Industrial Alcohol Market Report

Industrial Alcohol Market Analysis, By Product (Ethyl Alcohol, Methyl Alcohol, Isopropyl Alcohol, Isobutyl Alcohol), By Source, By Application, By Region, And Segment Forecasts, 2014 - 2025

Published: November 2017  |  135 Pages  |  Format: PDF  |  Report ID: GVR-2-68038-236-5

Industry Insights

The global industrial alcohol market size was valued at USD 105.89 billion in 2016. Regulatory changes by different governments in various countries across the globe, mandating the use of ethyl alcohol (ethanol) gasoline blend as fuel is the major driving factor. In addition, broad uses of other industrial alcohols such as, methanol, isobutanol, and isopropanol in automobile, personal care, and pharmaceutical applications is further expected to propel the growth over the forecast period.

Industrial/ethyl alcohol is a volatile, colorless, flammable liquid and the most commonly used biofuel in the world. It is derived from various sources such as corn, molasses, and grains. Owing to its low emissions and less intoxicating effects, it can be used in petrol vehicles as a replacement to petrol. It can be blended with petrol to any percentage. It is also used as a solvent, fuel and as a food supplement.

U.S. industrial alcohol market, by application, 2014 - 2025 (USD Million)

U.S. industrial alcohol market

In the U.S., under Renewable Fuel Standard (RFS), the federal government mandated the use of renewable fuels, which is driving the growth of domestic ethanol usage. Accordingly, in 2016, the EPA announced the renewable volume obligations for ethanol of 44.85 billion tons for the year 2017, which is expected to open up tremendous opportunities for ethanol producers. 

The U.S. market was valued at USD 28,166.3 million in 2016 and is anticipated to register a CAGR of 8.4% from 2017 to 2025. The rising demand for fuel grade industrial alcohol in the U.S. is expected to boost the market.

Gasoline is one of the major toxic emitting fuels. In lieu of Clean Air Act, conventional gasoline needs to reduce carbon monoxide in the exhaust gas. As mandated by EPA, Ethanol is the primary additive used in the U.S. to reduce the engine knocking and fuel emission. Refiners are producing conventional gasoline, which has 84 octane value sub-grade gasoline that requires ethanol, which has high octane value, to meet the minimum octane requirements for the U.S. gasoline market.  Ethanol, owing to its high octane value of 113, is the principal enhancer used by refiners, producing regular grade gasoline, to increase octane levels from lower octane blend stocks to superior grades, to improve engine performance.

In April 2014, the European parliament imposed a cap of 7% towards the contribution to the EU Green House Gas (GHG) emission reduction targets from biofuels, which are derived from agricultural crops. The European Union believes that allocating agricultural land for biofuel production reduces the land available for cultivation thus impacting food production. This enactment of act is followed by removal of subsidies to biofuels produced from agricultural land to be implemented from 2020.

Amidst arguments on crop based biofuels production, some European ethyl alcohol associations believe that removing subsidies on crop based biofuels, Europe lost an opportunity of significant investments in first and second generation fuels (non-food based crops) which are now expected to take place out of Europe.

Product Insights

Ethyl alcohol and methyl alcohol, also known as wood alcohol, dominated the market both in terms of volume and revenue. They are the most preferred owing to their wide applications in industrial, pharmaceutical and personal care industries. The U.S. emerged as the largest user of ethanol whereas China is the global leader in methanol consumption.

Apart from methanol and ethanol, isobutanol and isopropanol, which is also known as rubber alcohol are also gaining wide importance owing to their applications in health and chemical industries. Isopropanol is largely used as a solvent and as a cleaner in various industries.

Isobutanol is a medium volatile, colorless liquid used as a solvent and feedstock for synthesis. Pure Isobutanol is converted into derivate such as isobutyl esters that are used as solvents in coating industry. Isobutanol owing to its low viscosity, is mixed with alkyd resin paints as it improves flowability.

Source Insights

Several feedstock are used in the synthesis of ethanol such as starches from corn, molasses, and grains such as cereals, sorghum, and barley. Methanol can be produced from fossil fuels such as coal and natural gas. Renewable sources that are used in the synthesis of methanol include biomass, CO2 from the atmosphere.

In the U.S., corn is the primary crop which serves as a feedstock for most of the domestic ethanol production. However, to meet the domestic requirements of livestock feed, and exports markets, Renewable Fuel Standard (RFS) in U.S. has limited the amount of ethanol produced from crop based feedstock to 44 billion tons.

In Brazil, sugarcane is the major feedstock used which is also the similar case in India. In Canada, agricultural crops, particularly grains are used as they have both high levels of carbohydrates and high productivity needed to manufacture ethanol.

