Ethanol Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Feedstock (Sugarcane, Corn, Wheat, Barley, Others), By Application (Automotive, Medicines, Food & Beverages, Cosmetics, Fertilizers, Others), By Region and Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 96.35 Billion
CAGR (2026-2031)	4.93%
Fastest Growing Segment	Corn
Largest Market	Asia Pacific
Market Size (2031)	USD 128.61 Billion

Market Overview

The Global Ethanol Market will grow from USD 96.35 Billion in 2025 to USD 128.61 Billion by 2031 at a 4.93% CAGR. Ethanol is a renewable fuel derivative produced through the fermentation of biomass feedstocks such as corn, sugarcane, and cellulosic plant materials. The market is fundamentally supported by stringent government policies that mandate biofuel blending rates to curb greenhouse gas emissions and reduce reliance on fossil fuels. Furthermore, the imperative for energy security and the demand for clean octane sources in gasoline formulations serve as distinct drivers that underpin the industry's structural growth.

Despite the positive trajectory, the market faces a significant challenge regarding the volatility of feedstock prices which creates financial uncertainty for producers. Fluctuations in agricultural yields caused by variable weather conditions can lead to supply constraints that impede stable market expansion. According to the Renewable Fuels Association, in 2024, global fuel ethanol production reached 31.2 billion gallons. This statistic illustrates the substantial scale of the sector even as it navigates these inherent operational hurdles.

Key Market Drivers

The implementation of stringent biofuel blending mandates and policy frameworks serves as a primary catalyst for the industry's structural expansion. Governments are increasingly enforcing higher ethanol integration rates in gasoline to align with national decarbonization strategies and reduce reliance on imported fossil fuels. According to the Press Information Bureau, October 2024, in the 'Ethanol Blended Petrol Programme' update, the ethanol blending percentage in India reached 15.8% in August 2024. This regulatory certainty incentivizes producers to scale operations and secures long-term demand, compelling oil marketing companies to invest heavily in the requisite storage and distribution infrastructure to accommodate these advancing targets.

Simultaneously, emerging applications in Sustainable Aviation Fuel (SAF) are creating a high-value diversification channel for the market. As the aviation sector strives to meet net-zero targets, ethanol-to-jet technologies are being commercialized to provide a scalable, low-carbon alternative to conventional jet fuel. According to LanzaJet, January 2024, in the 'Freedom Pines Fuels' press release, the company inaugurated the world's first ethanol-to-SAF production facility with an annual capacity of 10 million gallons. To support this growing industrial consumption, feedstock availability is expanding in key regions to ensure supply resilience. According to Conab, October 2024, Brazil's total corn production is projected to reach 119.7 million tons for the 2024-25 cycle, ensuring sufficient raw material availability for the country's rapidly developing corn ethanol industry.

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Key Market Challenges

The global ethanol market faces significant hurdles due to the volatility of feedstock prices and the inherent unpredictability of agricultural yields. Since the industry relies heavily on biomass sources like corn and sugarcane, it is uniquely sensitive to environmental conditions. Adverse weather patterns can cause sudden fluctuations in crop output, leading to supply constraints and sharp increases in raw material costs. This instability creates a challenging financial environment where producers struggle to forecast operating margins or commit to consistent production schedules. Consequently, this uncertainty discourages long-term investment and hampers the industry's ability to maintain a stable growth trajectory.

This vulnerability is clearly reflected in recent production figures. According to the Brazilian Sugarcane Industry Association (UNICA), in 2025, cumulative ethanol production in Brazil's Center-South region reached 23.02 billion liters by mid-October, representing a decline of 8.8% compared to the same period in the previous harvest cycle. Such a contraction in output, driven by feedstock processing limitations, demonstrates how agricultural variability can directly restrict market expansion and disrupt the reliability of global supply chains.

Key Market Trends

The strategic integration of Carbon Capture, Utilization, and Storage (CCUS) is fundamentally reshaping the ethanol landscape as producers seek to lower carbon intensity (CI) scores to qualify for premium tax incentives and meet net-zero commitments. Unlike traditional volume-based blending mandates, this trend focuses on decarbonizing the production process itself, effectively transforming biorefineries into carbon-negative assets that can compete in low-carbon fuel markets. This structural shift is evidenced by a wave of planned infrastructure projects designed to aggregate and sequester emissions from fermentation processes. According to Carbon Pulse, February 2025, in the 'US CCS projects may capture more than 30 MtCO2 annually from ethanol production' article, 51 CCS projects were in planning stages across the US by the end of 2024, aiming to sequester at least 30.5 million tonnes of CO2 annually from ethanol facilities.

