Ethanol Market Size, Share, Growth, Trends, and Global Industry Analysis: By Type (Synthetic Ethanol, Bioethanol), By Raw Material (1st Generation Feedstock, 2nd Generation Feedstock, Others), By Application (Transportation, Energy, Chemical, Others), and Region Forecast 2020-2031

Ethanol Market size was valued at US$ 99.9 billion in 2024 and is expected to reach US$ 157.5 billion by 2031, growing at a significant CAGR of 6.7% from 2025-2031. The ethanol business is the global trade of the production, supply, and consumption of ethanol, an alternative biofuel that is producible primarily from starch and sugar crops such as sugarcane, wheat, and corn.

The market for ethanol is driven by increasing demand for biofuels due to the fact that governments around the world are implementing measures to reduce greenhouse gas emissions. Ethanol is widely utilized as an additive in fuel, primarily gasoline blends, to deliver higher octane values and lower carbon emissions. Increasing application of ethanol in industrial usage, drugs, and personal care products is also driving the market growth. Besides, advanced technology in ethanol manufacturing, like cellulosic ethanol from non-food biomass, is making processes more efficient and sustainable.

However, the industry is at a disadvantage due to factors like fluctuations in corn and sugarcane raw material costs and their application as dominant feedstocks. Environmental concerns due to large-scale cultivation and land use change become a concern too. Regulatory risks and replacement by alternative biofuels, like biodiesel, could influence market growth. Though such are the drawbacks, sustained R&D are sure to improve the efficiency of the process of producing ethanol and broaden its applications.

Facts & Figures

• In 2023, global ethanol fuel production was 112.0 gigalitres (2.96×10^10 US gallons), with the United States and Brazil being the leading producers.
• The U.S. produced over 15 billion gallons in 2021 and 2022.
• Melting Point: -114.1°C
• Boiling Point: 78.5°C
• Density: 0.789 g/ml at 20°C
• Flammable: Ethanol is a flammable liquid.

Key Developments:

• In July 2024, CF Industries Holdings, Inc., a prominent global producer of hydrogen, nitrogen products, and ammonia, has partnered with POET LLC, a major producer of biofuel and sustainable bioproducts, to explore the use of low-carbon ammonia fertilizer in a pilot project aimed at decreasing the carbon intensity associated with corn production and ethanol. The demand for ethanol that meets lower carbon intensity standards is anticipated to rise substantially in order to comply with low-carbon fuel regulations.
• In March 2024, Alto Ingredients, a leading producer and distributor of renewable fuels and essential ingredients, and one of the largest specialty alcohol producers in the U.S., announced that it has entered into an exclusive, non-binding letter of intent with Vault 44.01 (Vault). The two companies finalized definitive agreements for a carbon capture and storage (CCS) project at Alto’s Pekin campus in Pekin, Illinois. Under the terms of the letter of intent, Alto will install technology to capture carbon dioxide (CO2) emissions produced during the ethanol manufacturing process at its Pekin facility.

Ethanol Market Segmentation:

Based on the type:

• Synthetic Ethanol
• Bioethanol

The synthetic segment held the largest market share and is anticipated to retain its position during the forecast period. The method of manufacturing synthetic products using petroleum-based raw materials is well established and keeps the production cost lower compared to renewable products.

Based on the raw material:

• 1st Generation Feedstock
• 2nd Generation Feedstock
• Others

The 1st gen feedstock segment is likely to dominate and develop favorably over the forecast period. It is generated from food crops such as corn, sugarcane, wheat, and sugar beets, by employing straightforward fermentation methods. Its use is increasingly getting adopted as a biofuel for gasoline blending, for lowering greenhouse emissions and fossil fuel dependency. First-generation ethyl alcohol growth is spurred by existing production facilities, government requirements for ethyl alcohol-blended fuel, and high energy returns from sugarcane crops.

Based on the application:

• Transportation
• Energy
• Chemical
• Others

Transportation segment to dominates the market share. Growth is due to increasing product demand in transportation, primarily driven by government mandates like Renewable Fuel Standards (RFS) in the U.S., EU directives, and blending requirements in new markets like India and Brazil. In addition, increasing environmental consciousness and preventing air pollution will enhance the demand for ethyl alcohol-blended fuels.