Syn-gas, derived from natural gas, is used as feedstock in the synthesis of methanol. Coal gasification is used across the world to produce syngas which is further converted to methanol. Coal gasification is the major methanol production process used in China, a global leader in methanol consumption. Besides coal gasification, biomass is another major source from which methanol can be produced.

Application Insights

Ethyl alcohol emerged as the largest type of product used in various application. Ethanol is available in various types such as industrial grade ethanol and fuel grade ethanol. Pure ethyl alcohol also known as ethyl alcohol (anhydrous), ethyl alcohol (95) %, neutral grain spirits, is used in food and personal care industries. Specially denatured ethanol is used to manufacture perfumes, cosmetics, tincture of iodine and other products. The largest application of ethanol is as an alternative to fossil fuel.

Chemicals is the largest application for Methanol. Majority of methanol produced is changed to formaldehyde, which is further converted to other products such as plastics, paints, resin-based adhesives, andexplosivesused in the manufacture of wood products and plywood.

Industrial alcohol including ethanol and isopropanol are used as a disinfectant by dissolving lipids and denaturing proteins and destroys various types of viral and bacterial cells. Isobutanol can be used as agricultural chemical intermediate, intermediate for glycol ether and esters, de-icing fluids, anti-corrosion and anti-wear inhibitor in engine oils.

Regional Insights

In terms of volume, North America was estimated as the largest regional market at a CAGR of 6.8% from 2017 to 2025. The North America market was valued at USD 34,155.4 million in 2016 and largely dominated by the U.S. The increased demand can be attributed to the increase in applications such as organic formulations in personal care and pharmaceutical industries, as a clean fuel, and in the processing of food ingredients. The growth of these applications is expected to fuel market demand for the product over the next eight years.

Global industrial alcohol market revenue, by region, 2016 (%)

Global industrial alcohol market

In terms of revenue, Asia Pacific was estimated as the fastest growing region followed by Middle East & Africa in 2016. Asia Pacific held 33.43% share in 2016, and the trend is projected to continue over the forecast period.

Competitive Insights

Competitive rivalry among producers is high as the marketplace is characterized by the presence of large number of players marking their entry at the global level. However, the government mandates to blend ethanol with gasoline is increasing the demand for fuel grade ethanol. This is expected to provide lucrative opportunities for the biofuel producers.

The market is fragmented in nature with the presence of several global and regional players. Major oil & gas companies and chemicals manufacturing companies such as Exxon Mobil Corporation, Royal Dutch Shell Plc, BASF SE, Eastman Chemical Company have also marked their presence in the market.

Manufacturers of ethanol such as HPCL Biofuels Limited use molasses and utilize fermentation, multi-pressure distillation & molecule sieve technologies and market ethanol as environment friendly fuel whereas manufacturers engaged in the production of sugar and its related products, and processing of grains such as Birla Sugar Mills Ltd. and Grain Processing Corporation have expanded their product portfolio by including ethanol to their existing products of sugar, corn and corn based products.

Report Scope 

Attributes

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2015

Forecast period

2017 - 2025

Market representation                         

Volume in Million tons and revenue in USD Million and CAGR from 2017 to 2025

Regional scope

North America, Europe, Asia Pacific, Central & South America, and the Middle East & Africa

Country scope

U.S., Canada, Mexico, Germany, France, China, India, Japan, Brazil and UAE

Report coverage      

Revenue forecast, competitive landscape, growth factors, and trends

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Segments covered in the report

This report forecasts revenue growth at global, regional & country level and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global Industrial Alcohol market on the basis of product, source, application, and region.

  • Product Outlook (Volume, Million Tons; Revenue, USD Million; 2014 - 2025)

    • Ethyl Alcohol

    • Methyl Alcohol

    • Isopropyl Alcohol

    • Isobutyl Alcohol

    • Others

  • Source Outlook (Volume, Million Tons; Revenue, USD Million; 2014 - 2025)

    • Grains

    • Sugar & molasses

    • Corn

    • Fossil fuels

    • Others

  • Application Outlook (Volume, Million Tons; Revenue, USD Million; 2014 - 2025)

    • Food ingredients

    • Fuel

    • Chemicals

    • Pharmaceuticals

    • Personal care

    • Others

  • Regional Outlook (Volume, Million Tons; Revenue, USD Million; 2014 - 2025)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • UK

      • France

    • Asia Pacific

      • China

      • India

      • Japan

    • Central & South America

      • Brazil

    • Middle East & Africa

      • UAE

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