by Industrial alcohol refers to alcohols produced on a large scale, primarily for use in industry and science, rather than as consumable beverages. Common types include ethanol, methanol, and propanol. Ethanol is widely used as a solvent and fuel alcohol. Methanol is a key raw material in producing biodiesel, solvents, and anti-freeze. Propanol is used to produce cleaning products, perfumes, and disinfectants. With growing industrialization and manufacturing activity, demand for various industrial alcohols is increasing steadily.
The Industrial Alcohol Market is estimated to be valued at US$ 180.75 Bn or Mn in 2023 and is expected to exhibit a CAGR of 10.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The global industrial alcohol market is primarily driven by the expanding use of alcohols in fuel blending and as chemical intermediates. Ethanol demand is surging for blending gasoline to reduce vehicle emissions and improve fuel efficiency. Per U.S. and EU regulations, up to 10-15% of gasoline must contain ethanol. Additionally, mounting production of biodiesel globally, which uses methanol in the manufacturing process, is fueling market growth. Methanol production has increased significantly in recent years with expansion of biodiesel manufacturing capacity. Further, rapid industrialization and growth of various end-use industries including pharmaceutical, chemical, personal care is propelling the need for industrial alcohols as solvents, feedstock, and extraction agents. Propanol demand is witnessing a noticeable rise with its increasing application as a cleaning agent, fragrance ingredient, and disinfectant.
Segment Analysis
The industrial alcohol market is dominated by ethyl alcohol also known as ethanol. Over 60% of the industrial alcohol market comprises of ethanol. It is primarily used as an ingredient in automobile fuel blends, chemical products manufacturing like solvents, and as consumable alcohol in beverages. Ethanol has gained dominance due to its widespread applications coupled with support from government policies in many countries promoting blending of ethanol in vehicle fuel to reduce emissions.
PEST Analysis
Political: Many governments provide subsidies and tax benefits for production and use of biofuels like ethanol to reduce import dependence on petroleum and fight climate change. Economic: Cost effectiveness of ethanol as a fuel oxygenate and industrial solvent is driving growth. Being derived from renewable agricultural sources, it provides income to farmers. Social: Increasing awareness about environmental protection is positively impacting the market. Ethanol produces less toxic emissions compared to other fuel alternatives. Technological: Recent technological advances have improved yield and productivity for ethanol production from grains as well as non-food feedstocks.
Key Takeaways
The global industrial alcohol market is expected to witness high growth, exhibiting CAGR of 10% over the forecast period, due to increasing blending of ethanol in automobile fuels to meet renewable volume obligations. The market size for 2023 is estimated at US$ 180.75 Bn.
North America dominates the industrial alcohol market currently accounting for over 40% of global sales, led by the U.S. Stringent renewable fuel standards and presence of major ethanol producers in the region will aid market growth.
Key players operating in the industrial alcohol market are BASF SE, BIRLA SUGAR, CARGILL INCORPORATED., CRISTALCO, FLINT HILLS RESOURCES, GREEN PLAINS INC., GREENFIELD SPECIALTY, MGP INGREDIENTS INC., SIGMA ALDRICH, and THE ANDERSONS INC. Leading players are investing in capacity expansions and product line extensions to strengthen their market position.