Simultaneously, the market is witnessing a growing diversification into bio-ethylene and bioplastic feedstocks, decoupling the industry from its exclusive reliance on the transportation fuel sector. Producers are increasingly upgrading ethanol into green ethylene, a critical precursor for renewable plastics, to address the rising global demand for sustainable packaging and circular economy solutions. This application allows manufacturers to hedge against fuel demand volatility while entering high-margin petrochemical supply chains that require non-fossil carbon sources. According to Braskem, May 2025, in the 'Celebrating 15 Years of I'm green' press release, the company's green ethylene production capacity in Brazil reached 275,000 tons per year following a significant facility expansion.

Segmental Insights

The Corn segment is currently recognized as the fastest-growing category within the Global Ethanol Market, primarily driven by its superior starch content and high conversion efficiency which ensure cost-effective production. This feedstock offers a reliable supply chain that is essential for meeting the escalating demand for renewable fuels. Data from the United States Department of Agriculture (USDA) supports this trend, indicating that corn remains the preferred resource for satisfying major biofuel mandates such as the Renewable Fuel Standard. Consequently, the continuous expansion of processing infrastructure globally further accelerates the rapid growth of this segment.

Regional Insights

Asia Pacific holds the leading position in the Global Ethanol Market, primarily driven by favorable government policies and abundant agricultural resources. Rapid industrialization in major economies like China and India has accelerated the demand for cleaner fuel alternatives, resulting in strict blending mandates. For example, the Ethanol Blended Petrol programme in India actively promotes increased consumption to enhance energy security and support environmental goals. Additionally, the ready availability of essential feedstocks such as sugarcane and corn facilitates consistent local production. These factors, combined with strong regulatory support, establish Asia Pacific as the dominant region in the global ethanol sector.

Recent Developments

• In June 2024, BP reached an agreement to acquire the remaining 50% stake in its Brazilian biofuel joint venture, BP Bunge Bioenergia, from Bunge. The transaction, valued at an enterprise value of approximately $1.4 billion for the interest, grants the energy major full ownership of the industrial-scale sugarcane and ethanol business. The assets include 11 production units across five Brazilian states with a capacity to produce around 50,000 barrels of ethanol equivalent per day. This strategic move allows the company to integrate these bioenergy operations more closely with its trading and technology capabilities to support future growth in bio-based fuels.
• In May 2024, Raizen inaugurated its second cellulosic ethanol plant at the Bonfim Bioenergy Park in Guariba, São Paulo. The new facility, which required an investment of R$ 1.2 billion, possesses an annual production capacity of 82 million liters of second-generation biofuel. This advanced plant produces ethanol from sugarcane bagasse, a byproduct of the traditional sugar and ethanol manufacturing process, thereby maximizing the energy yield from the same cultivated area. The company announced that this launch is part of a broader expansion strategy to construct nearly 20 such units to meet the rising global demand for low-carbon fuels.
• In January 2024, LanzaJet inaugurated the world's first commercial-scale ethanol-to-sustainable aviation fuel (SAF) production facility in Soperton, Georgia. The Freedom Pines Fuels plant utilizes proprietary alcohol-to-jet technology to convert low-carbon ethanol into drop-in aviation fuel and renewable diesel. With an annual production capacity of 10 million gallons, this facility represents a significant milestone in scaling up the use of ethanol feedstocks for the aviation sector. This development enables the utilization of diverse ethanol sources, including corn and sugar-based feedstocks, to meet the aviation industry's rigorous sustainability standards and decarbonization goals.
• In January 2024, Praj Industries inaugurated a sustainable aviation fuel (SAF) demonstration facility at its research and development center in Pune, India. This pilot plant utilizes the company's proprietary technology to convert agricultural feedstocks, including sugary and starchy materials, into bio-aviation fuel. The initiative highlights the growing focus on indigenous technologies to produce low-carbon fuels from ethanol and other bio-based sources. The successful commissioning of this facility serves as a precursor to commercial-scale projects, positioning the company to capitalize on the increasing regulatory mandates for SAF blending in India and international markets.

Key Market Players

• Archer Daniels Midland Company
• THE ANDERSONS, INC.
• BP International Limited
• VeraSun Energy Corp.
• Cargill, Incorporated.
• Aventine Renewable Energy, Inc.
• Valero Energy Corporation
• Midwest Renewable Energy LLC
• ChemCeed LLC
• Junsei Chemical Co., Ltd.

By Feedstock	By Application	By Region
Sugarcane Corn Wheat Barley Others	Automotive Medicines Food & Beverages Cosmetics Fertilizers Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Ethanol Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Ethanol Market, By Feedstock:

• Sugarcane
• Corn
• Wheat
• Barley
• Others

• Ethanol Market, By Application:

• Automotive
• Medicines
• Food & Beverages
• Cosmetics
• Fertilizers
• Others

• Ethanol Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE