Bio-alcohol Market By Raw Material (Grains, Sugarcane, Industrial Beets, Biowaste, Others), By Product Type (Bio-ethanol, Bio-methanol, Bio-butanol, BDO), By Application (Transportation, Power Generation, Medical, Others) - Growth, Share, Opportunities & Competitive Analysis, 2018-2026

The bio-alcohol market is expected to reach US$ 13498.8 million by 2026, growing at a 6.6% CAGR from 2018 to 2026. Stringent regulations over automotive emissions, along with demand for greener fuel and long-term energy security to supply energy in accordance with economic developments and environmental needs, are some of the key aspects driving the market's growth. Bio-alcohols are biologically produced alcohols, such as those produced by the fermentation of cellulose, sugar, and starches. The increasing use of biofuels has gained attention as an alternative to fossil fuels. Biofuels are increasingly being used to combat global warming and carbon footprints and are thus emerging as future fuels.Bio-alcohol is mixed with fossil fuels to suppress the emission of harmful gases such as sulfur, carbon monoxide, nitrogen oxide, and ozone. Also, fluctuating crude oil prices are also expected to augment the development of bio-alcohol in the coming years. Asia Pacific is projected to be the fastest-growing region owing to rapid growth in applications such as transportation, power generation, medical, and others. Asia Pacific, as a major automotive hub, continuously demands high-performance products, and the transportation industry, as a major consumer of bioethanol, is expected to drive bioethanol demand over the forecast period.

Market Synopsis

The grains segment will dominate the global bio-alcohol market by raw material.

In 2017, the grains segment dominated the market by value and volume and was expected to maintain its dominance throughout the forecast period. Cereal grains are widely used for food and feed applications; however, the overproduction of cereals and advancements in technology in seed production, tillage, and sowing led cereals to be used as an energy source. Additionally, the staggering rise in automobile production, especially in industrialized nations, provides a robust push for the adoption of ethanol as an eco-friendly fuel in the transportation sector. On the other hand, biomass possesses enormous potential as an energy source, leading to the production of different biofuels, such as ethanol and biodiesel. Owing to its high availability and low cost, biomass is envisaged to provide a significant amount of feedstock for the production of bioethanol in the medium and long term. Feedstock and investment costs affect the economy of scale, as more than 75 percent of ethanol production is dependent on feedstock. The increasing conversion of biomass to ethanol as an alternative market for sugar and grain surplus is influenced by food market conditions. This, in turn, provides significant opportunities for the utilization of biomass in the coming years.

The bio-ethanol segment will dominate the global bio-alcohol product type market.

In 2017, bio-ethanol was the largest market by value and volume and was expected to maintain its dominance throughout the forecast period. Ethanol is the most widely used fuel additive in certain countries. Owing to its higher octane number than ethane, ethanol boosts the octane of fuel. Apart from this, ethanol produced from biomass burns cleanly and leads to little or no contamination of vehicle parts. Multiple car producers are now manufacturing flexible-fuel vehicles (FFVs) that can run on various combinations of bioethanol and petrol, such as up to 100% bioethanol. Emerging uses of bioethanol in energy-oriented applications such as power generation provide lucrative opportunities for market growth. A substantial increase in the blending of gasoline with bioethanol can enhance the life span of diminishing oil supplies and ensure fuel security globally. Bio methanol is expected to be the fastest-growing product type market for bio alcohol, with a value CAGR of 8.6% over the forecast period.

The transportation application exhibits enormous potential for the development of the global bio-alcohol market.

In 2017, transportation applications dominated the market by value and volume and were expected to maintain their dominance throughout the forecast period. As per the Organization for Economic Co-operation and Development (OECD), the transport sector contributes to more than two-fifths of total greenhouse gas emissions (GHG). Currently, biofuels are witnessing stringent demand as an alternative to gasoline, leading to a significant reduction in GHG emissions. Vehicles are the major consumers of conventional fuel, so little modification is required to work with them. Bioethanol and biodiesel are the primary biofuels consumed in the transportation sector. Increasing the use of biofuel as an advanced fuel in engines and other systems to improve vehicle performance and efficiency is expected to spur market growth.

North America dominated the global bio-alcohol market during the forecast period.

North America possesses a huge manufacturing base of bioethanol manufacturers, thus dominating the market share, followed by Latin America. Fluctuating oil prices have provided an incentive to develop biofuels in North America. Apart from this, the 2005 Energy Policy Act and tax reforms have significantly increased ethanol production in the United States. Governmental subsidies over the production of corn (the primary feedstock for ethanol) have led to increased ethanol production. Apart from this, the U.S. Environmental Production Agency (EPA) implemented policies such as the Renewable Fuels Standard (RFS2), which required gasoline in the United States to be mixed with some amount of liquid fuel, spurring the overall consumption of bioethanol. The recent commitment by the US government to triple bio-energy production over the next decade has added impetus to the search for viable biofuels, driving biofuel consumption in this region. On the other hand, Brazil, in Latin America, is the second-largest producer of biofuel after the USA. The growing number of ethanol biorefineries in Brazil, national biofuel policies for fuel production, and rising numbers of gasoline stations are some of the major factors driving the demand for bioalcohol in this region.

BP PLC is one of the most promising players in the bio-alcohol market.

Mergers and acquisitions have been adopted as a key strategy by BP PLC in the global bioethanol market. For example, in March 2017, BP acquired the biomethane business of Clean Energy Fuels Corporation for USD 155 million. Clean Energy Fuels Corporation, based in the U.S., deals with natural gas fuel for transportation in North America. Hence, the acquisition will help the company meet the growing demand for renewable natural gas fuel or biomethane, which in turn is expected to accelerate the growth of this market during the forecast period. Other notable players competing in the bio-alcohol market are BioAmber Inc., Cargill Inc., Fulcrum BioEnergy Inc., BASF SE, DuPont, Mitsubishi Chemical Corp., BP Biofuels, and Genomatica Inc., among others.

Periods of History and Forecast

This research report presents the analysis of each segment from 2016 to 2026, considering 2017 as the base year for the research. The compound annual growth rate (CAGR) for each of the respective segments is calculated for the forecast period from 2018 to 2026.

Report Scope by Segments

The bioalcohol market report presents the current market dynamics along with a quantitative analysis of the global market. The report elucidates the detailed outline of the global bio-alcohol market by categorizing it in terms of application and geography. The objective of publishing this extensive research report is to aid market stakeholders in making better decisions and taking strategic initiatives in the bio-alcohol market.

This research report further describes the major qualitative market assessment factors, including key market trends, market drivers, and market restraints, to aid in a better understanding of the global bio-alcohol market. Each market assessment factor, including market drivers, challenges, and opportunities, is extensively explained, considering the current market scenario. This report graphically maps the market players based on their market initiatives and strategies, product offerings, and business strengths. Furthermore, the report provides an attractive investment proposition based on extensive geographical research.

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