The global fuel ethanol market size was valued at USD 100.9 billion in 2023 and is projected to reach USD 144.3 billion by 2030, growing at a CAGR of 5.1% from 2024 to 2030. This steady growth is primarily driven by the rising demand for renewable fuels, increasing environmental concerns, and regulatory frameworks that mandate a shift away from conventional fossil fuels. Additionally, the rapid expansion of the automotive industry, powered by advancements in science and technology, has heightened challenges related to air pollution control, thereby reinforcing the need for cleaner fuel alternatives like ethanol.

Fuel ethanol offers several advantages, including improved fuel economy and enhanced thermal efficiency, which are expected to accelerate its adoption over the forecast period. To reduce carbon emissions from gasoline use in the automotive and transportation sectors, ethanol is increasingly being blended as a bio-based additive. For example, in 2022, the Ministry of Petroleum and Natural Gas (Government of India) reported that carbon emissions had been reduced by 318.2 lac tons over the past eight years through the adoption of biofuels, highlighting ethanol’s tangible environmental benefits.

Furthermore, continuous advancements in production technologies have made fuel ethanol more scalable and cost-effective. Breakthroughs in converting cellulosic biomass into ethanol are creating new opportunities for the market. For instance, in March 2024, Blue Biofuels Inc. successfully utilized its cellulose-to-sugar technology on a pilot line to produce commercial-grade cellulosic ethanol from biomass. Such technological innovations are expected to play a pivotal role in driving future growth, enabling wider commercialization and reducing dependence on traditional fossil-based energy sources.

Key Market Trends & Insights:

• The North America fuel ethanol market emerged as the leader in 2023, holding the largest market share of 56.4%. This dominance can be attributed to supportive government policies, strong production capacities, and the widespread adoption of ethanol-blended fuels across the region.

• Within North America, the U.S. fuel ethanol market played a crucial role, accounting for 48.4% of the global market share in 2023. The country has a well-established ethanol production infrastructure, supported by abundant availability of corn as a raw material, and favorable regulatory frameworks that encourage the use of ethanol to reduce greenhouse gas emissions and reliance on traditional fossil fuels.

• By product type, the starch-based ethanol segment dominated the market, representing a 75.2% share in 2023. The wide availability of feedstock such as corn and wheat, coupled with cost-effectiveness and established processing technologies, has reinforced the dominance of starch-based ethanol in global production.

• In terms of technology, the wet mill segment accounted for the largest share of 90.6% in 2023. Wet milling allows for the efficient separation of multiple value-added products, including ethanol, corn oil, and animal feed, making it the preferred technology among large-scale ethanol producers.

• By application, the conventional fuel vehicles segment led the market with a share of 83.2% in 2023. The high demand for ethanol-blended fuels in traditional gasoline-powered vehicles, combined with government mandates for blending requirements, has driven the adoption of ethanol in this segment.

Order a free sample PDF of the Fuel Ethanol Market Intelligence Study, published by Grand View Research.

Market Size & Forecast:

• 2023 Market Size: USD 100.9 Billion

• 2030 Projected Market Size: USD 144.3 Billion

• CAGR (2024-2030): 5.1%

• North America: Largest market in 2023

• Asia Pacific: Fastest growing market

Key Companies & Market Share Insights:

Some of the key companies operating in the fuel ethanol market include Braskem S.A., BP Plc, Cargill Incorporated, and INEOS. These market leaders are actively working to enhance their revenue streams by introducing new products, forming strategic collaborations, and adopting various other business expansion strategies aimed at strengthening their global footprint.

Cargill Incorporated, a U.S.-based company, plays a significant role in the ethanol industry with multiple production facilities. The company continues to invest heavily in innovative technologies designed to transform corn biomass into a wide range of sustainable products, aligning with the global shift toward renewable energy. To further expand its global presence, Cargill established a production plant in Fort Dodge, Iowa, which has a production capacity of 115 million gallons of corn-based ethanol per year. This development not only supports the company’s growth strategy but also contributes to meeting the rising demand for biofuels in domestic and international markets.

Similarly, HPCL Biofuels Limited, an India-based company, focuses its ethanol production primarily on supplying to oil marketing companies for blending with gasoline under the country’s Ethanol Blending Program. The company emphasizes environmentally responsible operations by implementing zero-effluent discharge practices and maximizing the use of renewable energy sources. This approach highlights HPCL Biofuels’ commitment to sustainability and its role in reducing dependency on fossil fuels while supporting India’s clean energy transition.

Key Players

• Braskem S.A.

• BP Plc

• Cargill Incorporated

• INEOS Group Limited

• HPCL Biofuels Limited

• LyondellBasell Industries Holdings BV

• Mitsubishi Chemical Corporation

• SABIC

• Sasol Limited

• Solvay SA

Explore Horizon Databook – The world's most expansive market intelligence platform developed by Grand View Research.

Conclusion:

The fuel ethanol market is experiencing solid growth, bolstered by increasing demand for renewable fuels, heightened environmental awareness, and stringent regulations encouraging a transition from fossil fuels. Technological advancements, particularly in production processes, along with expanding applications across traditional vehicle segments, are further amplifying market growth. North America, driven largely by the U.S., remains the dominant region in the sector.