Ethanol Market Size is Expected to grow at higher CAGR 5.9% Over the Forecast Period.
Ethanol is a chemical compound formed by microbial fermentation of carbohydrates or through the process of synthesis using ethylene. It is a clear, colorless, flammable liquid with a pungent odor and smoky taste. Ethanol is also extracted by the process of fermentation of sugar derived from natural sources like sugar cane, grapes, grains, and potatoes.
| Report Metric | Details |
|---|---|
| Base Year | 2021 |
| Study Period | 2020-2030 |
| Forecast Period | 2023-2031 |
| CAGR | 5.9% |
| Market Size | 4210 |
| Fastest Growing Market | Middle East |
| Largest Market | North America |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends |
| Geographies Covered |
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Ethanol is extensively used in the production of alcohol-based beverages, and the rising consumption of alcohol drives market growth. In 2016, the global alcohol consumption was almost 6.4 liters per person aged 15 and above. The debouching trends in the brewery industry and increasing demand for crafted beer among the millennials drive the market growth. As per the Brewers Association, in 2018, the U.S market for crafted beer witnessed a growth rate of 4% by volume and contributed about 13.2% to the U.S. beer market.
As per the International Monetary Fund World Economic, North America ranked first in the world in terms of nominal GDP and second in terms of purchasing power in 2018, which was about USD 19.39 trillion in 2019 and is expected to reach USD 24.53 trillion by 2023. In the U.S., the automobile industry is the backbone of the industrial sector, and the country’s light-vehicle sales accounted for about 17 million units in 2019. The total foreign direct investment in the automotive sector reached USD 115 billion in 2018, further boosting the market growth.
The Middle East is home to one of the largest tourism sectors; in 2018, the region’s international tourist arrival grew by 6%, which is about 1.4 billion tourists. In the UAE, the travel and tourism sector contributed about 5.2% to the country’s GDP in 2016, which was about USD 18.7 billion. The country’s travel and tourism sector employ about 317, 500 people. Thus, rising tourism activities is subsequently boosting the demand for alcohol from hotels and resorts, providing an impetus to the market growth.
The grain-based ethanol reduces greenhouse gas emission by 35–50% compared to gasoline. As per the U.S. Department of Energy, Oregon Department of Environmental Quality, and California Air Resources Board (USDA), the emerging technology in ethanol production has the ability to decrease the emission by almost 70% in the coming years. As per the statistic by CARB, since 2011, the use of ethanol has reduced about 22 million metric tons of GHG from California’s transportation sector. The U.S. is the leading producer of ethanol globally, with the total annual production of around 15,800 million gallons in 2019.
The pharmaceutical industry uses ethanol for the manufacturing of medicinal drugs and syrups, such as Benadryl, Cheracol Plus, Dimetane, Donnatal, Geritol, Novahistine, Robitussin, Sominex, Triaminic, Tylenol, and Vicks. Thus, the rapidly expanding pharmaceutical industry across the globe provides an impetus to the market growth. As per the statistics of the Observatory of Economic Complexity (OEC), the sales of special pharmaceuticals were valued at USD 12.2 billion in 2017.
Rising R&D activities for the development of new medicines and products are subsequently increasing the demand for ethanol. As per the data provided by the European Federation of Pharmaceutical Industries and Associations, the R&D activities in Brazil, India, and China grew by 11.5%, 11%, and 9.4%, respectively. India is one of the largest providers of generic drugs across the globe, and the rapid expansion of the pharmaceutical sector drives market growth. In 2017, the Indian pharmaceutical industry witnessed about 46 merger and acquisition deals worth USD 1.47 billion. As per the IBEF, in October 2018, the Uttar Pradesh State (India) government announced to launch six pharma parks in the state worth about USD 712–855 million.
