Industrial Alcohol Market Overview:
Industrial Alcohol Market was valued at USD 154.59 Billion in 2021, registering a CAGR of 8.1%during the forecast period (2022-2030), and the market is expected to be worth USD 311.61 Billion by 2030.
Industrial alcohol is majorly distilled ethyl alcohol (ethanol) in pure form it is colorless flammable liquid (boiling point 78.5°C) with a pleasant unearthly odor and a burning taste. It has various applications across industries like food processing, fuel, chemical intermediates, medical and others. To be specific in medical industry it is used in the manufacturing of antiseptics, compound tonics, syrups, tinctures, and liniments. Additionally in development of pharmaceuticals like chloroform, and barbiturates. Moreover, apart from ethyl alcohol. Methyl alcohol and Isopropyl Alcohol are also examples of industrial alcohols.
One of the major upcoming driver for ethanol is its use as a biofuel. Ethanol is mixed with petrol and is used as a fuel in automobiles currently 10 % volume of ethanol could be mixed without hampering the fuel attributes. For instance, according to The Ministry of Petroleum & Natural Gas (INDIA), the government had set targets to achieve the target of 20% ethanol blending in petrol by year 2030. Brazil has done wonders in ethanol blending and is considered world’s first biofuel economy. Major countries are taking such steps to reduce their dependency on foreign energy imports and to strengthen their foreign reserves. These positive biofuel consumption trends are anticipated to amplify the Industrial Alcohol Market statistics. Thus, such multifaceted application in various end-use industries is always expected to increase the constant demand for ethanol.
Market Dynamics:
Driver:
- Rising demand from food industry :
Ethanol has very crucial role in the food and beverage industry as it is used as an input for developing food colors and flavonoids. One of the well-known vanilla extract is made by infusing vanilla beans with ethanol.
- Rising adoption of ethanol as a biofuel by blending with petrol:
Governments all over the world have set progressive targets for ethanol blending in order to reduce foreign energy dependence. Moreover, fossil fuels are scarce thus ethanol blending seems to be effective measure to ensure continuous energy supply.
- Demand from paint and coloring industry :
Rising demand for real estate in developing economies have resulted into large scale construction. These newly constructed projects perquisite high volumes of paints which have ethanol as a crucial raw material.
- Pharmaceutical industry and positive growth in hygiene practices:
Ethanol has several important roles in pharmaceutical industry in terms of producing anesthetics antiseptics, syrups, and tinctures. Furthermore, after the pandemic a positive trend could be witnessed in the use of sanitizers and disinfectants which are entirely based on ethanol.
Restraint:
- Smoke and toxic chemical discharge from ethanol production:
This is one of the major criticism faced by ethanol manufactures. Various government departments and eco conservative organizations have multiple times tried to impose bans and production limitations. Which have resulted into strict governments regulations for ethyl alcohol production.
- Negative effects on automotive vehicle engine’s efficiency:
Some of the vehicle manufactures have argued that higher concentration of ethanol blend into the primary fuel will impact the efficiency moreover will harm the engines life in the long run.
- Shrinking arable land :
Ethanol is majorly produced by fermenting crops like corn and sugarcane which prerequisite vast plots of land. Rising demand of real state had pushed the rates of land to sky. This trend is likely to continue in coming years which makes this a major constraint for this industry because as high land prices will result into huge opportunity cost loss.
COVID-19 Impact:
Initially COVID pandemic had negative impact on the industrial alcohol market. The reasons were government restrictions which were imposed in order to reduce the virus spread. Due to these restriction the global supply chain was interrupted which resulted cessation of manufacturing activities in end use industry owing to the raw material shortage. Moreover, these restrictions also impacted the industrial alcohol manufactures. As labor shortages and supply chain interruption caused delay in grain supply which was the primary raw materials for alcohol production. But in retrospect the impact turned out to mild the reason being surge in industrial alcohol demand due to higher utilization of sanitizers and disinfectants in domestic households.
