the region the largest producer of denatured alcohol.

Additionally, two of the most dynamic and populace economies – China and India significantly consume these denatured alcohols as a cleaning solvent in household and industrial applications. The urbanization across the regional market grows along with the disposable income and increasing concern regarding health and hygiene. It can be stated that it will further lead to the rise in the demand for cleaning solvents and, consequently, will thrive in the denatured alcohol market.

• Europe

Europe holds a prominent share in the global denatured alcohol market. The key factor favoring the regional market's growth is the regional market's well-established pharmaceutical and cosmetic industry. Europe has the largest cosmetic industry with a vast majority of more than 500 million customers, which is ever-growing, and that is now more inclined towards transparent and natural products. This change in consumer sentiments is further compelling the manufacturers in the industry to innovate cosmetic products through rigorous investment in their R&Ds and use of natural preservatives such as denatured alcohol to formulate their cosmetic products.

Additionally, global warming has become a significant concern. The government in the region takes various initiatives to bring down the pollution rate and GHG emissions by imposing stringent regulations that mandate cleaner fuels and fuel additives. And as denatured alcohols are considered cleaner fuel additives as compared to the conventional ones. It can be foreseen that this shift in the trend towards cleaner fuels will tend to push the demand for denatured alcohol in the upward trend across the regional market in the near future.

Denatured Alcohol Market Segmentation

By Type

• Completely Denatured Alcohol (CDA)
• Industrial Denatured Alcohol (IDA)
• Trade Specific Denatured Alcohol (TSDA)

By Application

• Cleaning Solvent
• Fuel/Fuel Additive
• Food and Beverages
• Personal Care
• Pharmaceutical
• Others

By Region

North America

• The U.S.
• Canada
• Mexico

Europe

• Germany
• France
• The U.K
• Italy
• Rest of Europe

Asia-Pacific

• China
• Japan
• India
• South Korea
• Australia
• Rest of Asia-Pacific

Central and South America and the Caribbean

• Argentina
• Brazil
• Colombia
• Rest of Central and South America and the Caribbean

Middle East

• Saudi Arabia
• The U.A.E
• Qatar
• Oman
• Turkey
• Rest of Middle East

Africa

• Nigeria
• South Africa
• The Rest of Africa