Bioethanol is one of the main fuels utilized as a substitute for gasoline in road transport vehicles. Energy or fuel crops are the primary sources of sugar needed to make bioethanol. These crops include sugarcane, corn, wheat, and many more. However, the use of municipal solid wastes to create bioethanol fuel is the current focus of research and development activities. Bioethanol is replacing lead as an octane enhancer in petrol. Using bioethanol, some of these emissions can be decreased as the fuel crops absorb the CO2 released during growth.
Read Report Overview: Transportation Grade Bioethanol Market
The transportation grade bioethanol market is expected to grow at a healthy growth rate, as many countries have mandated using bioethanol fuel blends to reduce greenhouse gas (GHG) emissions and increase vehicle fuel efficiency. For instance, the Canadian Clean Fuel Standard requires liquid fuel suppliers to gradually reduce the carbon content of fuels they produce and sell in Canada. This results in a reduction of CO2 emissions to approximately 13% of liquid fuels used in Canada by 2030. In addition, by 2025, India intends to have 20% ethanol blended into petrol. In Europe, the mandatory directives supporting bioethanol consumption are the Renewable Energy Directive 2009/28/EC (RED), the Fuel Quality Directive (2009/30), and the Biofuels Directive (2003/30). Therefore, these initiatives and directives are influencing the global bioethanol market size. Furthermore, according to the Organisation Internationale des Constructeurs d'Automobiles (OICA), global automotive production increased by 3% in 2021 compared to 2020, further complementing the liquid biofuels market, including the bioethanol and biodiesel market.
The use of bioethanol in the transportation sector is rising due to the blending mandates by various regulatory bodies, such as the Renewable Energy Directive (EU RED) and Renewable Fuel Standard. In addition, advanced technologies and rising R&D for the production of ethanol from algae are expected to drive market demand.
In 2021, the passenger vehicles segment dominated the overall transportation grade bioethanol market in terms of value and volume, and it is expected to continue dominating till 2031. This projected remarkable growth share is attributed to the growing demand from increasing blending mandates and sales of passenger vehicles. Passenger vehicle segment is expected to lead the market as utilization of bioethanol fuel is anticipated to increase globally.
The global market for transportation grade bioethanol, based on raw materials, is categorized into sugarcane, corn, wheat, and others. Sugarcane is expected to dominate the market over the forecast period (2022-2031). Sugarcane is one of the most widely grown agricultural crops globally. Sugarcane molasses is a byproduct of sugarcane products that are utilized to make bioethanol.
The transportation grade bioethanol market holds a prominent share in various regions/countries such as North America, China, Asia-Pacific and Japan, and Europe. North America led the transportation grade bioethanol market in 2021 and is anticipated to uphold its dominance throughout the forecast period (2022-2031), owing to the presence of a significant players such as Archer-Daniels-Midland Company, POET LLC, BlueFire Renewables Inc., Aemetis, Inc, and among others. The transportation grade bioethanol market is majorly driven by stringent government regulations on carbon emissions, technological advancements, and increased adoption of greener technologies, which is anticipated to fuel the growth of the market during the forecast period (2022-2031).
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Recent Developments in Transportation Grade Bioethanol Market
- In December 2021, Gujarat Alkalies and Chemicals Ltd. and GAIL India signed an agreement to set up a $135.2 million (?1,000-crore) bioethanol plant in Gujarat.
- In June 2021, Rayonier Advanced Materials Inc. entered into a long-term off-take (sales) agreement to purchase 2G bioethanol from a petrochemical company and planned to fund a large amount of its investment using low-cost green loans.
- In June 2021, ASN Fuels Pvt Ltd. announced to focus on finding new avenues to make ethanol from agricultural waste termed lingo-cellulosic biomass in partnership with IIT-Tirupati.