Industrial Alcohol Report Coverage:
| Report Attributes | Report Details |
| Study Timeline | 2016-2030 |
| Market Size in 2030 (USD Billion) | 311.61 Billion |
| CAGR (2022-2030) | 8.1% |
| By Type | Ethyl Alcohol, Methyl Alcohol, Isopropyl Alcohol ,and Others |
| By Source | Grains, Corn, Sugarcane , Molasses |
| By Application | Fuel, Food Ingredient, Chemical Intermediates, Pharmaceutical, Personal Care and others. |
| By Geography | North America, Europe, Asia Pacific
Latin America, Middle East and Africa |
| Key Players | basf, Sigma Aldrich, Flint Hills Resources, Greenfield Specialty Alcohols, Birla Sugar, The Andersons Inc., Grain Millers Inc., Mgp Ingredients Incorporated, Cristalco Sas, Cargill Inc. |
Market Segmentation:
By Type
The type segment is divided into ethyl alcohol, methyl alcohol and isopropyl alcohol. In industrial alcohol market the largest market share is captured by ethyl alcohol. As it has multiple and very crucial applications across industries in the likes of pharma, food processing, paint and emulsions and biofuels. These various applications makes ethyl the most dominating type of industrial alcohol. Moreover, this domination is anticipated to rise in coming years as biofuel blending goes more mainstream.
On the other hand, the methyl alcohol segment is showing exceptional growth in recent times due to its role as a precursor in development of multiple niche chemicals. Methyl alcohol is a bit less environmentally hazardous then other industrial alcohols in additions to this it is fully bio degradable. Methyl alcohol is naturally in liquid state which make its storage and transportation much easier and safer than other flammable substances like hydrogen. Isopropyl will also witness growth as it has crucial applications in development of sanitizers alongside ethanol.
By source
The source segment is categorized into corn, grains, sugarcane, and molasses. With corn having largest market share. USA is the largest producer of ethanol in the world which produces 55 % of total world’s ethanol. Furthermore, with availability of corns in abundance at the same time with government subsidies. Major players choose corn as primary source for their ethanol production making it the most dominating source in ethanol manufacturing. Moreover, producing alcohol form starch which in this case is derived from corn is cost effective making it a suitable source for mass production.
Molasses as a source for fermentation is also gaining significant market share in recent times. With major industries in India and China capitalizing from abundant supply of molasses as a byproduct form sugar industry. This surge in demand for molasses as a source could be attributed to the facts that it has a high sugar content, which works far better as a substrate for ethanol production then other sources. At the same time the production yield is also better.
By Application
The application segment is broadly categorized into fuel, food ingredient, chemical intermediates, pharmaceutical, personal care and others. The Fuel segment held largest market share in the applications. The driving factor for demand from fuel segment is government’s attempts to increase the usage of ethanol as bio fuel in order to reduce the dependence on traditional fossil fuels. The demand from personal care segment is also estimated to rise in coming years. Gradual rise in average spending for cosmetic and personal care products has been positive for years and this trend is estimated to sustain for several years to come driving the demand for industrial alcohols.
By Region
The regional segment includes Asia Pacific, Europe, North America, the Middle East, and Africa & Latin America. Asia Pacific region is expected to hold the largest industrial alcohol market share in the forecasted period. This domination is simplify attributed to huge levels consumption due to large population. The Asia pacific region is fastest growing region in the world with concentration of exceptional economies clustered together. This growth is literally fueled by fuel (energy) hence the demand for ethanol as fuel blend is set to grow in coming years. Furthermore, countries in Asia pacific region have availability of cheap labor and abundance with healthy accessibility to plenty of arable lands these factors makes this region a perfect location for ethanol market.
The US region is anticipated to grow at significant rate in coming years. Major driver fueling this growth will be governments push for increasing the utilization of green and ecofriendly alternatives like ethanol with traditional fossil fuels. This could also help with cost reduction and liberation from foreign energy dependency.
Industrial Alcohol Market Competitive Landscape:
The market has been analyzed according to its competitive landscape, with main players described in the report. These players are fueling the market growth through their investments in R&D and product innovation. The report includes company overviews, financials, revenues, Product launches, product diversity, application, market potential, global presence, production sites and capacities, strengths and weakness and others. Following are key market players:-
- BASF
- Sigma Aldrich
- Flint Hills Resources
- Greenfield Specialty Alcohols
- Birla Sugar
- The Andersons Inc.
- Grain Millers Inc.
- Mgp Ingredients Incorporated
- Cristalco Sas
- Cargill Inc.
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