Global ethanol market is expected to witness significant growth owing to increasing demand from end-use industries such as food & beverage and bio-fuel. It is a prominent alcoholic beverage which is found in cider, beer, spirits, wine and ale. Increasing alcohol consumption in Europe and North America is expected to drive market growth over the next seven years. Changing lifestyle coupled with increasing western culture demand in Asia Pacific is anticipated to drive alcohol demand in the region. This factor is expected to compliment market growth over the forecast period.
Growing automotive industry is expected to be the key driving force for market growth over the next seven years. Ethanol is widely used as fuel or fuel additive in automobile industry. Increasing disposable income coupled with population expansion is expected to drive automotive sales and increase ethanol demand. Rising environmental concerns is expected to benefit demand for ethanol as fuel additive. Major economies have revised their regulations in order to promote ethanol usage as bio-fuel in automotive industry.
Technological innovations along with low cost feedstock are expected to drive global market growth. Industrial methylated spirits derived by adding methanol to ethanol finds application as a solvent in chemical industries and in domestic burners for cooking and heating. Intake of ethanol along with denatured alcohol is fatal and is soporific in nature. These properties are expected to hamper market growth and pose challenges to industry participants. In 2007, globally share of automotive needing liquid fuel was 100%. It is expected to reduce by more than 3% by 2020. Emerging use of hybrid fuel engine is expected to challenge market growth over the next seven years.
Increasing demand from fuel cells application is projected to propel market growth over the forecast period. Commercial fuel cells function on methanol, reformed natural gas and hydrogen. Ethanol is an alternative owing to properties such as low cost & toxicity, wide availability and high purity. Extensive R&D is being undertaken on auto-thermal reforming systems, thermally integrated systems and direct-ethanol fuel cells for commercial feasibility.
Application market segmentation includes transportation, textiles, food safety, environment, communication, housing, recreation, health & hygiene, bio-medical, agriculture and others. Major demand is from transportation application. Market is segmented on the basis of source into corn starch, sugarcane, rapeseed, wheat, rice and soy bean. U.S. uses corn starch at a dominant rate and South America use sugarcane as feedstock. Europe ethanol market is sourced from rapeseed crop.
North America emerged as the leading regional market owing to the use of ethanol as fuel instead of conventional fuels. Stringent government regulations promoting bio-fuel usage to limit environment pollution is expected to drive market growth in the region. Asia Pacific market is expected to grow at significant rate owing increasing demand from automotive industry. Rising environmental concerns along with maturing oil & gas wells are expected to drive regional market growth. Ethanol market growth is expected to raise demand for cultivation of plants such as jetropa and corn. This is expected to boost rural economy in emerging economies of Asia pacific such as China, India, Thailand, Japan and Vietnam. Europe is expected to exhibit high growth rate owing to regulations in automotive fuel adulteration. Brazil is the world largest exporter of ethanol followed by the U.S. Abundant livestock availability in Latin America is projected to fuel market growth in the region.
Major players in ethanol market include companies such as United Breweries, AB Miller, Aventine renewable Energy, Archer Daniels Midland Company, Pure Energy Inc Kirin British Petroleum, Cargill Corporation, The Andersons Inc., VeraSun Renewable Energy, Stake Technology, Alternative Energy Sources, Diago, Heineken, Advanced Bioenergy LLC and Pernod Richard. Consumer acceptance for eco-friendly products is expected to provide great opportunity for major players in the market. In addition, government support for eco-friendly sources & processes is expected to nurture market players to expand their market share.
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