Market Trends of Ethyl Alcohol (Ethanol) Industry
This section covers the major market trends shaping the Ethyl Alcohol (Ethanol) Market according to our research experts:
Automotive and Transportation Segment to Dominate the Market
- Crude oil and natural gas were significant energy sources for the automotive industries for many decades. Due to the negative environmental impact of the increasing consumption of crude oil and natural gas worldwide and the high prices of crude oil, biofuels, such as bioethanol, are considered viable alternatives to crude oil and natural gas as fuel for the automotive industries.
- Ethanol is the cheapest additive to petrol. It helps in reducing the cost for manufacturers and consumers. The ethanol market is directly affected by fuel consumption.
- Ethanol helps to reduce the emission of air toxins, carbon monoxide, particulate matter, nitrous oxides, and exhaust hydrocarbons by displacing aromatics in petroleum products.
- According to the Renewable Fuels Association, the United States is the world's largest fuel ethanol producer. The country produced 15 billion gallons of biofuel in 2021.
- Further, according to the Renewable Fuels Association, Brazil is the world's second-largest producer, with 7.5 billion gallons produced in 2021. Additionally, Brazil is one of the world's major biofuel markets, with specially developed flexible-fuel vehicles that run on fuels with a higher ethanol percentage than standard motor vehicles.
- Hence, all such trends in the market are likely to drive the ethanol demand in the automotive and transportation segment during the forecast period.
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North America Region to Dominate the Market
- The North American region dominated the global market share. Stringent regulations toward reducing fossil fuel usage and rising demand from the food processing industry are driving the ethanol demand in the region.
- The government in the countries such as the United States, Canada, and Mexico, is focusing on reducing fossil fuel usage and the pollution caused by them.
- In this regard, the region is resorting to ethanol-blended fuels, which is one of the major factors driving the ethanol market growth in the region.
- According to the Ethanol Producer Magazine, Poet Biorefining is the largest ethanol producer in the United States. As of December 2021, the company had an ethanol production capacity of 2.7 billion gallons per annum across 33 plants in the Midwest, supporting the market growth in the region.
- According to US Energy Information Administration, the United States fuel ethanol production capacity was 17.5 billion gallons per year as of January 2021, representing an increase of 0.2 billion gallons per year compared to the previous year. Thus, increased ethanol production and consumption capacities will likely boost ethyl alcohol demand.
- Hence, all such market trends are expected to drive the demand for ethanol in the region during the forecast period.
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